Mineral Resources explores sale of Bald Hill lithium mine

The Bald Hill lithium mine was placed into care and maintenance late last year following a strategic review on the back of a prolonged period of low lithium prices. Picture: Bloomberg

Further speculation has surfaced in the market about asset sales being explored by Mineral Resources, with the latest being its $1bn Bald Hill lithium mine in Western Australia’s Goldfields region.

DataRoom understands that Mineral Resources adviser JPMorgan may have been quietly courting suitors that could be keen to buy the asset that Chris Ellison’s Mineral Resources has outlaid about $1bn on in terms of investment.

However, the mine was placed into care and maintenance late last year following a strategic review on the back of a prolonged period of low lithium prices.

For the six months to December, Mineral Resources reported a $352m impairment on Bald Hill following transition to care and maintenance in November.

This was on the back of the prevailing market conditions and being the highest cash cost operation for Mineral Resources. It mined 554,000 dry metric tonnes in the first half of FY2025 and shipped 60,000 dry metric tonnes versus previous volume guidance of 120,000 to 145,000 dry metric tonnes of spodumene concentrate 6 equivalent.

The mine also generated $72m in revenue while losing $4m on an earnings before interest, tax, depreciation and amortisation basis.

DataRoom reported this month that Mineral Resources quietly launched a sale process for its Wodgina lithium operation late last year and has tested the market for an equity raising. This was as bonds for MinRes had started trading at a discount of 10c-15c in the dollar amid volatile market conditions that had weakened bond prices generally as investors search for liquidity.

As of December, Mineral Resources had $5bn of net debt, but concerning to analysts has been the prospect of a liquidity squeeze, with $2.5bn of current assets versus $2.1bn of current liabilities, prompting market experts to suggest the group is trying to get cash through the door.

One theory is that MinRes, which also has Rothschild advising its board, is entertaining offers for a variety of assets and would sell whatever made the most financial sense.

MinRes now says it has no plans to sell Wodgina, suggesting that interest from the groups it approached, such as South Korea’s LG Chemical and other Japanese trading houses and car manufactures like Mitsubishi, did not offer an adequate price.

Broker consensus estimates for the 50 per cent interest in Wodgina are around $2.2bn and offers were understood to have come in lower than that.