MinRes cuts lithium DSO shipments
Mineral Resources slashed production of raw lithium ore by more than half in the September quarter in line with plans to wind back exports of the product ahead of a likely cessation of shipping at the end of the year.
Production of direct shipping ore from the Wodgina mine south of Port Hedland fell to 350,000 tonnes in the recent quarter from 845,000t in the three months to the end of July, while shipping rates fell from 754,000t to 422,000t over the same period.
The Chris Ellison-led company flagged the slowing of DSO production in June, saying it could extract significantly more value from the Wodgina ore body by converting it to a higher-grade lithium spodumene concentrate.
On an analyst, investor and media site visit to Wodgina recently, Mr Ellison said the company had “pretty much jammed China up with” DSO.
“It certainly turned us into the largest lithium units exporter in the world for a period. We earned an awful lot of money out of it, that’s what we do,” he said.
MinRes recently pushed back delivery of its new $610 million, 750,000tpa lithium concentrate plant by eight weeks with first production now expected by the end of March.
The company cited the late delivery of long-lead items and congestion in Perth fabrication facilities as reasons for the delay.
It is also expected to announce soon whether it will sell a 49 per cent stake in Wodgina to help fund a 100,000tpa lithium hydroxide plant at the site.
Mr Ellison said the company would only consider selling a stake in Wodgina if it could “get the right number” and a partner who could help with plant design, product development or delivering quality customers.
He indicated MinRes was likely to begin building the lithium hydroxide plant next year subject to board approval. “It will probably be a goer because they are extremely profitable,” Mr Ellison said.
The company recently upgraded the Wodgina resource by 11 per cent to 259.1Mt at 1.17 per cent lithium oxide.
MinRes shares closed off 7¢ at $14.25 yesterday.
Chris Ellison at the under-construction crushing facility at Wodgina.