Ellison gets brusque in MinRes update

Mineral Resources boss Chris Ellison has provided some choice comments for sell-side analysts in the latest quarterly update, while also saying the company does not want to trap its capital in China. 

Updating the market on the three months to June, MinRes revealed spodumene concentrate shipments from its Wodgina operations had fallen 25 per cent quarter on quarter.

Shipments across its lithium operations came in at 143,000 tonnes, marginally short of the 150,000t-170,000t it had forecast.

MinRes' lithium division has been in the spotlight of late amid a series of strategic changes.

In June, MinRes and Mt Marion joint venture partner Ganfeng agreed to terminated a deal to convert spodumene concentrate to lithium battery chemicals.

Last week, MinRes abandoned plans to put $1 billion towards developing lithium chemicals plants in China, instead affirming intentions to build its own on home soil.

With plans on that front seemingly unclear, MinRes has indicated it will continue processing spodumene concentrate in China over the next two to three years. 

Under a previous agreement, MinRes was to buy a 50 per cent stake in two refineries being developed in China by its joint venture partner, US lithium giant Albemarle.

MinRes will have a 50 per cent stake in Wodgina once the revsied deal has been approved by the Foreign Investment Review Board. 

Shedding further light on the decision on Wednesday, Mr Ellison said investment risk associated with China was too high.

“When Australia is trading with China and Australia doesn’t go along with some of the social decisions ... they go and ban our wine, they go and ban our coal, they ban a whole bunch of stuff.

“The risk for Australians in China is high and we don’t want to trap money in China.”

Mr Ellison maintained that the lithium side of the business was running well, reminding those on the call that it was still in its growth phase.

He was also upbeat on the commodity’s demand fundamentals, asserting that supply would continue to lag against demand.

The CEO also spoke candidly regarding observations made by analysts about his company’s cash flow and lithium strategy, deeming recent criticisms as ‘total rubbish’ and ‘horses***’.  

He also revealed he had plans to build a gas plant in Western Australia’s Perth Basin, with further details expected to be revealed at the end of 2023.

“We’ve got external engineering engaged, we pretty much know what size we want to build,” he said, adding that the move would likely be welcomed by the state government amid concerns for local supply. 

MinRes shares closed the day up 4 per cent to trade at $73.82.