MinRes to invest $600m in lithium
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Mineral Resources has disclosed that its planned lithium processing projects in the Pilbara will cost more than $600 million to build, with managing director Chris Ellison also revealing ambitions for more downstream processing projects.
Mr Ellison mapped out the company’s ambitious growth plans during an investor conference call today, designed to clear up confusion surrounding its $480 million scrip bid for listed company AWE.
AWE is the operator and half-owner of the large Waitsia gas field two hours north of Perth and is a key part of Mr Ellison’s growth plans.
“This asset would form a major pillar of our business and give us a lot of growth opportunities over 25 years,” Mr Ellison said.
Its main attraction was to provide an assured supply of gas for the company’s mining and processing operations.
“I need to get them onto clean energy and I need a long-term, 20-year horizon fixed cost,” he said.
The company’s short-term growth projects include building a lithium concentrate plant, which is already under way at its existing Wodgina mine, followed by a lithium carbonate plant at the same location.
Mr Ellison said the lithium concentrate plant (also known as spodumene concentrate) would cost about $220 million.
The lithium carbonate plant would have two 25,000 tonnes per annum processing trains, and each would cost about $200 million.
In addition the company plans to build a synthetic graphite plant at Kwinana using technology developed by ASX-listed Hazer Group.
Together, the company expects these three plants to generate annual revenue of about $1.4 billion.
Mr Ellison also revealed his aspiration to develop a fourth downstream project, without providing details.
“When I’ve finished building these three plants in two-and-a-half years from now, I hope there is another downstream plant sitting behind that,” he said.
It’s not just the downstream processing plants he wants to power with gas.
MinRes already operates across 26 mine sites and Mr Ellison plans more.
“By the time I get them powered up, 26 will probably turn into 40 sites,” he said.
He also has ambitions to build a lightweight rail link capable of transporting 50mt of iron ore every year to Port Hedland, and establish a wholly owned port facility.
In addition to updating its growth strategy, Mineral Resources has also reaffirmed its production targets for the current financial year.
The company’s shares closed 3.5 per cent higher today at $17.61 per share.
They fell to $16.39 on Monday after its AWE bid was announced and had reached an all-time high of $20.23 in late November.