Former Dow Boss Andrew Liveris In $251 Million Aussie Salt Deal

It’s back to the future for Andrew Liveris, former chairman of the Dow Chemical Company, who is leading a rush to expand industrial salt production in Australia.

Along with other investors, his Liveris Family Office is a shareholder in Leichhardt Industrials which has just paid big mining company Rio Tinto $251 million for the 55-year-old Lake McLeod solar salt and export facility on the west coast of Australia.

As well as making a quick entry into the salt industry through the acquisition of an existing business, Leichhardt is working towards the development of a second Australian salt farm called Eramurra.

German salt company, ConSalt is teaming with Liveris in Leichhardt, along with the wealthy Smorgan family of Melbourne which owns an interest through its funds management arm Victor Smorgan Group.

K+S, Germany’s biggest salt and potash producer, is also planning an entry into Australian salt which is made by tapping sea water before drying it in ponds followed by harvesting and shipping to customers in Asia.

The international salt brigade is being matched by local involvement through BCI Minerals, a company controlled by industrial equipment and media billionaire Kerry Stokes, which is developing the Mardie salt and potash project.

A rising salt price and a forecast of a developing supply shortfall has sparked the renewed interest in Australian salt which blossomed 30 years ago but faded in importance as the country’s iron ore industry developed.

Rio Tinto, one of Australia’s biggest iron ore producers, developed three salt farms, Lake McLeod, Dampier and Port Hedland, with Lake McLeod the most southerly and distant from the company’s iron ore operations.

Selling the Lake Mcleod salt farm, which occupies a small section of the 2000 square kilometre (770 square mile) lake will see Rio Tinto to focus on its two remaining salt farms while enabling Liveris and his partners to enter the salt business ahead of K+S and Stokes who has just completed a fresh capital raising exercise and rebranding Mardie as a “salt first” project.

For Australian born Liveris, a chemical engineering graduate from the University of Queensland, the investment in salt production is effectively a trip back to the future because salt is a basic building block of multiple chemicals used in the production of polyvinyl chloride (PVC), polyurethane, glass, detergent, textiles and as a road de-icer.

It’s the chlorine in salt which is a combination of sodium and chlorine (NaCl) which is the more valuable element today though sodium could enjoy a surge in demand if battery makers are able to perfect a salt based product to compete with lithium-ion batteries.

Liveris was able to combine his technical qualification with management skill to move rapidly up the ranks at Dow after joining the company in 1976 in Melbourne, before moving to Hong Kong and then to U.S. where he was appointed chief executive of Dow in 2004 and chairman until retiring in 2018.

He is now a director of IBM, Saudi Aramco, and Novonix as well as chairing the organizing committee seeking to attract the 2032 Olympics to Brisbane, capital of Queensland.

At Leichhardt, Liveris has been overseeing the planning of the Eramurra salt project since 2018 but appears to have decided to accelerate the entry into the business through the Lake McLeod acquisition.

With a capacity of three million tons a year Lake McLeod is a significant source of industrial salt and expected to benefit from a salt price which is around $50 a ton but tipped to rise to between $62-and-$67 a ton.

The salt rush is likely to stir environmental concerns because all of the solar salt farms on Australia’s west coast are close to waterways used by migrating birds including several classified as endangered such as the red-necked stint and great sand plover.

A benefit of the salt ponds is that they are a source of food for migrating birds.

The northern section of Leichhardt’s newly acquired Lake McLeod project is a designated Key Biodiversity Area for Birdlife Australia.