Australia's MinRes Scales Back Lithium Production Amid Market Downturn

Company Adjusts Output Forecasts for Mount Marion and Wodgina Sites

Australian lithium and iron ore producer Mineral Resources (MinRes) has announced a reduction in lithium production at its Mount Marion and Wodgina sites due to the current downturn in the market.

On August 29, MinRes managing director Chris Ellison stated, "I'm starving the product going into the market. I don't want to oversupply the market. I don't want to waste my ore." This decision reflects a strategic move to prevent market oversaturation and manage inventory effectively.

For the fiscal year July 2024-June 2025, MinRes has revised its lithium shipment guidance. Mount Marion’s forecast is set at 150,000-170,000 dry metric tonnes (dmt), a decrease from the previous year's 190,000-220,000 dmt. Wodgina’s guidance is now 210,000-230,000 dmt, reduced from 210,000-240,000 dmt. The newer Bald Hill site aims to ship 120,000-145,000 dmt but has not yet issued formal guidance.

Ellison noted that while MinRes has adjusted its operational strategy to adapt to lower prices, it is not planning to shut down the mines. Instead, the company will minimize spending while conserving cash. MinRes' revenues for 2023-24 increased by 10% to approximately A$5.3 billion ($3.6 billion), partly due to higher iron ore revenues but offset by lower lithium prices.

Ellison expects lithium prices to remain depressed for about six months before rebounding early next year. He cautioned that if prices do not improve, many lithium operations might be forced to cease operations. MinRes will also avoid downstream processing of lithium, contrasting with competitors like Pilbara Minerals, due to perceived marginal returns. In June, MinRes ended a third-party processing agreement with US-based Albemarle for converting Wodgina spodumene into lithium hydroxide.