“I think a $3 per share bid allowed for a healthy premium to the fundamental value,so clearly if there isn’t a new offer to shareholders the price will come under pressure,” he said.

The miner is close to finishing development of its lucrative high-quality hard-rock lithium deposit in Kathleen Valley,in the middle of Western Australia. Albemarle owns significant lithium resources and conversion facilities in Australia at Greenbushes,Wodgina and Kemerton in WA.

Vickerson said he expects further consolidation in the sector. “It is being seen as a pretty key time to grab a stake and become one of the early movers in an industry that is still going to grow for a long period of time,” he said.

Kathleen Valley will be a significant source of spodumene - the precursor material refined into lithium for batteries - that could feed new processing facilities in the area or Albemarle’s existing ones,he said.

“It maybe makes sense to consolidate and optimise the different potential sources of spodumene into the refining operations,” Vickerson said. “If you’re vertically integrated,you’re kind of insulated from volatility[in prices].”

Liontown chief executive Tony Ottaviano said Albemarle had been constructive and respectful throughout the diligence process. “Notwithstanding,our position to maintain momentum on our base plan has allowed us to keep line of sight of first production from the Kathleen Valley Project in mid-2024,” he said.

Before Hancock’s raids,Liontown’s register was dominated by its chairman,Tim Goyder,who owns a 15 per cent stake in the miner. Another 20 per cent was reportedly in the hands of investors closely aligned to Goyder.

Lithium has shot to prominence over the past decade as a key component in modern home and grid batteries used to store the renewable energy generated from wind and solar or to power electric cars. Its critical status has resulted in vehicle manufacturers and lithium producers scrambling to secure supply chains amid the growing competition for raw materials from the booming EV sector.

Research from Macquarie analysts released last month says China’s lithium supply is expected to slip into deficit as the country’s refiners cut production. The Asian powerhouse produces the bulk of the globe’s lithium. “[A] sharp supply cut into peak season could drive a price rebound,” Macquarie said.

The Business Briefing newsletter delivers major stories,exclusive coverage and expert opinion.Sign up to get it every weekday morning.