Mineral Resources Limited (ASX: MIN) has announced that, in response to unprecedented global customer demand for lithium products, the company has agreed with its joint venture partners to increase production from the Wodgina and Mt Marion spodumene mines, based in Western Australia.
Given the strength of market conditions, MinRes and Albemarle Corporation have agreed to accelerate the resumption of production from Train 2 at Wodgina. First spodumene concentrate from this train is expected in July 2022. MinRes is well-progressed with its preparations to recommence operations at Train 1, as previously announced, with first spodumene concentrate from this train expected in May 2022. Each train has a nameplate capacity of 250,000 dry metric tonnes of 6% product.
MinRes continues to work with Albemarle to finalise binding agreements to execute the expansion of the MARBL Lithium Joint Venture on terms consistent with the company’s announcement on 9 February 20222 . Once concluded, the revised terms will see MinRes responsible for operating Wodgina and Albemarle responsible for operating downstream conversion assets. MinRes will move to a 50% ownership stake in Wodgina.
All spodumene produced at Wodgina will ultimately be processed through conversion facilities either built or acquired by a new 50/50 joint venture between MinRes and Albemarle. MinRes will be responsible for contributing its share of the capital costs of this conversion capacity. Any spodumene produced in excess of joint venture conversion capacity will be either toll-converted or sold into the open market.
MinRes and Albemarle have also agreed to review the state of global lithium market towards the end of this calendar year to assess timing for the start-up of Train 3 and the possible construction of Train 4.
Mt Marion Update
Following the completion of project studies previously foreshadowed along with positive metallurgical test work results, MinRes and its 50/50 joint venture partner Jiangxi Ganfeng Lithium Co. Ltd have agreed to upgrade the Mt Marion processing facilities. This is expected to result in Mt Marion’s spodumene concentrate production capacity increasing immediately from 450,000 tonnes per annum to 600,000 tonnes per annum of mixed grade product by April 2022.
A second stage of expansion incorporating a Dense Media Separation (DMS) plant upgrade, a new crushing circuit and an upgrade to the mine camp should increase installed plant capacity to a run rate of 900,000 tonnes per annum mixed grade by the end of calendar 2022. The equivalent number of tonnes at a grade of 6% is projected to be approximately 600,000 tonnes per annum. Capital expenditure for both stages is expected to be less than $120 million.
In addition to the increased production from its Wodgina and Mt Marion operations, MinRes is also pleased to announce that spodumene concentrate feed has been introduced into Train 1 of the Kemerton Lithium Hydroxide plant, owned 40/60 with Albemarle. First product from this train is expected by May 2022. Train 2 is targeted for mechanical completion in quarter 4 of 2022, with product expected in that quarter.
“For some time now the world has seen extraordinary demand for lithium, driven by the strength of the electric vehicle market,” Mineral Resources managing director Chris Ellison said.
“This demand has resulted in a substantial increase in lithium prices, with pricing expected to remain strong for the rest of this decade.
“I’m proud of the great work our team have done at Wodgina and Mt Marion. As we continue to significantly expand our spodumene supply from these Tier 1 mines in Western Australia, we look forward to creating many more long-term jobs and supporting the surrounding communities for decades to come.
“With a world-class portfolio of highest-quality, long-life lithium assets in a Tier 1 mining jurisdiction, we are well positioned to capitalise on the continued growth of the global electric vehicle market.”