Posted on 14 Nov 2024
Australian miner Mineral Resources (MinRes) announced Wednesday it would put its Bald Hill mine in Western Australia under care and maintenance amid the lithium market price slump.
The decision comes after a strategic review due to the “prolonged period of low spodumene concentrate prices,” the company says. Kallanish understands around 300 employees will be impacted by the move.
MinRes now joins a group of companies that have announced production cuts or mine suspensions following the slump in lithium prices. An oversupply of the mineral, combined with the slower-than-expected EV demand, has seen lithium prices plunge over 80% since the 2022 highs.
This week, Australian lithium producer Liontown Resources trimmed production targets for its Kathleen Valley lithium project citing the market downturn.
MinRes expects the move to help preserve cash and the value of Bald Hill’s spodumene orebody once market conditions improve. The company plans to sell the final concentrate shipment from the mine in December. It has also revised down the shipped volumes forecast for fiscal year 2025 to 60,000 dry metric tonnes (dmt), from the previous estimate of 120,000-145,000 dmt.
“Bald Hill is a significant value opportunity for MinRes once conditions in the lithium market improve,” comments MinRes managing director Chris Ellison. “Placing Bald Hill on care and maintenance is a prudent decision but one not made lightly.”
“We will continue to monitor lithium prices and site operating costs with a view to recommencing operations once conditions improve,” the executive adds.
MinRes has also announced a 168% increase in Bald Hill’s mineral resource estimate from 21.7 million tonnes in June 2018 to 58.1m t at 0.94% lithium oxide.
Last week, the miner said its managing director and founder, Chris Ellison will step down within 18 months after an investigation into his private tax settlement and related-party deals. Shares of the miner have since fallen and were down 7.2% at the time of writing.
Source:Kallanish
