Mineral Resources shares lithium load with South Korea’s POSCO in $1.2 billion sale
Mineral Resources will sell a 30 per cent stake in its two active WA lithium mines to South Korea’s POSCO for an upfront cash payment of $1.2 billion to buttress a debt-laden balance sheet.
The “first-of-its-kind” transaction sees POSCO have a 15 per cent holding in each of MinRes’ Wodgina and Mt Marion lithium mines, and comes after the Chris Ellison-led miner kicked off a sale process in a bid to realise some value out of the assets.
Prior to the POSCO deal, Wodgina’s ownership was split 50-50 between MinRes the US-based Albemarle. MinRes had a 51 per cent stake in Mt Marion with China’s Ganfeng holding the remainder.
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By continuing you agree to our Terms and Privacy Policy.The mothballed Bald Hill remains fully under MinRes ownership.
Mr Ellison said the cash injection from POSCO would “materially strengthen” the company’s balance sheet and was a testament to the potential of the two hard rock mines.
“This transaction will materially strengthen MinRes’ balance sheet, giving us the financial flexibility to pursue strategic growth opportunities across our portfolio that leverage our unique development and operational capability, and further enhance shareholder value,” Mr Ellison said.
MinRes needs the extra cash to pay down net debt of around $5 billion.
POSCO, a steel producer and manufacturer of lithium-ion battery materials, will receive spodumene concentrate from the mines “in proportion to its 30 per cent interest” as part of the duo’s new joint venture.
The move could also open the door to new downstream processing.
MinRes told investors on Wednesday it would continue as operator of the two mines under its existing agreements with US chemicals player Albemarle and China’s Jiangxi Ganfeng, with its operating entities to remain outside of the new joint venture with POSCO.
POSCO and MinRes are also partners on the WA company’s latest iron ore mine, Onslow.
The lithium deal is set to be completed in the first half of 2026.
Prices for the oversupplied metal have staged a minor comeback in the past month, with spodumene concentrate — a key source of lithium — surpassing $US1000 a tonne this week, according to Shanghai Metals Market.
Malcolm Bundey, who was brought in as part of MinRes’ reputational rehabilitation, said the investment signalled “growing global demand for tier 1 hard rock lithium.”
“This continues our stated commitment to strengthening our financial position and leveraging our core competencies of building world-class assets and recycling capital to position us for the future,” he said.
“By supporting the development of new global conversion capacity, this partnership will play an important role in diversifying the global lithium supply chain and strengthen bilateral ties between Australia and Korea in critical minerals.”
Most of MinRes’ spodumene concentrate is currently exported to China.
Last month, The West Australian reported that it would be unlikely Federal Treasurer Jim Chalmers gave his blessing to Chinese interests boosting their exposure to MinRes’ lithium business.
More to come . . .
