MinRes’ September quarter production beats expectations
MinRes shares rallied 4.6 per cent as September quarter production beat expectations despite tumbling lithium prices.
The price of lithium concentrate produced at Mineral Resources’ Mt Marion mine has halved in the last year as markets continue to tighten, according to the company’s latest quarterly production report.
MinRes said it received an average $US1870 a tonne for lithium concentrate produced at the mine, just outside Kalgoorlie in WA, down from $US3772 a tonne in the September quarter in 2022.
And the price is off almost 20 per cent from the June quarter, as prices for Australian lithium concentrate tumble.
MinRes said on Wednesday it shipped 64,000 tonnes of concentrate from the mine, at an average grade of 3.7 per cent lithium – or the equivalent of 39,000 tonnes at 6 per cent lithium.
Prices for lithium battery chemicals produced from concentrate shipped from the company’s Wodgina lithium mine in the Pilbara fell 16 per cent to $US34,036 a tonne, with the company selling 4273 tonnes of battery chemicals in the period, up 22 per cent to 4273 tonnes.
MinRes operates both Mt Marion and Wodgina and owns half of Mt Marion’s production and a 40 per cent share of Wodgina - a figure that will rise to 50 per cent this quarter after the close of its latest change to its joint venture deal with lithium major Albemarle.
MinRes head of investor relations James Bruce told analysts on Wednesday the company did not see anything fundamentally wrong with market demand, saying tumbling pricing was partly the result of “paper trading”.
China’s Guangzhou Futures Exchange opened trading in lithium carbonate futures in July, which - like Dalian iron ore futures - have become the focus of concerns around speculative trading.
MinRes said it is on track to close the acquisition of the Bald Hill lithium mine in WA from the liquidators of Alita Resources in November.
Shipments of iron ore from MinRes Pilbara and Yilgarn operations slipped in the quarter, however, with MinRes saying “temporary port constraints” in the Pilbara and a shortage of haulage options in the Yilgarn had hurt its ability to move product.
Quarterly iron ore production rose 8 per cent in the period to 4.8 million wet metric tonnes, but only 3.9 million tonnes were exported in the period.
MinRes received an average $US99 a tonne for its iron ore in the September quarter.
MinRes said the same constraints at Pilbara ports also affected its ability to ship lithium concentrate from its Wodgina mine to the company’s contract refiners in China, with shipments of 25,000 tonnes sent, against mine production of 45,000 tonnes of concentrate.
And the company said its new Onslow iron ore hub is still on track to make its first shipments by the middle of 2024, with the company now having received all of the major regulatory approvals for construction of the mine and port facilities.
MinRes said it had begun clearing the 150km haul road route from the mining areas to its new port facilities at Onslow in WA’s Pilbara region, with the first blasts at the Ken’s Bore mine site already done.
RBC analysts said MinRes’ production through the quarter had beaten expectations, setting a positive tone for the new financial year.
MinRes shares rallied 4.6 per cent, or $2.66, to $60.09 on Wednesday. The stock was trading as high as $96.97 in January this year.