Mineral Resources may sell stake in Mt Marion lithium project

JOHANNESBURG (miningweekly.com) – Mining infrastructure services firm Mineral Resources is considering divesting its shareholding in the Mt Marion lithium joint venture (JV) project, in Western Australia.

Mineral Resources, which in June this year increased its stake in the project to 43.1% after exercising an option to acquire a further 13.1% interest, confirmed its intention to sell its stake in a presentation on its 2016 financial year-end results, published on Thursday.

Other JV partners in Mt Marion include China’s largest lithium producer, Ganfeng Lithium, and Australian firm Neometals, with equity interests of 43.1% and 13.8%, respectively.

Mineral Resources stated that it would retain its life-of-mine build, own, operate contract. The company reported that construction activities for Mt Marion were “well advanced” and were progressing according to plan. Construction started in December 2015 and is expected to be completed in the 2017 financial year.

The Mt Marion project will produce 280 000 t/y of 4% to 6% lithium spodumene concentrate.

First production shipment is slated for October 2016.

Meanwhile, Mineral Resources, operating across 26 sites and five different commodity types, reported underlying net profit of A$110-million, which was in line with the prior year. Revenue decreased from A$1.30-billion to A$1.18-billion in the year under review.

However, the company posted a full-year loss of A$26-million, which included A$130-million of one-off, noncash impairment charges, relating to a reduction in the carrying value of its investment in manganese and a reduction in the carrying value of iron-ore tenements.

“The underlying financial results continued to reflect the financial strength and stability of the group’s core mining services business and the group’s focus on managing factors over which it has control, such as mining/processing costs and productivity enhancements, during what was a challenging year in terms of the general economic conditions and substantially lower US dollar iron-ore prices,” MD Chris Ellison commented in a statement.