Perth-based Mineral Resources
(ASX:MIN) will spend up to $15 million buying Poseidon Nickel's Lake Johnston nickel concentrator plant and mining rights, using it as the basis for a new lithium processing hub.
However, that's as far as MinRes will go up the processing chain for lithium, ruling out a hydroxide refinery like the one Abemarle, IGO, Wesfarmers, and SQM are building in WA. CEO Chris Ellison said the purchase will see MinRes bringing its expertise in spodumene production to Lake Johnston, "which has the potential to service projects throughout the world’s most prospective region for lithium."
MinRes announced on Monday it will convert the existing nickel plant to process the lithium into spodumene concentrate, without disclosing the capital costs of the project. Payment terms include $1 million on execution of the acquisition agreement, $6.5 million on completion of the deal, and a further $7.5 million a year after completion.
The asset at Lake Johnston is a nickel concentrator plant with a flotation circuit boasting a front-end capacity of 1.5 million tonnes per annum, capable of being converted to treat lithium ores, including dense media separation fines. "The asset is licensed to operate until 2041 and has an active groundwater extraction license. On-site infrastructure includes an airstrip, 200-person camp, electrical infrastructure, workshops, and laboratories," MinRes stated.
Internal studies by MinRes indicate that repurposing a brownfields site would reduce the approvals timelines by approximately two years compared to greenfields development, along with significant capital savings.
Located approximately 185 kilometers southwest of Kalgoorlie, MinRes's acquired tenure covers 86 km with one exploration license and 10 mining leases. MinRes will own the tenure outright, including all mineral rights.
Covalent Lithium - Wesfarmers and SQM are building a spodumene mine and processing operation at their Mount Holland prospect, near Lake Johnston, and several other lithium prospects, including the JV between Charger Metals and Rio Tinto.
MinRes holds stakes in developers in the region, including Global Lithium and Delta Lithium. However, it lost out in its bid to buy Azure Minerals, which has a flagship project in the Pilbara region, to fellow billionaire Gina Rinehart and Chile's SQM late last year.
