- Capital expenditure estimated at $490 million.
- Upgrade supports mine life through access to additional mineral resources.
- Payback period at the current spot spodumene price of less than one year.
- Removing lower-grade product to deliver a single product.
Mineral Resources (ASX:MIN) has continued to reboot its Australian lithium business with a positive final investment decision on a $490 million investment in the Mt Marion project in Western Australia.
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MinRes and joint venture partner Jiangxi Ganfeng have given the go-ahead to construct a flotation plant and develop underground mining at the Mt Marion lithium operation.
The total capital investment is comprised of a $240 million flotation plant, $220M in underground pre-production development and $30M in non-processing infrastructure.
MinRes’ MD, Chris Ellison, said the payback period at the current spot spodumene price of approximately US$2,700 per tonne is less than one year.
“This high-return brownfield investment sets up Mt Marion for decades to come,” he said,
“Underground mining and flotation will work together to access deeper high-grade ore, lift recoveries and produce a single five per cent product.”
Mining initially began at Mt Marion in CY16 as an open-pit lithium mine. From FY28, Mt Marion will operate as a combined open-pit and underground operation, with underground ore from open stoping supplementing up to 40% of processing feed.
The combination of a flotation plant with underground mining is expected to support mine life by providing access to additional mineral resources below the existing open pit and improve plant recovery towards 70%.
Tendering for an underground mining contractor is in progress, with the central underground development expected to commence in Q1 FY27.
Construction is targeted to commence in Q1 FY27, with commissioning and ramp-up expected in 2H FY28.
Earlier this month, MinRes restarted operations at its 100%-owned Bald Hill lithium mine. Mr Ellison said that decision was underpinned by a significant and sustained recovery in lithium prices, supported by diligent planning over recent months.
Bald Hill was placed on care and maintenance in late CY24 to preserve capital and retain the value of sizeable mineral resource until market conditions improved.
Restart costs, to be incurred in Q4 FY26, including working capital, are estimated at $20M.
MIN is steady at $71.91. Mkt cap $14.05B.
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