Mineral Resources (MRL) has started the process of divesting up to 49% stake in its Wodgina lithium project in the Pilbara region of Western Australia with the aim of securing a new partner for the project.
The proposed initiative is expected to allow the company to focus on its core business of providing mining services.
MRL recently upgraded the mineral resource at Wodgina to 233 million tonnes (Mt) with a probable hard rock ore reserve of 142.4Mt in the casserite pit.
The mine is located 100km south of Port Hedland and is expected to produce 5.65 million tonnes per annum (Mtpa) over a mine-life of around 30 years.
Mineral Resources managing director Chris Ellison said: “This minority sales process is in line with MRL’s strategy of investing in early-stage projects, adding significant value and then seeking equity partners to share in the value from a full development plan.
“The decision to embark on a process to sell a minority interest in Wodgina will allow MRL to focus on its core strategy of being a world-leading mining services provider at the same time as having like-minded strategic partners invest with us to fully unlock Wodgina’s lithium potential.”
However, Ellison noted that project partners would only be introduced if acceptable terms can be secured as MRL has the capacity to finance and implement its downstream processing strategy at Wodgina without additional support.
The company has received interest from lithium processors, battery manufacturers, international trading companies and automakers.
The parties have shown interest in securing a direct investment in the project and / or offtake rights.
MRL has selected Macquarie Capital (Australia) Limited and Gilbert + Tobin to assist with the sale process.
MRL intends to provide complete pit-to-port mining services to the new partner under a life-of-mine services agreement as part of the arrangement.
An announcement regarding any possible transaction for the sale of minority stake in Wodgina is expected to be made in the second half of this year.
In addition, the construction of the company’s 750,000tpa spodumene plant at Wodgina is now underway, with three-staged production currently slated to commence in October and December this year and March 2019 respectively.