Mineral Resources (ASX: MIN), which is rallying from a polemic probe involving its founder and former chief executive Chris Ellison, will shut its Bald Hill lithium mine in Western Australia immediately due to an ongoing and steep decline in lithium prices.
The decision marks the latest in a series of production cutbacks among global lithium producers, as the market for the crucial battery material faces oversupply and reduced demand.
Bald Hill mine closure will result in the loss of 300 jobs, with a small team of about 10 staff remaining to manage the site’s transition to care and maintenance. The company expects its final shipment of spodumene concentrate — an essential ingredient for lithium-ion batteries — to be completed in December.
Shipments for fiscal 2025 are projected to fall drastically as a result, with MinRes now forecasting 60,000 dry metric tonnes (dmt), down from an initial estimate of 120,000-145,000 dmt.
“Following a strategic review and in light of a prolonged period of low spodumene concentrate prices, Bald Hill will be safely transitioned into care and maintenance from this week,” MinRes said in a statement.
The announcement triggered a sharp market reaction, with MinRes shares dropping 7.8% at one point before closing down 7.2% on Wednesday at A$34.95 on the Australian Securities Exchange.
Lithium prices have plummeted more than 80% since their late 2022 peak. Demand from electric vehicle (EV) battery manufacturers has been weaker than anticipated, exacerbating a global supply glut. MinRes indicated it would monitor market conditions and consider resuming operations if prices recover.
Bald Hill, capable of producing 150,000 tonnes of spodumene concentrate annually, is the fifth Australian lithium mine to cut or suspend operations in 2023 due to market conditions. Other miners, including Australia’s Liontown Resources (ASX: LTR)and US-based Piedmont Lithium (NASDAQ, ASX: PLL), have also taken steps this week to scale back production or reduce costs.
Liontown reduced its output target for its Kathleen Valley project and extended its timeline, citing the same price challenges. Piedmont on Tuesday slashed its workforce again, which translated into a 48% staff reduction between February and October.
Bald Hill mine closure also follows recent turbulence at MinRes over governance issues. Billionaire Chris Ellison, who announced plans to step down as managing director earlier this month, was found to have engaged in “profoundly disappointing” conduct.
An internal investigation revealed that Ellison failed to disclose payments between MinRes and overseas entities he owned. The company has since reclassified these transactions as related-party dealings, addressing shareholder concerns in a separate statement.
With the lithium price rout showing little sign of abating, analysts warn of further disruptions in the sector. Companies are under mounting pressure to adapt, with some scaling back operations while others seek cost efficiencies to weather the downturn.
Despite current challenges, long-term demand for lithium remains tied to the global energy transition and the growth of EV markets.
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