On 12 April, Mineral Resources (MinRes) announced the initiation of the preliminary development works for underground mining at the Mt Marion lithium operation in Western Australia. The underground resource at Mt Marion has now doubled to 19.3 Mt at 1.22% Li2O, and a full underground study is targeted for completion by mid-2024.
The company plans to transition Mt Marion into an open pit and underground mining operation. Earlier this year, Chris Ellison, the Managing Director of MinRes said the tentative operation plan will be 20% underground and 80% open pit in the long run. He also provided an optimistic estimate of approximately 18 months until the start of the underground operation, targeting the year 2025.
Similarly, Liontown Resources, the owner of another Western Australian lithium project Kathleen Valley, announced in November 2023 that it had started firing blasts to create the underground portals at Mt Mann pit. The project is expected to come online in mid-2024.
Australian lithium miners are increasingly exploring underground mining options, which are expected to elevate or at least maintain Australian hard rock lithium cost curves in the foreseeable future. This shift is driven by the inherent higher-cost nature of underground mining, which arises from factors such as geological complexity, ore grades, and specific operational challenges. Like MinRes is to integrate products from both underground and open pit mining operations, it will be key to observe how miners will put forward strategies to cope with the uncertain market prices, its own upward production cost curves, and capital expenditures.
Author: Hongqiu Su | Battery Metals Analyst Associate | London Office, Shanghai Metals Market
Email: lilysu@smm.cn
