Ground Breakers: Iron ore squillionaire Gina Rinehart wants to sell our lithium to India
Gina Rinehart is worth approximately a totopatrillion bucks these days, a quantum we’ve invented because Hancock’s Roy Hill royalties are so iron-clad these days it really doesn’t matter what Australia’s richest person is worth. She’s minted.
And while iron ore has been the bread and butter of Hancock going back to the Lang days, Gina’s interests have become more varied and adventurous over time.
Gas, cattle stations and coal are some obvious ones.
Then there is the Pilbara princess’ growing list of investments in critical minerals from rare earths to lithium and more.
The latter is where we head today, with Rinehart and Hancock finally taking the big step from investors to explorer and potential miner in the lithium space.
The vessel for that quantum shift is a lithium earn-in and JV at the Mt Bevan project where it was previously looking to develop a magnetite iron ore mine with juniors Legacy Iron Ore (ASX:LCY) and Hawthorn Resources (ASX:HAW).
That’s now turned into a lithium JV as well.
It’ll work like this. Hancock will spend $4m and up to another $22m on exploration in minerals other than iron ore at Mt Bevan to earn a 51% stake in the non-iron ore rights.
$2.4m will go to Legacy, with $1.6m heading to HAW for an initial 7.5%. The rest will come in through a $5m spend on exploration over the next 12 months (7.5%), $7m on drilling in the 12 months after that (20%) and the final 16% chunk for completing a DFS valued at around $10m.
The end goal of all this is to outline a lithium resource in excess of 5Mt and 1.2% Li2O, something that would trigger an additional $10m cash payment to LCY and HAW. That would approach the sort of scale of Delta Lithium’s (ASX:DLI) nearby Mt Ida deposit — 12.7Mt at 1.2% Li2O — which has opened a potential new lithium province in the historic gold belt in the northern Goldfields.
The deal is also a demonstration of Rinehart’s political connections. She reportedly met PM Narendra Modi on his recent trip to Australia ahead of the deal’s announcement.
It is important since Legacy will have the right to acquire up to 75% of the offtake from Mt Bevan. Legacy is effectively controlled by NMDC, India’s biggest state owned mining company.
Now the world’s most populous country, India’s growth story is, along with the decarbonisation narrative, the holy grail for Aussie miners concerned about the potential peaking of industrial growth in China.
The deal comes a day after Japanese conglomerate Idemitsu announced a $46.4m investment to take its stake in neighbouring lithium developer Delta from 2.8 to 15%, demonstrating the significant corporate heft being thrown behind the development of WA’s lithium sector — already home to half the world’s production of the EV metal.
“The signing of this agreement is a significant step in the development of the Mt Bevan project as it moves further towards commercialisation. We welcome Hancock into the project and look forward to working with them and leveraging their expertise in the area, and the development of this project,” LCY CEO Rakesh Gupta said.
HAW MD Brian Thornton called the Mt Bevan project ‘unique’ for its joint iron ore and lithium potential.
“The Mt Bevan project is unique and has delivered an outstanding result for Hawthorn shareholders; firstly we have a world class well defined magnetite ore body which sits side by side with a potential new lithium province on the Mt Ida fault and adjacent to Delta Lithium’s discovery,” he said.
“Hawthorn Resources is delighted to welcome Hancock into this next exciting chapter of the Mt Bevan venture.”
More reports that China is looking to reinvigorate its down and out property sector had prices fighting fit across the steel complex, with iron ore stretching to a 16% month gain, up 1.5% to US$113.35/t.
Coking coal futures also rose 2.9% to US$227/t with Chinese rebar up 0.7%.
FMG shares ran more than 3% to a six-month high of $22.40.
Other battery metals and gold stocks slid, however, muting the materials sector’s gains to just 0.08% this morning.