Australia’s MinRes Sells 30% Lithium business to POSCO for $765 Million

The agreement will create a joint venture company that holds MinRes’s existing 50% stake in the Wodgina and Mt Marion lithium mines, giving POSCO a 15% interest in each project.

Australia’s Mineral Resources has announced that it will sell a 30% stake of its lithium business to South Korea’s POSCO for $765 million. They aim that this move will reduce debt and strengthen its financial position.

After the announcement, MinRes shares increased to their highest level in over a year. Its stocks have increased as much as 10.8% before settling at 9.2%. This performance made MinRes the day’s top gainer on the S&P/ASX 200, which itself finished the session slightly lower.

They have announced this move after MinRes wants to recover its balance sheet, especially after making heavy investments in the Onslow Iron haul road project, and seeing a sharp decline in lithium prices. These projects have affected the company’s earnings. The diversified miner has also faced continuous scrutiny over corporate governance issues related to founder and CEO Chris Ellison.

In a simultaneous leadership change, MinRes appointed Malcolm Bundey as non-executive chair, replacing James McClements after a decade in the role.

Bundey has served as deputy chair at Brickworks and has previously worked as a managing director and executive chief at packaging solutions provider Pact Group.

He now takes up the new role in the company to help them navigate a broader governance overhaul. After the announcement of the leadership change, the company’s shares dropped 8.8% to A$24.08. It was making the benchmark for the weakest trading session in nearly five weeks.

Market observers suggested that Bundey’s lack of direct mining experience contributed to the sell-off, though he will be supported by an experienced board and executive team.

For POSCO, which already operates a joint venture lithium hydroxide plant in South Korea with Pilbara Minerals, the deal represents its first direct investment in Australian lithium mines. This move comes at a time when lithium prices remain calm.

The agreement will create a joint venture company that holds MinRes’s existing 50% stake in the Wodgina and Mt Marion lithium mines, giving POSCO a 15% interest in each project. MinRes will continue to operate both mines under the current agreements with existing partners.

Analysts highlighted that the transaction stresses the value of MinRes’s lithium assets, secures a premium valuation, and strengthens the company’s financial position, while also establishing an important link to the Korean market and preserving high-margin services revenue.

POSCO, a company known for manufacturing steel, has now identified growth opportunities in energy materials alongside its steel business. The company wants to emphasise the need for a stable and cost-effective supply of raw materials. POSCO shares went up as much as 6.6%, which was their strongest single-day performance since July.

The prices of lithium, a key material used in batteries, dropped to their lowest level in four years this June, reaching nearly $610 per metric ton. However, since then, the price has rebounded to around $880, but is still far below its 2022 highs of $6,000. The decrease in prices has led Australian miners to pause operations or consider selling some of their assets to repair their finances.

Earlier efforts by MinRes to sell stakes in Wodgina and Mt Marion were met with resistance from potential Indian and Japanese buyers, who initially started at a valuation of over $2 billion. Proceeds from the POSCO transaction will be used to repay external debt, strengthen the balance sheet, and support future growth projects.

Under the terms of the new partnership, POSCO will receive a share of spodumene concentrate proportionate to its 30% joint venture interest. The Wodgina mine, one of the world’s largest hard-rock lithium deposits, is operated in collaboration with Albemarle, while Mt Marion is partnered with China’s Ganfeng Lithium.