MinRes wins fight for Bald Hill lithium mine after court hearing
Western Australia is in the midst of a lithium investment boom. Bloombergnone
A court hearing in Perth has cleared the way for Chris Ellison’s Mineral Resources to acquire the Bald Hill lithium mine from administrators as part of consolidation in the sector in Western Australia.
MinRes and McGrathNicol are finalising the sale, which represents a rebuff to China’s hold on Australian battery metal assets, after a Supreme Court ruling on Wednesday. The ruling came as the market closely watches Gina Rinehart’s intentions after she built a near-11 per cent stake in Albemarle takeover target Liontown Resources.
Western Australia is in the midst of a lithium investment boom. Bloombergnone
Perth-headquartered MinRes swooped on Bald Hill after Treasurer Jim Chalmers blocked a sale to China-linked Austroid Corporation in July.
The Bald Hill mine and associated processing plant are about 80 kilometres from Liontown Resources’ undeveloped Buldania lithium project and south-east of where MinRes operates the Mount Marion mine in partnership with China’s Ganfeng.
MinRes called on the Albanese government to scrap a Bald Hill offtake deal with Hong Kong-registered Yihe Cleantech Material when it first reached an agreement with McGrathNicol to buy the mine.
MinRes confirmed on September 4 that, notwithstanding the Foreign Investment Review Board and government block on Austroid, it wanted action on the offtake deal in light of allegations the mine “operates under effective foreign control through a complex corporate structure”.
The court ruling means Singapore-listed Alita Resources, Bald Hill’s owner, can be put into liquidation. An update on Alita and the Bald Hill sale to the Singapore Exchange was expected late on Wednesday.
Alita appointed McGrathNicol as administrators in 2019. The sale of the asset to MinRes was complicated by Alita’s receivers, who suggested other buyers were circling Bald Hill and questioned whether McGrathNicol as the administrator had authority to sell the mine.
The acquisition of Bald Hill will give MinRes three operating lithium mines with processing infrastructure in WA, including the Wodgina mine in the Pilbara that it owns in partnership with Albemarle.
MinRes boosts war chest
Albemarle is pushing ahead with due diligence on its $6.6 billion takeover offer for Liontown as Mrs Rinehart’s Hancock Prospecting pushes for a role in building and operating Liontown’s flagship Kathleen Valley project in the northern Goldfields. Mr Ellison recently became non-executive chairman of MinRes and Hancock-backed Delta Lithium, which owns the Mount Ida lithium project about 200 kilometres south of Kathleen Valley.
MinRes boosted its war chest for potential lithium deals and expansion on Tuesday when it turned to the US bond market for $US850 million ($1.325 billion) in new debt funding. MinRes said on September 4 that it did not intend to raise equity to fund the Bald Hill acquisition.
Bald Hill is expected to cost MinRes several hundred million dollars. The price is subject to an independent expert valuation.
MinRes has said it will pay out the secured debt in acquiring Alita’s interest in Bald Hill and that the deal will provide a material return to Alita.
MinRes has also referred to allegations that, under a complex ownership structure, the mine operated at a loss “with profits transferred overseas via an offtake agreement with a Hong Kong-registered entity, Yihe Cleantech Material Limited”.
“It has been alleged that this offtake agreement has also led to an under-payment of state royalties. MinRes’ successful acquisition of the Bald Hill mine will ensure that the mine is being operated by an experienced Australian ASX-listed lithium miner, and any profits are generated and taxes and royalties paid in Australia to the benefit of Australian taxpayers,” MinRes said on September 4.
In August, Albemarle distanced itself from Mr Ellison’s criticism of China after MinRes pulled out of a billion-dollar lithium processing deal.
The billionaire businessman said the Chinese economy was high-risk and that MinRes did not want to “trap money” there after ditching an agreement to invest in Albemarle’s lithium hydroxide plants in the country.
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