Mineral Resources Limited (ASX: MIN) has provided an update on operations at its Bald Hill lithium mine, located 50km south-east of Kambalda in the Goldfields region, and an upgrade to the project’s Mineral Resource.
Operations update
Following a strategic review and in light of a prolonged period of low spodumene concentrate prices, Bald Hill will be safely transitioned into care and maintenance from this week.
The transition to care and maintenance will preserve cash and the value of Bald Hill’s spodumene orebody for when conditions in the global lithium market improve.
Mining and mobile maintenance operations will cease from today, with the spodumene concentrate plant and accommodation village scheduled to temporarily cease operations by early December 2024.
About 300 employees will be impacted and all Bald Hill employees will be prioritised for redeployment across MinRes’ other operations in Western Australia. Where redeployment opportunities cannot be found, a redundancy process will be followed.
The final shipment of Bald Hill spodumene concentrate is anticipated to be sold in December, with FY25 shipped SC6 volumes now expected to be approximately 60k dry metric tonnes, versus prior volume guidance of 120-145k dmt SC6 equivalent.
A team of about 10 employees will remain on site to coordinate production ramp-down and care and maintenance activities.
When the global lithium price improves to a level that incentivises a restart of Bald Hill, a ramp-up back to full operation is anticipated to take approximately four to six weeks.
During care and maintenance, MinRes will continue to optimise mine plans, scale and operating structure ahead of any future restart.
Updated Mineral Resources statement
MinRes also wishes to provide an updated Mineral Resources statement for Bald Hill as of 30 June 2024.
The updated Bald Hill Mineral Resources of 58.1Mt at 0.94% Li2O is a 168% increase from the prior June 2018 estimate of 21.7Mt.
This change is the result of the inclusion of a large drilling dataset completed since the June 2018 estimate, which aided in the re-interpretation, geological modelling and resource estimation workflows for the 2024 estimate.
The updated Mineral Resources confirms the inherent value of the Bald Hill project and underscores the importance of preserving the orebody for when global lithium market conditions are more favourable.
Separately, recent exploration work has identified additional resource potential across the tenure.
“Bald Hill is a significant value opportunity for MinRes once conditions in the lithium market improve,” managing director Chris Ellison said.
“Placing Bald Hill on care and maintenance is a prudent decision but one not made lightly. The decision aligns with the work we have done across the company in recent months to reduce costs.
“The significant upgrade to the Mineral Resources statement is evidence that Bald Hill is a high-quality asset with a long-term future.
“We will continue to monitor lithium prices and site operating costs with a view to recommencing operations once conditions improve.”
