Mineral Resources cements lithium position

Australia-based mining group Mineral Resources has cemented its position as one of the world's biggest producers of hard rock lithium units, moving ahead with plans to become a significant producer of downstream lithium products.

Exports of direct shipping lithium ore from its wholly-owned Wodgina mine in Western Australia (WA) rose by 2.8mn t to 3.5mn t in the 2017-18 fiscal year to 30 June, all of it shipped to China from Port Hedland.

Lithium concentrate deliveries to China from the Mount Marion mine in WA rose by 266,000t to 382,000t. Mineral Resources owns 43.1pc of the mine, entitling it to 130,500t of the output that comprises concentrate grading 6pc and 4pc lithium oxide.

Outlining its growth plans in its 2017-18 results presentation, the company said it is on track to start commissioning its first lithium concentrate plant at Wodgina in the last quarter of this year at an increased production rate of 278,000 t/yr. The second and third concentrator modules will start commissioning in the first and second quarters of next year, each with increased production rates of 278,000 t/yr, taking total output to 834,000 t/yr once all three plants are in full production.

Mount Marion's output of 435,000t of wet lithium concentrate was achieved in 2017-18, producing a mix of 6pc and 4pc lithium oxide concentrate. Volumes are expected to be similar in 2018-19 but are expected to rise to 506,000t in 2019-20, all of which will grade 6pc lithium oxide. Mount Marion's other shareholders are the project's offtake partner China's Ganfeng Lithium with 43.1pc and Australia's Neometals with 13.8pc that is also considering developing a lithium hydroxide plant.

Mineral Resources' board has approved in principle the development of two plants to each produce 28,400 t/yr of lithium hydroxide at a cost of $300mn each. A definitive feasibility study will be carried out to progress this project and determine the location of the plants.

Closely linked to the company's hydroxide plans are its previously stated intention to sell up to 49pc of the Wodgina mine. If this sale takes place, the joint-venture partner will be offered the opportunity to participate in the hydroxide conversion project that could increase its capacity to 113,600 t/yr if all of Wodgina's concentrate is converted.

Mineral Resources forecasts Mount Marion in 2018-19 to increase its exports to 409,000t. Wodgina's direct shipping ore exports are expected to fall sharply to 660,000t as material is redirected to concentrate plants, while maiden lithium concentrate exports are expected to total around 240,000t as concentrators come on stream. It also expects to export 10.28mn t of iron ore.

Wodgina is the world's largest operational hard rock lithium deposit with a mineral resource of 234mn t grading 1.2pc lithium oxide and a reserve of 142mn t also grading 1.2pc lithium oxide. The mine lifespan is estimated at 28 years but this could be increased as exploration continues.

Mineral Resources reported a 16pc rise in revenues to A$1.7bn ($1.24bn) in 2017-18, while its profit rose by 35pc to A$272mn.