Mineral Resources managing director Chris Ellison. Photo: Attila Csaszar

MinRes confirms $2bn+ spend

Tuesday, 24 July, 2018 - 13:12

Mineral Resources has for the first time revealed the cost of two major projects, saying it will spend $610 million building its lithium concentrate processing plant, which is due to start production later this year, and up to $1.6 billion on its proposed lightweight rail system.

MinRes released a statement to the ASX today, summarising a number of issues covered in an investor discussion call last week, which sent its share price up about 7 per cent at the time.

The company is planning a three-train processing plant at its Wodgina lithium project in the Pilbara, with a capacity of 750,000 dry metric tonnes of 6 per cent spodumene concentrate per annum.

“The company’s forecast capital costs for the project is expected to be in the order of $610 million, with a significant portion of these costs already committed,” MinRes said.

“The main items of capital expenditure include the new crushing plant, the three spodumene concentrate trains, an airport, the gas pipeline and the power station.”

MinRes has also forecast a capital expenditure of $1.4 billion to $1.6 billion for its lightweight rail system.

It disclosed today the rail system had been modelled on a base case of 20 milion tonnes per annum, but would have a total capacity of 50mtpa.

The rail project includes a 320-kilometre rail system, a fully automated stockyard and development for one cape size carrier berth at South West Creek at Port Hedland.

The rail system is design to transport iron ore and other bulk commodities from MinRes's mining operations to Port Hedland, where the company is also aiming to build a new stockyard and berth at South West Creek.

In addition to the lithium concentrate plant and the light rail system, MinRes flagged in May a capital cost of $US600 million to build two 28,000-tonne lithium hydroxide processing modules at Wodgina, after announcing plans to sell a minority stake in the project.

The company said offers were expected in mid to late August, with an announcement on a transaction expected by the end of the year.