Industry issues: A mine worker oversees work in progress in Australia. The country’s corporate watchdog, the Australian Securities and Investments Commission, is also investigating Mineral Resources and Ellison. — Bloomberg
CANBERRA: Embattled Australian miner Mineral Resources Ltd will immediately shut its Bald Hill lithium project, citing the crash in prices of the key battery material.
The Western Australia mine, capable of producing 150,000 tonnes of spodumene concentrate a year, was acquired by Mineral Resources last year.
The announcement of its closure comes after the company said earlier this month that founder billionaire Chris Ellison will step down as managing director after an internal probe into undeclared payments found he had engaged in “profoundly disappointing” conduct.
“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,” Mineral Resources said in a statement yesterday.
Its shares fell as much as 7.8% in Sydney after the announcement.
It’s at least the fifth lithium project in Australia to be curtailed this year amid the price rout.
The battery metal has fallen more than 80% from a peak in late 2022 amid oversupply and underwhelming demand from electric vehicle battery manufacturers.
Meanwhile, in a response to compliance queries from the Australian Securities Exchange on which the company is listed, Mineral Resources said Tuesday that it classified historic payments between it to overseas entities owned by outgoing Ellison as related-party transactions that should have been disclosed to shareholders.
The company’s internal probe into Ellison found that he did not act with integrity when he financially benefited from Mineral Resources’ payments made to companies owned by him.
The Australian Securities and Investments Commission, the country’s corporate watchdog, is also investigating Mineral Resources and Ellison – whom the board has said will step down within 18 months – will remain as managing director until a successor is found.
The board is expected to be grilled by disgruntled shareholders over the matter at its annual meeting on Nov 21.
Since this year’s peak in May, Mineral Resources’ market value has more than halved.
Investors did welcome the company’s Oct 31 announcement it was selling Australian oil and natural gas exploration permits in a deal worth as much as A$1.1bil (US$718mil) to billionaire Gina Rinehart’s Hancock Prospecting Ltd.
Other lithium producers have also been hit by the price slump.
On Monday, Liontown Resources Ltd said it would trim production from its flagship Kathleen Valley lithium project, while last month Pilbara Minerals Ltd said it would suspend a processing plant.
Earlier this year, Arcadium Lithium Plc – which is now being purchased by Rio Tinto Group – halted output from its the Mt Cattlin mine, while Albemarle Corp shut half of its production capacity. — Bloomberg
