The takeover appeared to be on track until Mineral Resources made its dramatic intervention; an independent expert had deemed the 50¢ offer to be fair and reasonable and the Essential board had advised shareholders to accept it.
Essential’s undeveloped Pioneer Dome lithium discovery is located about 75 kilometres from the Mt Marion lithium mine that is operated and half-owned by Mineral Resources.
Mineral Resources has not explained the motivations for its purchase of Essential shares, but logic suggests the company is keen for Pioneer Dome to be developed in a way that has some connection to Mt Marion.
One possible scenario would be for Pioneer Dome ore to be trucked to Mt Marion. A series of shelf companies created by Mineral Resources in February have only added fuel to that perception.
Mineral Resources bought its 19 per cent stake in Essential through a subsidiary called Lithium Resource Operations. That subsidiary owns two further subsidiaries called Mt Marion Holdings and Mt Marion Management.
Neither Mt Marion Holdings nor Mt Marion Management have any current legal nor commercial link to the Mt Marion mine, however the naming of the companies suggests they may have a link in future.
Tianqi and IGO made the bid through their joint venture company TLEA, which is 51 per cent owned by Tianqi and 49 per cent owned by IGO. TLEA already owns 51 per cent of Australia’s best lithium mine at Greenbushes and 100 per cent of a lithium hydroxide processing plant at Kwinana.
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