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Highlights
- Mineral Resources suspends Bald Hill mine, impacting 300 staff.
- Lithium price slump prompts multiple Australian mine closures.
- MinRes anticipates potential restart if market conditions improve.
Mineral Resources (ASX:MIN) has announced the temporary suspension of operations at its Bald Hill lithium mine in response to a sustained downturn in global lithium prices. The decision, described as necessary to preserve cash flow and maintain the value of the spodumene orebody at Bald Hill, will affect approximately 300 employees, who may be reassigned to other facilities or impacted by layoffs.
Bald Hill’s closure follows a string of similar decisions by other Australian lithium producers who are feeling the pressure of plummeting prices. In just two years, lithium-rich spodumene concentrate prices have dropped sharply, from over USD $8,000 per tonne to below USD $800, as reported by S&P Global. Analysts, including those from Citi, suggest that few Australian mines remain viable at spodumene prices under USD $1,000 per tonne.
This rapid decline in lithium prices is largely attributed to an oversupply from hard rock lithium mines in Africa and lepidolite sources in China. The market has further weakened due to slowing electric vehicle demand, creating an unfavorable environment for lithium producers worldwide.
Several Australian companies have recently scaled back operations. Core Lithium (ASX:CXO) halted its Finniss mine in the Northern Territory, while Liontown Resources (ASX:LTR) reduced production at its Kathleen Valley project. Additionally, Pilbara Minerals (ASX:PLS) has adjusted output from its Pilgangoora facility and paused activities at its Ngungaju processing plant.
Other global players have also felt the impact. Albemarle (NYSE:ALB), one of the largest lithium companies, has ceased operations on a processing train at its Kemerton facility and has pressured Mineral Resources to downscale production at the jointly operated Wodgina lithium mine. Arcadium, another major lithium producer, has suspended activities at its Mt Cattlin project in Western Australia.
According to Mineral Resources' Managing Director Chris Ellison, the move to place Bald Hill under care and maintenance aligns with the company's broader strategy to manage operational costs. He emphasized that Bald Hill remains a high-quality, long-term asset with potential for future profitability.
The company confirmed that, if market conditions improve, operations at Bald Hill could resume within four to six weeks. Located in Western Australia's lithium-rich Goldfields region near Kalgoorlie and Norseman, Bald Hill has an annual production capacity of up to 150,000 tonnes of spodumene concentrate.
Mineral Resources acquired Bald Hill in 2023 for AUD $260 million, following the collapse of its previous owner, Alita Resources.
