Rinehart May Emerge as the Inaugural Lithium Empress Worldwide
Although she hasn’t reached that status yet, Gina Rinehart, the billionaire known for her iron ore holdings, is well on her way to becoming recognized as the world’s foremost lithium magnate. With a fortune estimated at $26 billion by Forbes, Rinehart has ventured into the lithium sector, a crucial component in electric vehicle batteries.
In recent months, she undertook audacious stock market maneuvers to increase her stake in the lithium industry. Her acquisition of a 19.9% share in the emerging Australian lithium miner Liontown Resources forced Albemarle Corporation, a U.S.-based company, to abandon its $4.2 billion takeover bid. Additionally, Rinehart’s purchase of a 15.4% interest in Azure Minerals disrupted an attempted takeover of that company by Chile’s lithium leader, Sociedad Quimica y Minera (SQM).
These strategic moves on the Australian stock market complement her earlier investment in Vulcan Energy Resources, which is engaged in a lithium and geothermal energy project in Germany’s Rhine Valley.
Notably, Rinehart is funding her lithium investments, which are estimated to have cost $1.5 billion thus far, from the profits generated by her iron ore ventures. Her iron ore interests made the most significant contribution to the $3.3 billion profit earned by her flagship company, Hancock Prospecting, in the last financial year.
Furthermore, a noteworthy aspect of Rinehart’s addition of lithium to her diversified portfolio, which includes agricultural assets, oil, and gas, is that most of these investments were made as the price of lithium was declining. A surplus of lithium, particularly in China, led to a substantial drop in lithium prices over the past year, affecting the share prices of many lithium exploration and mining companies.
However, Rinehart’s approach aligns with Warren Buffet’s investment philosophy of “buying when others are fearful.” While she possesses a deep understanding of mining, thanks to her late father, Lang Hancock, she may need to bring in processing expertise to fully capitalize on the value of lithium. Albemarle, a chemical specialist, or SQM could potentially provide that expertise if they maintain a connection with Liontown. Another likely partner for lithium processing is Posco, a prominent Korean steel and industrial materials company, which is actively involved in lithium cathode material production and investing in lithium projects worldwide.
Posco has expressed a strong interest in Australian lithium, which was further emphasized through a “strategic cooperation” agreement with Rinehart, specifying their mutual interest in lithium, nickel, copper, and advanced forms of value-added iron ore processing.
With Rinehart accumulating lithium assets and Posco possessing the technical capabilities for producing high-quality lithium chemicals for batteries, a promising partnership between Australia and Korea could be in the making.