https://thewest.com.au/business/mining/mineral-resources-and-ganf...

https://thewest.com.au/business/min...rion-by-increasing-funding-to-600m-c-19059135


Mineral Resources and Ganfeng shun mothballing the loss-making Mt Marion by increasing bailout

Adrian RausoThe West Australian
Tue, 17 June 2025 2:57PM



Lights on at the Mt Marion lithium mine. Credit: MinRes


Mineral Resources and Ganfeng in November poured in $300 million of cash to keep the ailing Mt Marion lithium mine afloat and now another $300m could soon be on the way.

China’s Ganfeng told investors within the past week it had approved a $150 million loan to the joint venture entity controlling the Mt Marion mine.
MinRes, which holds a 50 per cent stake in the JV entity, originally said it was matching the contribution before later clarifying it “may” match the contribution.

“From time to time, MinRes and Ganfeng advance funds to Mt Marion Lithium (MML), primarily to fund the forward capital program,” a MinRes spokesman said.
“Most recently, Ganfeng advised it had obtained board approval to make available, by way of a loan, up to $150m to MML, should those funds be required by MML through the course of the 2026 financial year.
“While the MML board has not finalised its budget for FY26, this action by Ganfeng is both prudent and welcome to provide capital flexibility to the project.
“MinRes may, subject to finalisation of MML budgets and internal capital decision-making, make an equal advance available to MML if required.”

Tipping money into the JV via a loan, rather than a direct investment, is beneficial for tax deduction purposes.
The new funds will be “mainly used for the daily operation” of the loss-making lithium mine, according to a translated statement lodged by Ganfeng on **promotion blocked** of Hong Kong.
A MinRes spokesman, meanwhile, said the money provided will “primarily fund capital expenditure, including mine development and processing plant upgrades”.
He said MinRes’ share of the cash injection would not be funded by debt.
“Our share is sourced from the group’s existing working capital reserves and as such there is no impact to the debt position.”

Nervous investors have kept a close eye on MinRes’ tight liquidity position over the past year. MinRes had debts of $5.8 billion and just $450m of cash by the end of the March quarter.

Despite the cash crunch, the MinRes spokesman told The West Australian two weeks ago there were no plans to put Mt Marion or its other active loss-making lithium mine, Wodgina, into care and maintenance in the near-term. Wodgina is owned evenly by MinRes and the United States’ Albemarle.
“In response to the low lithium price, MinRes implemented a cost reduction program at Mt Marion and Wodgina in the second half of 2024 and placed Bald Hill in care and maintenance,” the MinRes spokesman said on Tuesday.
“Decisive action to lower costs ensures our two largest lithium sites remain well placed to continue to operate through the cycle and to capitalise when prices rebound.”

A wholly-owned MinRes subsidiary, CSI Mining Services, is the mining services contractor for both lithium mines and derives a big chunk of its revenue from the two operations.
The new loans for Mt Marion are not the first time in recent months vast sums of money have been poured into the Goldfields operation to keep it afloat amid a prolonged lithium price recession.

It has not been reported previously that MinRes and Ganfeng each dished out $150 million of loans to the Mt Marion JV entity in November.
That first bundle of money has presumably already been fully, or mostly, chewed up by Mt Marion — a mining operation that turns ore into a relatively low-grade spodumene concentrate product.

Ganfeng stated Mt Marion posted a $44.6m loss in 2024 and was in the red for the first quarter of this year.

The West understands the cash-strapped MinRes is mulling whether to exhaust the full $150m from its new contribution, which would enable major mine upgrades, or just draw down the minimum needed to keep Mt Marion chugging along.