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Highlights
- Mineral Resources announces the immediate closure of its Bald Hill lithium project due to plummeting lithium prices.
- The shutdown follows an internal investigation revealing misconduct by outgoing Managing Director Chris Ellison.
- Lithium sector in Australia faces multiple project curtailments as global prices fall by over 80% since 2022’s peak.
In a significant move, Australian mining company Mineral Resources Ltd (ASX:MIN) announced it will shut down operations at its Bald Hill lithium project in Western Australia, citing prolonged declines in lithium prices that have severely impacted the battery metals market. The mine, acquired by Mineral Resources just last year and capable of producing 150,000 tonnes of spodumene concentrate annually, will be placed into care and maintenance as the company adjusts to ongoing market volatility.
The announcement marks yet another setback for Mineral Resources, following a scandal involving its founder and Managing Director Chris Ellison. Earlier this month, the company disclosed that Ellison will step down following an internal probe that found he had engaged in undisclosed financial dealings with overseas entities he owned, actions that the board deemed “profoundly disappointing.” The board also classified these financial interactions as related-party transactions, which should have been made known to shareholders. Ellison is expected to remain as managing director until a successor is found within the next 18 months, though investor confidence in leadership has visibly weakened. The Australian Securities and Investments Commission (ASIC) is also investigating the issue, and the board is anticipated to address shareholder concerns at the upcoming annual meeting on November 21.
Market reaction to the Bald Hill closure has been swift, with shares of Mineral Resources declining by as much as 7.8% in Sydney following the announcement. Since its peak in May, the company’s market valuation has more than halved, reflecting both the price downturn in the lithium sector and the recent internal governance controversies.
Lithium prices have experienced a dramatic reversal, plunging over 80% from their late 2022 peak. This decline, driven by a mix of oversupply and slower-than-expected growth in electric vehicle (EV) battery demand, has put substantial pressure on lithium producers worldwide. Bald Hill is now the fifth lithium project in Australia to be curtailed this year due to the price collapse, joining other major projects affected by the challenging market conditions.
Other lithium producers in Australia have likewise been forced to adjust their strategies in response to falling prices. On Monday, Liontown Resources Ltd announced it would reduce production from its Kathleen Valley lithium project, while Pilbara Minerals Ltd suspended operations at a processing plant in October. Earlier in the year, Arcadium Lithium Plc halted output at its Mt Cattlin mine, and Albemarle Corp shut down half of its production capacity. Arcadium is currently being acquired by global mining giant Rio Tinto Group as consolidation pressures build within the sector.
Mineral Resources has sought to diversify its portfolio amidst these challenges. On October 31, the company announced the sale of Australian oil and gas exploration permits to Hancock Prospecting Ltd, owned by mining tycoon Gina Rinehart, in a deal valued at up to A$1.1 billion (US$718 million).
