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Highlights
- The global demand for lithium has soared in robust electric vehicle market conditions.
- Mineral Resources will be increasing output to meet the soaring global demand for lithium products.
- MInRes will increase its production from Wodgina and Mt Marion spodumene mines.
The shares of Mineral Resources Limited (ASX:MIN) closed 5.685% higher at AU$59.67 per share today.
Investors are keeping the stock on their radars as the company announced to increase its output to meet the soaring lithium demand.
As per the release, MIN has agreed to increase production from its Western Australia based Wodgina and Mt Marion spodumene mines with its joint venture partners.
Update on Wodgina Mine
Further updating on the Wodigna Mine, Mineral Resources revealed that, given the strength of the market conditions, MinRes and Albemarle Corporation has agreed to boost the resumption of production from Train 2 at Wodgina.
The company anticipates the first spodumene concentrate from train 2 in July 2022.
Apart from this, MinRes is well-progressed with its preparations to recommence operations at Train 1. It expects the first spodumene concentrate from this train in May 2022.
Related read - Mineral Resources (ASX:MIN) share price gained 34% in past 1 year, here’s why
The company revealed that both the trains have a nameplate capacity of 250,000 dry metric tonnes of 6% product.
MinRes has continued to work with Albemarle to finalise the binding agreements to execute the expansion of the MARBL Lithium Joint Venture. The terms of the agreement will remain consistent with the company’s announcement on 9 February 2022.
Image source: © Willgame | Megapixl.com
Once concluded, MinRes will operate Wodgina and Albemarle mines. Moreover, managing the downstream conversion assets, MinRes will have a 50% ownership stake in Wodgina.
The company further said that all spodumene produced at Wodgina would be processed through conversion facilities. These facilities will be built or acquired by a new 50/50 joint venture between MinRes and Albemarle.
While MIN will contribute its share of capital costs of this conversion capacity, any spodumene produced more than JV conversion capacity will be either toll-converted or sold into the open market.
Both the entities will assess the timing for the start-up of Train 3 and the possible construction of Train 4 after reviewing the global lithium market.
Mt Marion Update
MinRes has further announced that it will upgrade the Mt Marion processing facilities and its 50/50 Joint Venture partner Jiangxi Ganfeng Lithium Co. Ltd.
With this upgradation, MinRes hopes that Mt Marion’s spodumene concentrate production capacity will increase from 450,000 tonnes per annum to 600,000 tonnes per annum of mixed grade product by April 2022.
Management comments
Mineral Resources Managing Director Chris Ellison said that, as the world has seen significant demand for lithium, driven by the strength of the EV market, there has been a substantial rise in lithium prices. This price surge is expected to continue for the rest of this decade.
MIN share price movement
The stock has gained 42% on YTD however, it has dropped 3% over the last three months.
