Tomorrow Investor

Graves: Experts Over-valued WA Lithium Projects

Paul Graves

The man who is slated to lead the new entity arising from the recent merger of mining titans Allkem and Livent has called out what he sees as a serious mistake on the part of those ascribing value to a number of early-stage mining initiatives.

Paul Graves, currently chief executive at Livent and incoming head of the new firm Arcadium Lithium, said that there is a serious disconnect between the exorbitant values slapped onto lithium mining projects in Western Australia which are at their very earliest phases, as well as those that stand to pose technical challenges. 

Graves further pointed out how many of these do not have full ownership, let alone extensively proven resources.

A Timely Statement

Interestingly, while Graves made his observations known just after the Allkem-Livent merger was finalized on November 3rd, his words felt like an allusion towards the ongoing drama involving a hostile takeover of Western Australian firm Azure Minerals.

It appears that Australian billionaire Gina Rineheart and Chris Ellison, managing director of Mineral Resources (MinRes) have major stakes in Azure which is slated to be taken over by Chilean mining giant Sociedad Quimica y Minera (SQM).

In a disclosure released on November 3rd, MinRes executives claimed that their company had a 12.3% stake in Azure, having purchased shares above the $3.52 per share offer from SQM. Meanwhile, Rinehart’s firm Hancock Prospecting holds 18.9% of Azure’s shares, while SQM currently has 19.9%. 

Based on the SQM offer per share, Azure is currently valued at $1.6 billion.

At present, Azure owns around 60% of the lithium mine currently being developed in Pilbara. The remaining 40% is owned by lithium exploration expert Mark Creasy.

It should be noted at this point, however, that Graves expects Arcadium Lithium to become more aggressive with regard to purchasing assets in Western Australia once the new entity has a greater understanding of the area.

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