Mineral Resources to Sell Stake in Wodgina Lithium Project

Diversified miner Mineral Resources (ASX:MIN) is looking to sell its minority stake in the Wodgina lithium project in the Pilbara region in Australia, the company said on Tuesday (May 1).

The move comes at a time when carmakers and technology companies are seeking to reach long-term supply deals for lithium, a key element in electric car batteries.

In fact, the miner said it is looking for partners to take up to a 49-percent interest in the project after receiving a number of unsolicited proposals from parties interested in the asset.

“This minority sales process is in line with [our] strategy of investing in early-stage projects, adding significant value and then seeking equity partners to share in the value,” Managing Director Chris Ellison said in a statement.

Mineral Resources expects the sale to be completed by the second half of the year, and has already appointed Macquarie Capital and law firm Gilbert and Tobin to assist with the transaction.

“The company will only introduce project partners if acceptable terms can be secured. Mineral Resources has the capability to finance and implement its downstream processing strategy at Wodgina on its own,” Ellison added.

Wodgina, one of the world’s biggest hard-rock deposits, produced about 1.16 million wet tonnes of lithium direct-shipping ore in the quarter ended in March.

Mineral Resources is also working on progressing its open-pit pre-strip and on constructing a spodumene concentrate plant designed to produce 750,000 dry tonnes per year of 6-percent spodumene concentrate.

Looking ahead, the company is aiming to complete a feasibility study on the project for the potential construction of a 50,000- to 100,000-tonne-per-year lithium carbonate or hydroxide plant to capture additional value from the lithium supply chain.

Aside from Wodgina, Mineral Resources has a stake in the Mount Marion lithium project, and has joined forces with top lithium producer Jiangxi Ganfeng to develop the asset.

On Tuesday, shares of Mineral Resources closed up 2.44 percent in Sydney at AU$18.44.

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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.