Mineral Resources to Shut Bald Hill Lithium Mine Amid Price Decline
Mineral Resources has announced the immediate closure of its Bald Hill lithium mine in Western Australia due to a prolonged and significant decline in lithium prices. The decision comes as the latest in a series of production cutbacks among global lithium producers, driven by an oversupply and reduced demand for the critical battery material.
The closure of Bald Hill will result in the loss of 300 jobs, leaving only a small team of approximately 10 staff to manage the site's transition to care and maintenance. The company expects its final shipment of spodumene concentrate—an essential ingredient for lithium-ion batteries—to be completed in December. Forecasted shipments for fiscal 2025 have been cut to 60,000 dry metric tonnes (dmt), down from an earlier estimate of 120,000 to 145,000 dmt.
"Following a strategic review and in light of a prolonged period of low spodumene concentrate prices, Bald Hill will be safely transitioned into care and maintenance from this week," Mineral Resources said in a statement. The announcement triggered a sharp market reaction, with MinRes shares dropping 7.8% at one point before closing down 7.2% on Wednesday at A$34.95 on the Australian Securities Exchange.
Lithium prices have plummeted more than 80% since their peak in late 2022, largely due to weaker-than-expected demand from electric vehicle (EV) battery manufacturers, which has exacerbated a global supply glut. Mineral Resources indicated that it would continue to monitor market conditions and consider resuming operations at Bald Hill if prices recover.
Bald Hill, which has an annual production capacity of 150,000 tonnes of spodumene concentrate, is the fifth Australian lithium mine to cut or suspend operations in 2023 due to market conditions. Other miners, including Australia's Liontown Resources (ASX: LTR) and U.S.-based Piedmont Lithium (NASDAQ, ASX: PLL), have also scaled back production or reduced costs in response to the price challenges. Liontown has reduced its output targets for the Kathleen Valley project and extended its project timeline, while Piedmont Lithium announced further workforce reductions, resulting in a 48% staff cut between February and October.
The Bald Hill mine closure follows recent internal governance challenges at Mineral Resources. Earlier this month, the company's founder and former chief executive, Chris Ellison, announced plans to step down as managing director after an internal investigation found he failed to disclose payments between Mineral Resources and overseas entities he owned. The company has since reclassified these transactions as related-party dealings to address shareholder concerns.
Despite current challenges, analysts warn of continued disruptions in the lithium sector, with companies under pressure to adapt through operational cutbacks and cost efficiency measures. However, long-term demand for lithium remains tied to the global energy transition and the growth of electric vehicle markets.
