MinRes and Ganfeng terminate lithium deal

Mineral Resources and Mt Marion joint venture partner Ganfeng have terminated a deal to convert spodumene concentrate to lithium battery chemicals, and revised guidance for its lithium assets.

Mt Marion previously operated under a deal where Ganfeng would process spodumene into lithium hydroxide for sale into the battery market, but today confirmed that no payments had been made under the arrangement in the 2023 calendar year.

Prior guidance for the production between 19,000 and 21,300 tonnes of lithium battery chemicals has been withdrawn, and MinRes continues to sell its share of spodumene concentrate to Ganfeng at market prices.

Managing director Chris Ellison said the adjustment to the JV arrangement was a good outcome for the project.

“The early termination of the Mt Marion toll treatment agreement with Ganfeng is a sensible outcome given prevailing market prices, with our world-class lithium assets well placed to capitalise on growing demand,” he said.

The toll treating deal between the partners was struck in February last year, after MinRes took a 51 per cent stake in the project.

Under the deal, Ganfeng converted Mt Marion spodumene to lithium hydroxide in China. The initial deal was for a term of seven months from May and included an option to extend.

The JV also revealed it had completed the construction of a processing plant at Mt Marion this month, with commissioning underway.

The first major exploration program at the project since it acquired its interest in the asset was also completed, with early results suggesting opportunity for open pit extensions and underground potential.

North Pit deep extension drill hits included 51m at 1.3 lithium oxide from 410m, including one section measuring 32m at 1.5 per cent from 411m.

RC drilling discovered an additional mineralised pegmatite outcropping extending from the project’s north and central pits.  

Meanwhile a delay in a second spodumene shipment pushed out to July from June meant the company revised its FY23 spodumene concentrate shipment guidance at Mt Marion down from the lower end of 160-180 million tonnes, to 145-150mt.

MinRes also indicated that financial year output from its Wodgina lithium project would be at the lower end of guidance for both spodumene concentrate and lithium battery chemicals.

The company previously reported spodumene concentrate guidance of 150-170mt and lithium battery chemicals guidance of 11,500-12,500t.

Wodgina FY23 spodumene concentrate free-on-board cost guidance increased to $925-975 per tonne, from $850-900/t. Wodgina is operated under the MARBL joint venture with Albemarle.

Albemarle and MinRes agreed to restructure their joint venture in which they operate the Wodgina mine in February, under which MinRes is to lift its stake in the mine 40 per cent to 50 per cent and continue as operator.