Mineral Resources suspends Bald Hill operations, impacting 300 employees as lithium prices lag

Mineral Resources (ASX: MIN) has elected to place its Bald Hill lithium project in Western Australia into care and maintenance starting this week.

The company, which also recently decided to cut back spending on its WA gas operations, stated that approximately 300 employees will be impacted by this latest move.

MinRes is investigating redeployment opportunities for the Bald Hill workers, but a redundancy process will be followed if no suitable positions are available.

A team of approximately ten employees will remain on-site to coordinate the production ramp-down and care and maintenance activities including the optimisation of mine plans, scale and operating structure in preparation for any potential restart.

Strategic review

The decision to suspend activities at Bald Hill follows a strategic review conducted after a prolonged period of low spodumene concentrate prices.

Managing director Chris Ellison said the transition to care and maintenance will preserve cash and the value of Bald Hill’s spodumene orebody while the company waits for conditions in the global lithium market to improve.

He noted that if a decision is made to restart Bald Hill, ramping back up to full operation is anticipated to take approximately four to six weeks.

Immediate shutdown

As part of the transition plan, mining and mobile maintenance operations will cease today, with the spodumene concentrate plant and accommodation village scheduled to temporarily cease operations by early December 2024.

The final shipment of Bald Hill spodumene concentrate is expected to be sold in December, with FY25 shipped volumes now expected to be approximately 60,000 dry metric tonnes (dmt), compared to prior volume guidance of 120,000 to 145,000dmt.

“Placing Bald Hill on care and maintenance is a prudent decision but one not made lightly [and] the decision aligns with the work we have done across the company in recent months to reduce costs,” Mr Ellison said.

Major increase in reserves

Mineral Resources took this opportunity to report a significant increase in Bald Hill reserves, with the project’s new mineral resource sitting at 58.1 million tonnes at 0.94% lithium, a 168% increase from the prior June 2018 estimate of 21.7Mt.

The increase included a large drilling dataset completed since the June 2018 estimate.

“The significant upgrade to the mineral resources statement is evidence that Bald Hill is a high-quality asset with a long-term future,” Mr Ellison said.

“We will continue to monitor lithium prices and site operating costs with a view to recommencing operations once conditions improve.”