Article by Brad Thompson courtesy of the Australian Financial Review.
Gina Rinehart is a step closer to owning her first lithium mine after striking a deal that could see her emerge with a majority share in operations targeted at supplying India, where she has a strong relationship with prime minister Narendra Modi.
Mrs Rinehart’s Hancock Prospecting will pay up to $36 million for a potential 51 per cent in the Mt Bevan project located in a part of Western Australia emerging as a lithium hotspot.
Under the deal, signed by Hancock chief executive of group projects Sanjiv Manchanda in Hyderabad, most of any lithium produced at Mt Bevan will be shipped to India as it looks to boost its critical minerals supply chain.
“I’m so pleased that our company group is expanding its ties with Australia’s important friend and ally, India,” Mrs Rinehart said. “Prime Minister [Narendra] Modi has plans to significantly grow the Indian economy, and to do so they will need increased and reliable exports of minerals and energy.”
Legacy Iron, backed by India’s National Mineral Development Corporation, will have the right to acquire up to 75 per cent of any lithium output. Mt Bevan sits next door to Delta Lithium’s Mt Ida project set to be producing the key battery mineral by next year.
Hancock will make an initial investment of $4 million for a 7.5 per cent stake in the Mt Bevan project, controlled by ASX-listed joint venture partners Legacy and Hawthorn Resources.
Australia’s most successful private company can boost its stake to 51 per cent by investing a further $22 million if certain exploration and development milestones are hit.
And, Legacy and Hawthorn are in line for an additional $10 million if a lithium pegmatite resource of more than 5 million with an average grade of 1.2 per cent lithium oxide is uncovered.
The deal was struck amid speculation India would join forces with Hancock, and potentially others in lithium ventures in WA, since May when executives from the government-owned NMDC visited WA for meetings and site visits with lithium processors. Representatives also called in at Hancock’s Roy Hill iron ore mine.
NMDC first took a stake in Mt Bevan, about 250 kilometres north of Kalgoorlie, in 2001 when it grabbed a majority share in Legacy.
Its latest visit was followed by a private meeting between Mrs Rinehart and Mr Modi in Sydney where they discussed increased co-operation on mining and critical minerals.
The India-backed agreement with Hancock is believed to represent the first major undertaking to be inked since the Indian prime minister’s visit. India is aiming for electric vehicles to make up 30 percent of all new car sales by 2030 and needs lithium to have any hope of hitting that target.
Mr Manchanda indicated the Mt Bevan agreement was just part of a series of new resources developments on the horizon.
“This work (at Mt Bevan) will draw on the significant expertise that is now being assembled at HanRoy [Hancock Roy Hill], which has a mandate to lead the study, design, and development of a globally significant pipeline of projects,” he said.
