Mineral Resources has agreed to sell a 30 per cent stake in its operational lithium business to POSCO for US$765 million (AU$1.2 billion). According to Morgans analyst Annabelle Sleeman, the deal provides a clear pathway to de-leveraging. Mineral Resources is an Australian diversified resources company, with extensive operations in mining services, iron ore, lithium, and energy. POSCO is a South Korean steel-making company.
The transaction establishes a new incorporated joint venture, with Mineral Resources holding 70 per cent and POSCO owning 30 per cent. This joint venture encompasses Mineral Resources’ 50 per cent interest in both the Wodgina and Mt Marion projects. POSCO will be entitled to its share of spodumene volumes produced by these projects. The deal implies a combined valuation of approximately AU$3.9 billion, exceeding Morgans’ previous estimate of AU$2.3 billion and the consensus estimate of AU$2.6 billion.
Annabelle Sleeman from Morgans notes that the proceeds from the sale will be used to reduce debt. This could potentially bring the company’s net debt to EBITDA ratio below two by the financial year 2028. At the same time, Mineral Resources will retain exposure to potential upside in the lithium market.
The move is expected to shield Mineral Resources from near-term lithium price volatility and improve funding flexibility for future growth projects. This strategic decision allows the company to strengthen its financial position while maintaining a significant stake in its lithium assets.
