Altura, Aitken Murray and how to resuscitate a lithium miner

Loss-making lithium miners are a dime a dozen. But what about one that is in the process of raising fresh equity alongside its circa $US140 million debt refinance?

Altura's Pilgangoora lithium mine. Altura Mining

That precisely describes Altura Mining, which has been in a trading halt since January 13.

Fund managers told this column Altura has enlisted advisory firm Aitken Murray Capital Partners to help it raise between $35 million and $40 million, and the miner and its broker will meet potential investors in Sydney and Melbourne in coming days.

It's expected billionaire and Australia's richest woman, Gina Rinehart, will be an interested onlooker.

Aitken Murray deals have turned Rinehart's head before – Hancock Prospecting wrote a $68.9 million cheque for a 19.9 per cent stake in Riversdale Resources last August – and her company Atlas Iron has a 5 per cent royalty on production from one of Altura's leases (M45/1231).

But Rinehart won't be the only one watching to see how this equity raising progresses.

Altura is producing lithium in Western Australia, next door to Pilbara Minerals, another producer. But lithium prices have collapsed from their May 2018 peak as supply – spurred by excessive optimism about electric vehicle and battery growth – has overwhelmed demand.

Lithium price collapse

Prices for battery-grade lithium declined by between 16 per cent and 19 per cent in the final three months of 2019.

Pilbara Minerals has been in a world of pain while Galaxy Resources warned in October that production at Mt Cattlin would be scaled back by about 40 per cent. Galaxy updated the market again last month, saying that mining had ceased at the Western Australian asset in mid-December.

The company said it would resume blasting, crushing and processing at the mine in February, while mining was not expected to resume until March.

It's a different story offshore, however.

Producers such as lithium giant Albemarle have started to climb higher, on the back of a spike in Tesla's stock and Britain's move to bring forward a ban on new petrol and diesel cars to 2035.

Lithium is a key component in rechargeable batteries, which power electric