Mineral Resources and Pilbara Minerals among lithium stocks skyrocketing as China closes down huge mine
Shareholders in listed lithium mining companies collectively gained billions of dollars on Wednesday after months of doom and gloom.
In morning trade WA’s spodumene concentrate producers surged — Mineral Resources by 17.2 per cent, Pilbara Minerals by 12.7 per cent, IGO by 12.3 per cent and Liontown Resources by 11.5 per cent — following prolonged heavy share price falls this year.
Local explorers also rose sharply, led by Wildcat Resources leaping 22 per cent.
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By continuing you agree to our Terms and Privacy Policy.The gains are linked to reports overnight that Chinese mining and battery manufacturing titan, CATL, closed its massive Jianxiawo mine amid the ongoing lithium price downturn.
Jianxiawo produces lepidolite, a spodumene substitute, and is responsible for a material chunk of the world’s upstream lithium supply.
The prevailing spodumene concentrate benchmark price has tumbled from above $US3200 a tonne a year ago to sit at $US730/t currently.
US giant Albemarle, however, recently sold a parcel of the battery ingredient in China for $US870/t.
“The spot price has been below CATL’s cash cost level since mid July 2024,” UBS told select clients on Wednesday.
“After making a loss for two months in the lithium business and continuous downside risk on the lithium price, we finally see normal supply response from (the) marginal-cost producer.”
UBS says it expects the mine suspension to lift lithium prices upwards between 11 per cent and 23 per cent for the rest of 2024.
The recent price pinch claimed its first WA scalp earlier this month when Allkem announced its Mt Cattlin mine near Ravensthorpe will go into care and maintenance by mid-2025.
MinRes boss Chris Ellison claimed last month that every lithium mine was unprofitable at current prices.
“I mean, just for the record, no one is making money in this market . . . let’s be really, really clear on that, there’s no lithium companies making money,” he said.
MinRes’ extra share price gain on Wednesday, relative to its lithium peers, was fuelled by an announcement after market close on Tuesday that it had identified $300 million of cost savings and would receive $1.1 billion of cash to ease its balance sheet pressures.
The imminent cash injection came after the Foreign Investment Review Board rubber-stamped MinRes’ sale of a 49 per cent stake in the Onslow haul road to Morgan Stanley Infrastructure Partners.
