Mineral Resources boss Chris Ellison says he sees no need to slow or shut down the Mount Marion lithium mine, despite the mounting closure list in the West Australian lithium sector.
Mr Ellison told shareholders at the Mineral Resources annual meeting in Perth on Wednesday that he still expected the Kalgoorlie lithium mine to produce 360,000 to 380,000 tonnes of lithium concentrate this financial year, at an average cost of just under $600 a tonne.
But, speaking only weeks after MinRes and lithium giant Albemarle mothballed their Wodgina lithium project, Mr Ellison acknowledged the challenges facing lithium producers, telling shareholders the company’s earnings were being driven by its iron ore and mining services arm. READ NEXT
“If you were around last year, we were rock stars for lithium and down and out on iron ore. And this year, who cares about lithium? It’s all about iron ore,” he said.
Mr Ellison said concentrate grading 6 per cent lithium was selling for about $US600 ($879) a tonne in recent months, down from an average of $1182 last financial year.
Early last year the WA lithium sector was booming, with new mines coming into production and construction of downstream processing facilities gathering momentum.
But a sharp plunge in prices — caused by a glut of lithium concentrate supply, slower-than-expected build-out of plants to convert concentrate into lithium carbonate or hydroxide, and the Chinese government’s decision to cut electric vehicle subsidies — led to a price plunge.
This year a suite of WA lithium producers including MinRes, Pilbara Minerals and Galaxy Resources have cut back production or mothballed mines, and Alita Resources collapsed into administration.
Only Altura Mining’s Pilgangoora project, the tier-one Greenbushes mine in WA’s southwest, and MinRes’s Mount Marion mine are still running full tilt.
Speaking on the sidelines of the annual meeting, Mr Ellison said Mount Marion was the major concentrate supplier to its half-owner, Chinese lithium major Ganfeng, and his conversations with MinRes’s joint venture partner indicated it was “highly unlikely” demand for its product would slow.
“We’re fortunate that we’ve got Ganfeng as a shareholder. They are very active with their product. They go through to hydroxide and they also go through to making their own batteries,” he said.
MinRes and Albemarle mothballed the Wodgina mine the day the two companies closed a $US1.2bn joint venture deal, with MinRes handing Albemarle a 60 per cent stake in the mine for $US820m and a 40 per cent stake in a lithium hydroxide plant being built in WA’s southwest.
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