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Highlights
- Mineral Resources’ Bald Hill lithium mine to enter care and maintenance, impacting 300 jobs.
- Lithium prices have been pressured by excess supply and declining electric vehicle (EV) demand.
- Final shipment for FY25 expected in December, with revised sales target of 60,000 dry metric tonnes (dmt).
Australia's Mineral Resources Limited (ASX:MIN) announced plans on Wednesday to place its Bald Hill lithium mine in Western Australia into care and maintenance, a move that will impact approximately 300 jobs. The decision, part of a broader strategic review, reflects the ongoing challenges posed by a steep decline in battery metal prices, driven by a surge in global lithium supply amid a slowdown in electric vehicle (EV) sales.
The sharp drop in lithium prices has created a challenging environment for producers. Global lithium markets have struggled to balance rapid supply increases, largely in anticipation of continued high demand from the EV sector, with a demand pullback due to a deceleration in EV sales. These market dynamics have prompted companies like Mineral Resources to reassess production levels to mitigate financial losses.
As part of its strategic shift, Mineral Resources will wind down operations at the Bald Hill site, halting production activities for an indefinite period. The final shipment of spodumene concentrate—a key lithium compound used in battery manufacturing—is expected to be completed in December 2024. Initially, the company had forecast annual sales between 120,000 to 145,000 dry metric tonnes (dmt) for fiscal year 2025, but that figure has now been revised down to 60,000 dmt, reflecting the impact of reduced production.
In a statement, Mineral Resources said, “We will continue to monitor lithium prices and site operating costs with a view to recommencing operations once conditions improve.” This statement underscores the company’s cautious approach to future production, emphasizing that the restart of operations will hinge on improved lithium market conditions.
The Bald Hill mine, which has been an important source of spodumene concentrate, had shipped and sold 67,000 dmt SC6 spodumene by the end of fiscal year 2024, generating an underlying EBITDA of approximately A$17 million ($11.1 million), according to Mineral Resources' annual report. The current pause in operations is expected to preserve resources and minimize operating costs as the company waits for a potential rebound in lithium prices.
The decision to place Bald Hill under care and maintenance reflects a broader trend in the lithium sector, where producers are adjusting output in response to volatile pricing. Battery metals have seen prices fluctuate significantly over recent months, with an oversupply exacerbated by shifts in demand patterns across the EV market, one of the primary drivers for lithium demand.
