Australian billionaire Gina Rinehart has entered the lithium space after her mining company Hancock Prospecting inked an agreement with Legacy Iron Ore and Hawthorn Resources to explore the mineral at the Mount Bevan project in Western Australia. India's National Mineral Development Corporation (NMDC) holds a 90 percent stake in Legacy Iron Ore, according to the firm's 2022 annual report.

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Lithium is the lightest and softest metal in the world. The mineral converts the chemical energy it stores into electrical power. Lithium is a non-ferrous metal and is one of the critical components for batteries that power electric vehicles.

At present, 47 percent of the world's lithium is produced in Australia, 30 percent in Chile and 15 percent in China. Currently, India is import-dependent on many minerals like lithium, nickel and cobalt and has lately been looking to strengthen its supply of key minerals, including lithium, that will be critical for furthering its electric vehicle plans.

Reports in the Australian media have quoted Legacy Iron Ore's CEO Rakesh Gupta as saying that the signing of the agreement is a significant step in the Mt Bevan project's development as it moves towards commercialisation.

Hancock would invest $26 million for a 51 percent stake in the Mt Bevan project joint venture, according to local reports. The remaining 41 percent will be shared by Legacy Iron Ore and Hawthorne resources. CNBC-TV18 has reached out to NMDC and Legacy Iron Ore and is awaiting response.

A report by Miningnews.net stated that Legacy Iron Ore would maintain the right to acquire 75 percent of any end product, Hawthorn will have a 10 percent share and Hancock would have a 15 percent share. This report is also a part of the 'news' section on Hancock Prospecting's website.

Last month, Rinehart met the Indian Prime Minister Narendra Modi during his visit to Australia. According to a statement from the Prime Minister's Office, he highlighted the reforms and initiatives India was undertaking and also invited Rinehart to "partner in technology, investment and skilling in the mining and minerals sector."

PM @narendramodi met Ms. Gina Rinehart of Hancock Prospecting Group. He highlighted the transformative reforms and initiatives being undertaken in India and invited her to partner in technology, investment and skilling in the mining and minerals sector. https://t.co/RF2vLVDGsl

— narendramodi_in (@narendramodi_in) May 23, 2023

Local news media organisation The West Australian quoted Hancock's head of operations, Sanjiv Manchanda, as saying that the pact comes from a deepening bilateral relationship between the two countries — Australia and India.

Last month, Vivek Bharadwaj, secretary for the Ministry of Mines, had said the Indian government would soon bring an amendment to the Offshore Areas Act to increase offshore mining in the country.

Rinehart's Hancock Prospecting will initially invest $4 million for a 7.5 percent stake in the project, and another $22 million (for a 43.5 percent stake) over the next 24 months. The pre-feasibility study (PFS) in the first 18 months, which is estimated to cost $10 million, will unlock a 51 percent stake for Hancock in the rights to non-iron minerals of Mt Bevan.

First Published:Jun 16, 2023 12:00 PM IST