Joint venture partners Albemarle and Mineral Resources (MinRes) will keep the Wodgina lithium project in Western Australia on care and maintenance despite improving market conditions for the commodity.
The joint venture (JV) project with Albemarle had ceased production since late last year due to unfavourable lithium prices.
MinRes noted a 50 per cent reduction in its average realised lithium spodumene concentrate price on prior corresponding period at $459 per tonne.
The JV will consider resuming its spodumene concentrate production according to market demand.
The company also reported zero earnings from the Mt Marion lithium project in Western Australia during the half year to December, compared with the $16 million earned in the same period in 2019.
MinRes stated that this reflected a reduction in sale prices due to market conditions, after delivering a record 262,264 dry metric tonnes, or a 36 per cent increase on the prior corresponding period.
MinRes managing director Chris Ellison recognised the positive signs in the lithium market.
“(MinRes) is well positioned to benefit from this commodity’s upturn as the world renews its focus on green energy and demands greater volumes of high-quality spodumene concentrate.”
Analysts have pointed to signs of a recovery in lithium prices this year, with prices for lithium carbonate and hydroxide rising for the first time this year.
Despite the underperformance of MinRes’ lithium assets, the company declared a fourfold increase to its interim dividend to $1 per share after recording a 130 per cent increase in its underlying earnings during the period to $763 million.
This is attributed to MinRes’ mining services business growth, increased iron ore exports and strong iron ore prices.
MinRes exported a record 7.9 million tonnes of iron ore during the period, a 17 per cent increase on the previous corresponding period.
Ellison said the six months to December had been a very strong and successful period for the company.
“Despite the backdrop of COVID-19, (MinRes) has delivered outstanding operational and financial performance in the December half, demonstrating the strength of our business and the ability to maximise returns when commodities like iron ore are doing well,” he said.
“It also vindicates our decision to invest heavily across our iron ore business during the past few years.”