Beleaguered Ellison faces MinRes shareholders
The board of under-siege Mineral Resources faced grilling in Perth over a governance scandal, amid unexpected expressions of support.
Australia’s Mineral Resources Ltd said on Friday its newly formed joint venture with Albemarle Corp had decided to pause operations at the Wodgina Project due to “challenging” lithium market conditions.
Australian lithium producers had earlier this year flagged weak market conditions for the rest of 2019 amid reduced demand from Chinese customers after a change in the country’s electric vehicle subsidies, and global trade tensions.
Mineral Resources, which today concluded the sale of a 60% interest in Wodgina to Albemarle, said the transition to care and maintenance at the project would take about four weeks.
“Given the current challenging market conditions for lithium, the MARBL Lithium Joint Venture believes there is more value to be delivered in the long term by placing Wodgina on care and maintenance now,” Mineral Resources Managing Director Chris Ellison said.
Mineral Resources said the decision would not affect its fiscal 2020 mining services core earnings guidance of A$280 million to A$300 million. ($192.9-$206.7 million).
Western Australia-based Wodgina is touted by Mineral Resources as one of the “largest known hard rock lithium deposits in the world.”
The company’s shares rose about 0.5% after the announcement, while the broader market fell 0.3%.
($1 = 1.4514 Australian dollars)
(By Ambar Warrick; Editing by Shailesh Kuber)
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