Lithium article in FT today part 027 Nov 2023 13:39
The vast tracts of desert in Western Australia, which have yielded gold, nickel and iron ore to prospectors in decades past, have now become a major battleground for miners of lithium, a key raw material for batteries as the world transitions to greener energy. A struggle for control of the resource has been ignited this year as multinational companies have clashed with Australian mining billionaires over a series of takeover attempts in two of the remotest parts of the state. A section of desert near the mining town of Kalgoorlie in the Goldfields region has become known as the “lithium corridor of power”, while merger moves in the Pilbara in the state’s north-west have triggered memories of the iron ore boom there in the 1960s and Western Australia’s nickel rush in the 1970s. “These exciting periods don’t come around too often, these prolonged periods of demand for a commodity. It is driving a frenzy,” said Tom Reddicliffe, a 40-year mining veteran and executive director of GreenTech Metals, whose exploration rights in the Pilbara have buoyed its share price amid heightened deal activity. “There’s only so many seats at the table. It’s like musical chairs — you don’t want to miss out,” he added. The “land grab” for mining rights in the lithium corridor kicked off in September, when US company Albemarle, the largest producer in the world, agreed to pay $4.3bn for Liontown Resources, an emerging project that has struck supply deals with Tesla and Ford. However, the takeover was foiled by Gina Rinehart, Australia’s richest person, who stealthily built a 19.9 per cent stake in Liontown, forcing the US suitor to walk away. Rinehart, an iron ore magnate, then moved to spoil another lithium takeover, this time in the Pilbara. Chile’s SQM had agreed to pay about $1bn to buy out early-stage lithium player Azure Minerals before Rinehart pounced again by buying an 18 per cent blocking stake. Chris Ellison, who controls A$12bn ($8bn) miner Mineral Resources and is a shareholder in Azure, said this month that SQM’s bid looked “dead in the water”. Rinehart and Ellison have become increasingly active investors in a host of small lithium projects in both parts of the state, where foreign companies including Albemarle, SQM and China’s Tianqi Lithium have previously been among the biggest investors. Ian Hansen, head of the chemicals division of Perth-based retail-to-chemicals conglomerate Wesfarmers, which has partnered with SQM on lithium assets, said the recent flurry of activity represented a “growing belief in the fundamentals of Western Australian lithium”.
Sign In
Follow the stocks
