Gina Rinehart secures bigger stake in Azure Minerals

Gina Rinehart. Picture: Bloomberg

Gina Rinehart has officially emerged this week as a substantial holder of takeover target Azure Minerals.

The talk at the weekend was that she has managed to amass about 18 per cent in the stock at $3.50 a share, the price at which the stock closed on Friday.

This would take her holding she was buying in the market on Friday to about 14 per cent.

Some in the market believe she is buying time while she determines how she wants to use her $20bn-plus cash pile to play the electric-vehicle demand thematic, fuelling a rising demand for lithium.

Another thought is that, given she owns West Australian ports through investments such as Atlas Iron and energy through the ownership of Warrego Energy and much of Senex, it buys her a seat at the table.

Lithium producers need to negotiate contracts around the transportation and gas needed in lithium mining, an industry that is highly energy-intensive in a state where only 8 per cent of the gas produced is used in the domestic market and the remainder largely for the resources industry.

The move on Azure Minerals last week came after the group reached a deal for Chile’s lithium giant SQM to buy the business for $3.52 a share, or $1.6bn

Azure’s advisers were planning for a possible raid by Mrs Rinehart after her move on Liontown prompted US-based suitor Albemarle to abandon its $6.6bn buyout for the latter.

The Azure deal is structured so SQM can move to a takeover proposal at $3.50 a share and buy stock on the market rather than rely on a shareholder vote through a scheme of arrangement should an interloper appear on the register.