Mineral Resources Achieved Annual Production Target, Emphasizing Cautious Expansion on Lithium

On 26 July, the Australian lithium producer, Mineral Resources, reported production and sales performance across its three key projects—Mt Marion, Bald Hill, and Wodgina—in the June 2024 quarter.

At Mt Marion, the last quarter has seen 89k dmt of spodumene concentrate production and 67k dmt of shipments. The realized spodumene concentrate price was US$1,178/dmt on a SC6 basis. On a year-on-year (YoY) basis, total production rose by 40% to a record 328k dmt, with SC6 shipments up 46% YoY to 218k dmt, meeting the guidance of 190-220k dmt. FY24 FOB SC6 Costs are at A$750/dmt.

Bald Hill, which started production in late 2023, saw a 19% quarter-on-quarter (QoQ) increase in spodumene concentrate production, reaching 35k dmt. Shipments increased by 23% QoQ to 27k dmt SC6, with realized price at US$1,198/dmt.

Wodgina experienced a 28% QoQ rise in spodumene concentrate production to 63k dmt, driven by improved plant recoveries from higher-quality feed despite a crusher belt failure in June. The realized spodumene concentrate price was US$1,243/dmt on a SC6 basis. FY24 FOB SC6 costs are expected to be $974/dmt. Lithium battery chemicals production in FY24 totaled 18,385 tonnes, a 60% YoY increase, with sales of 23,995 tonnes.

During the recent earnings call, Mineral Resources outlined its cautious approach to expanding lithium production in light of current market conditions where prices currently do not justify increasing supply. Despite record production and shipments, the company remains wary of adding new supply by activating Train 3 at Wodgina. "We don't want to add supply into the market with no real benefit," said Chris Chong, the Investor Relations Manager.

The company emphasized that cost management remains a priority, with improvements in recovery rates at Wodgina and strategic plans optimizing current assets. The regional consolidation strategy remains unchanged, and the company would still contemplate exploring new deposits. FY25 production guidance and more details will be disclosed in the full year report in late August.

Author: Hongqiu Su | Battery Metals Analyst Associate | London Office, Shanghai Metals Market
Email: lilysu@smm.cn