MinRes to turn nickel plant into lithium processing hub

Mineral Resources has inked a $15 million deal to acquire a nickel concentrator plant with plans to repurpose the site into a lithium processing hub in the Goldfields.

Chris Ellison-led MinRes told the market it had entered into a binding head of agreement with nickel explorer Poseidon Nickel to acquire the Lake Johnston plant and tenure.

MinRes said it intends to develop the site into a lithium processing hub in the southern Goldfields region. It would process feed from its nearby lithium assets Bald Hill and Mt Marion.

The $15 million deal comes amid the drastic fall in nickel prices, which has impacted seller Poseidon Nickel’s WA operations, including deferring the restart of its long paused Black Swan nickel project. 

The Lake Johnston nickel concentrator plant, with a flotation circuit, has a front-end capacity of 1.5 million tonnes per annum, and can be converted to treat lithium ore.

The 86 square kilometre site includes an airstrip, 200-person camp, workshops and labourites, alongside one exploration licence and 10 mining leases.

MinRes said repurposing the brownfields site would reduce its approvals timeline by around two years compared with a greenfields development, alongside “significant” capital savings.

Mr Ellison said this was an exciting opportunity to develop MinRes’ third lithium processing hub in the Goldfields and the first to include floatation capacity to treat fines.

“We intend to bring our expertise in spodumene production to Lake Johnston, which has the potential to service projects throughout the world’s most prospective region for lithium,” he said.

ASX-listed Poseidon will retain exposure to the project through a 0.75 per cent royalty on lithium minerals and 1.5 per cent on net smelter return on all other minerals and metals  produced from the project tenements.

MinRes' shares were up slightly by 0.4 per cent to $66.18 at 9AM AWST.