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MinRes and Ganfeng Lithium are attempting to maintain their lithium joint venture.
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Release time：2025-06-17
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Australia's Mineral Resources (ASX: MIN) is expected to inject A$150 million (US$98 million) into its struggling Mount Marion lithium mine operation to counter the prolonged slump in lithium prices. Its Chinese joint venture partner, Ganfeng Lithium, announced last week in a filing to the Hong Kong Stock Exchange that it would match the cash injection with a A$150 million unsecured loan.
Previously, the Mt Marion lithium mine incurred a loss of A$44.6 million (US$29 million) in 2024, and its operations remained in the red through the first quarter of this year. Ganfeng Lithium stated that the joint decision aims to maintain operations at its Western Australian site due to the lack of signs of lithium price recovery. In a statement to the Australian Financial Review, MinRes said: "Taking decisive action to reduce costs ensures our two largest lithium operations can continue throughout the cycle and benefit when prices recover." This cash injection into Mt Marion comes as MinRes grapples with A$5.8 billion (US$3.8 billion) in debt, and its market capitalization has fallen to A$4.6 billion (US$3 billion).
Lithium has seen the steepest price decline among battery metals. In May, the price of spodumene in China fell 19.1% to US$612.50 per tonne, down 30% since January. The price of lithium carbonate fell 10.3% in May and is down more than 20% year-to-date. S&P Global Platts data shows that the spot price of spodumene has now fallen below US$580 per tonne. Despite strong electric vehicle sales, oversupply is putting significant pressure on the lithium market. William Adams, head of base metals research at Fastmarkets, stated in a recent report: "The weakness in lithium prices is due to oversupply."
Previously, temporary production cuts helped stabilize the market, but persistently low salt prices in China squeezed processors' profits, forcing sellers to offer larger discounts. Analysts warn that further price declines may be needed to trigger another round of production cuts.
Analysts at Citibank and Adamas Intelligence point out that Greenbushes, Australia's largest lithium mine and a joint venture between Albemarle, IGO and Tianqi, is currently the only domestic asset generating positive cash flow at current prices. MinRes also operates the Wodgina mine in partnership with Albemarle and recently closed the Bald Hill mine. The company's setbacks extend beyond commodity prices. The recent discovery of "deeply disappointing" conduct by its founder and former CEO, Chris Ellison, further damaged the company's governance record.
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