Article by Brad Thompson courtesy of the Australian Financial Review.
Gina Rinehart’s Hancock Prospecting has grabbed a big stake in Arafura Rare Earths amid a flurry of corporate activity from the iron ore billionaire, who is intent on increasing her private company’s footprint in green minerals as well as winning a takeover battle for Warrego Energy.
Hancock, through an investment strategy driven by Australia’s richest person, will emerge with a 10 per cent stake in Arafura after pumping $60 million into a $121 million capital raising.
The Hancock backing, revealed in The Australian Financial Review’s Street Talk column, is a big boost for Arafura as it pushes ahead with the $1.6 billion Nolans Creek rare earth project in the North Territory.
The investment was announced on Monday as Warrego confirmed Hancock had gained the upper hand over Kerry Stokes-backed Beach Energy in the rapid-fire takeover battle for the Perth-based company.
Warrego has given Beach five business days to top the latest all-cash 28¢ a share takeover bid from Hancock lobbed last Friday.
The latest Hancock bid, which values the Perth Basin onshore gas player at $342 million, landed within hours of Beach upping its offer to 25¢ amid a willing contest that might take a few more twists and turns.
The Warrego share price jumped more than 11 per cent to 31.5c in early trading on Monday and the Strike Energy share price was up nearly 5 per cent to 33.5c, suggesting the market sees more interest in consolidation of gas assets in the Perth Basin.
Green-facing minerals
Strike started the takeover battle for Warrego, its equal partner in the West Erregulla project, with an all-scrip offer.
In posting a $5.8 billion profit for 2021-22 driven by its Roy Hill iron ore last week, Hancock indicated it wanted to build on investments in oil and gas and green-facing minerals.
Arafura managing director welcomed Hancock onto the company’s register, saying Hancock was “well experienced in large project developments”.
“The widespread interest in this placement reflects the increasing global awareness of the importance of our NdPr (neodymium-praseodymium) oxide product within the supply chains essential to energy transition,” he said.
Nolans Creek is considered one of the world’s biggest undeveloped rare earth deposits and Arafura already has binding offtake agreements in place with carmakers Hyundai and Kia.
