Liontown Resources boss Tony Ottaviano says the company is about nine months away from having its flagship lithium mine built and in production despite Gina Rinehart fuelling concerns about the project.
Liontown chief executive Tony Ottaviano at the part-built Kathleen Valley mine in August. Evan Collis
The takeover target awarded the last of the construction contracts for the Kathleen Valley lithium mine and spodumene production plant on Wednesday, two days after Mrs Rinehart’s Hancock Prospecting talked up its capacity to lend construction, mining and downstream processing expertise to the project.
“There is a clear line of sight to first spodumene production mid-next year,” Mr Ottaviano said in statement to the ASX regarding the awarding of a key contract.
The comment hoses down Hancock’s talk of “significant risk” hanging over Kathleen Valley.
Mr Ottaviano also said of engineering firm Monadelphous, which was awarded the final construction contract: “Their demonstrated skills, capability and professionalism reflects Liontown’s expectations of a partnership.”
Hancock has signalled seeking a seat on the board after building a stake of at least 7.72 per cent in Liontown – the target of a $6.6 billion takeover offer from New York-listed Albemarle.
The Liontown share price was up slightly at $3.05 in trading on Wednesday as the gap continued to widen on the Albemarle takeover offer pitched at $3.
The Albemarle share price has dipped from about $US200 when the takeover offer was accepted by the Liontown board on September 4 to a Tuesday close of $US184.35. The stock is down almost 38 per cent since last September when Albemarle started eyeing off Liontown.
Liontown declined to comment on any change of control provisions in construction, mining and logistics contracts already awarded for Kathleen Valley.
It hailed the awarding of a $100 million contract to Monadelphous for work on a processing plant as a milestone.
Liontown said it would apply “lessons learned from industry peers” in bringing Kathleen Valley into production and was confident in the expertise already on board.
“Monadelphous has a large resources pool, experience in the hard rock lithium sector, and a proven track record of delivering large-scale multi-disciplinary projects in WA,” Mr Ottaviano said.
Hancock has not elaborated on its plans for Liontown since Monday when it said: “The (Kathleen Valley) project is a prospective high quality hard-rock lithium deposit in its development phase, which whilst still having a number of significant risks including resource conversion, construction execution and metallurgical recovery, has the potential to operate at scale.
“This shareholding provides Hancock with a strategic stake in Liontown, giving Liontown the opportunity to leverage Hancock’s expertise where it is of value to support the project’s development and subsequent operations.”
Liontown has awarded a string of big contracts in recent months, including a $1 billion deal with underground mining contractor Byrnecut and a $175 million agreement with Qube to cart the 6 per cent lithium spodumene concentrate it plans to produce at Kathleen Valley about 650 kilometres by road to the port of Geraldton for export.
It is understood the Byrnecut deal is about to be finalised, and the privately owned contractor already has equipment on site at Kathleen Valley. Byrnecut is expected to start work on what will be Australia’s first underground lithium mine in November.
Liontown chose Monadelphous for its last construction contract less than a week after the engineering contractor won $160 million of work on a chemical grade processing plant at the Greenbushes lithium mine half-owned by Albemarle.
It is also working on Albemarle’s lithium hydroxide plant at Kemerton in WA.
Albemarle is yet to comment publicly on Hancock’s strategic stake and how it may affect its takeover play.
Charlotte-headquartered Albemarle announced overnight that it had been handed $US90 million ($140.4 million) by the US Department of Defence towards boosting lithium mining on American soil.
Albemarle will use the grant to buy mining equipment as it moves to reopen the mothballed Kings Mountain lithium mine in North Carolina. It has already received $US150 million from the US Department of Energy towards bringing the mine into production by late 2026.
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