Mount Marion Lithium Project, Australia

Key Data

Mount Marion lithium project is located about 40km southwest of Kalgoorlie, in the Goldfields region of the Western Australian state. It is the second largest high-grade lithium concentrate (spodumene) in the world, currently under development.

The Mt Marion project was approved for development in October 2010 and was expected to start production in March 2011. Its commissioning, however, has been postponed until the first half of 2012.

"In February 2011 the joint venture companies formed an entity called Reed Industrial Minerals (RIM) to develop the lithium project."

The spodumene mineral from the mine will be processed to produce lithium carbonate. It will mainly be used in the production of batteries for hybrid cars.

A pre-feasibility study conducted by Hatch and Reed Resources estimated the demand for lithium carbonate in Asian markets to be 17,000t a year produced by processing 120,000t of chemical-grade spodumene concentrate. Mt Marion is being developed to tap this demand.

Lithium carbonate is also used in several other industries such as lubricants, glass, pharmaceuticals, air-conditioning and ceramics. By-products recovered from the mining operations will include potassium feldspars, tantalum and mica.

Ownership of the Western Australian mine

The lithium mine is being developed by a joint venture between Reed Resources and Mineral Resources (MRL). In October 2009, both the companies signed a farm-in agreement, according to which MRL was to fund the development, construction and operations of the processing plant, while Reed Resources would have 100% ownership. MRL would have had shared 40% of the net profits.

In February 2011, however, the joint venture companies formed an entity called Reed Industrial Minerals (RIM) to develop the lithium project.

The agreement was amended to include MRL owning a 30% stake in RIM and continue funding and operating the mine. Reed Resources, holding a 70% interest, aims to become one of the leading producers of lithium spodumene.

Geology and reserves of the Mount Marion area

Western Mining Corporation (WMC) had conducted an exploration study at the Mount Marion tenements between 1960 and 1980. The study estimated a possible production of 5,000t of lithium carbonate a year.

The mine was expected to have a mine life of ten years. A pre-feasibility study was completed by Associated Minerals in 1996. The mine produced spodumene concentrates, ranging from 6.5 to 7% Li2O in the pilot tests.

The recoveries were to range from 75% to 83%. The exploration activities were, however, put on hold thereafter.

In August 2010, the resources estimated at the mine were defined as being 10.5mt of mineralised spodumene pegamites at 1.4% Li2O (lithium oxide) with a contained Li2O reserve base of 146,500t. In July 2011, the total reserves at Mt Marion were estimated to be 1.49mt at 1.3% Li2O for 201,000t of contained lithium oxide (Li2O) and 1.2% of Fe2O3.

It was 38% more than the previous estimates. Hellman and Schofield was contracted for providing a geological model for the mineral resource estimates.

Mining and drilling phases at Mt Marion

The joint venture companies have two mining lease permits to extract pegmatites within the M15/999 and M15/1000, including outcropping.

"Lithium carbonate is also used in several other industries such as lubricants, glass, pharmaceuticals, air-conditioning and ceramics."

The resources were estimated by geological mapping, drilling and sampling. The resources were estimated through 114 drillholes for a total of 138 holes drilled in 2011.

The resource definition drilling is progressing in phases. It has identified the pegmatites at the No.1 Deposit, No. 1W Deposit, No.2 Deposit, No. 2W Deposit on M15/1000 and No.4 Deposit on M15/999. The resources occur along downdips and strikes in the region. The interpretation of deposits was provided by Bryan Smith Geosciences.

Reed is planning to increase the life of the open pit mine through strike and depth extensions at the M15/1000 deposits by drilling 49 additional holes.

A new location, area 6, an extension of the deposit four drilling programme in the southern part of M15/1000, has also been identified to contain pegmatite.

Ore processing and production of lithium

Lithium is produced by mining and crushing hard, granite-like rocks hosting the spodumene mineral. Spodumene will be processed to produce lithium carbonate.

Mineral Resources is building a modular processing plant and installing other ancillary equipment, with a capacity to produce 17,000t of +6.5% Li2O concentrate a month.

The mine is expected to initially produce 200,000t/y of Li2O at 6% chemical grade spodumene concentrate, 60,000t/y of mica and 30t/y of tantalite concentrate. The processing plant will include a modular beneficiation circuit to increase the production in future based on customer requirements.

Rendering of the Mt Marion processing plant in Western Australia.

Primary crusher at the workshop of the Mount Marion lithium project.

A secondary crusher in the workshop of Mt Marion.

Administration area at the lithium mining work site in Western Australia.

Map showing the location of the Mount Marion lithium project in Australia.

Mining samples taken from Mt Marion for metallurgical testing in September 2009.