The big boys at play Ellison eyes newlithium prize near...

The big boys at play

Ellison eyes newlithium prize near Albemarle joint venture

Chris Ellison’s Mineral Resources has turned its attention to anew lithium target with links to the company’s chairman, located near theprolific Wodgina lithium mine jointly owned by MinRes and Albemarle.

The billionaire MinRes founder is looking to build a stake inWildcat Resources, The Australian Financial Review can reveal, and has sounded out the target’s investors about acquiring their shares off market.

The MinRes interest sustains a lithium land grab aroundestablished mines in Western Australia, and adds to the intrigue aroundAlbemarle’s next move after abandoning a $6.6 billion takeover bid for the Hancock-backed LiontownResources.

A once fragmented WA industry is being rapidly consolidated by a powerful few, as illustrated by Gina Rinehart and Albemarle’s duelling interests in Liontown, and Rio Tinto racking up exploration tenements in the red-hot jurisdiction better known for iron ore.

Wildcat last week completed the acquisition of the Tabba Tabbalithium project in WA’s Pilbara through a deal with Global Advanced Metals,which is owned by James McClements’ private equity firm, Resource CapitalFunds. Through the Tabba Tabba sale process, Global Advanced and ResourceCapital now control a 17.9 per cent stake in Wildcat, plus a royalty fromlithium production.

Pilbara-raised Mr McClements is thechairman of MinRes and has served on the board since 2015.

MinRes purchased the Wodgina mine from Global Advanced in 2016for an amount considered immaterial by MinRes and never disclosed. MinRes thensold a half share in Wodgina to Albemarle for about $1.56 billion in 2018, andMr Ellison has since recut its partnership with the battery chemicals giantseveral times.

The latest iteration of the MinRes-Albemarle JV was completed onWednesday. MinRes no longer has any interest in Albemarle’s lithium hydroxideplant in WA, and Albemarle will pay MinRes $US380 million ($602 million) to$US400 million by December as consideration.

Global Advanced also sold what is now the Pilgangoora lithiummine to Pilbara Minerals in 2014.

Wildcat shares closed at 46¢ on Friday but have been as high at52¢ since a $5 million capital raising struck at 3.5¢ a share in May as part ofthe Tabba Tabba acquisition.

The issue of the 200 million shares as part of that was held upuntil last Thursday and came after the Foreign Investment Review Board tickedoff on the royalty aspect of the deal with Global Advanced.

Wildcat executive chairman Matthew Banks declined to commentwhen asked about MinRes’ interest. MinRes also declined to comment, citingmarket speculation.

The Financial Review tried to contact Mr McClements, who is based in London, about Global Advanced’s deal with Wildcat.

Mr Ellison has previously said MinRes will seek to consolidatelithium assets in WA and taken several steps in that direction since pullingout of a billion-dollar commitment to invest alongside Albemarle in theirlithium hydroxide JV in China.

Mr Ellison was newly installed as the non-executive chairman ofDelta Lithium, a hopeful backed by MinRes and Hancock, which owns the Mount Idaproject about 200 kilometres south of Kathleen Valley in an area where Hancockhas an array of exploration tenements.

MinRes is also close to acquiring the Bald Hill lithium minefrom administrators. The acquisition of Bald Hill will give MinRes threeoperating lithium mines with processing infrastructure in WA.

The Bald Hill mine is about 80 kilometres from Liontown’sundeveloped Buldania lithium project and south-east of where MinRes operatesthe Mount Marion mine in partnership with China’s Ganfeng.

MinRes also backed Bill Beament’s Develop Global in a deal toacquire Essential Metals and its Pioneer Dome lithium project near Kambalda. Thedeal was ticked off by Essential shareholders on Wednesday, six months afterMinRes helped vote down a $136 million bid from Tianqi and IGO to acquireEssential.

Mr McClements’ Resource Capital last month sold engineering and consulting firm Ausencofor $US578 million. Ausenco co-founder Zimi Meka also sits on the MinRes board. He is staying on as Ausenco chief executive under new owners that include billionaire Todd Boehly’s Eldridge Industries, Brightstar Capital and the Claure Group.

Marcelo Claure said he planned to use Ausenco to help turn LatinAmerica into a major force in lithium as well as copper.