This was in the Australian start of Feb. Interesting timeline for the company they were targeting. Not sure 12-15 months would be possible for completion but things may happen quicker than announced today if CE was referring to HXG.
MinRes lithium plans OK after AWE bid failure: Ellison
Mineral Resources chief executive Chris Ellison says planned lithium plants are still viable.
Mineral Resources chief executive Chris Ellison says the company’s ambitious $400 million lithium processing plans still stack up, even in the wake of its failed offer for oil and gas play AWE.
An agreed deal between MinRes and AWE was formally terminated on Monday after AWE threw its support behind a higher-priced all-cash $602m takeover from Japanese trading house Mitsui.
MinRes had planned to use the gas from AWE’s 50 per cent owned Waitsia gasfield in Western Australia’s Perth Basin to feed the power-hungry lithium processing plants it plans to build elsewhere in the state.
Speaking after unveiling a 16 per cent increase in first-half net profit to $163m and a $46.7m, 25c-per-share interim dividend yesterday, Mr Ellison refused to rule out coming back with an alternative proposal for AWE.
“What I’ve found in the past is if I don’t speak about those sorts of things, I have all the options open to me moving forward,” he said.
“It’s a moving target, but what I can say about the Waitsia field, I couldn’t find a gas asset like that for sale at market value anywhere in the world. It’s a high-quality tier-one asset, it’s right on our doorstep, and we’re going to use a huge amount of gas going forward, as are some of our key clients.”
But he also stressed that MinRes had “never overpaid for an asset in our history”.
MinRes, which owns interests in the Wodgina and Mt Marion lithium mines, wants to move into the production of higher-margin lithium-based products for use in the rapidly growing batteries industry.
The company is close to committing to the development of side-by-side lithium carbonate plants capable of producing 50 million tonnes a year, and Mr Ellison indicated those plans would push ahead regardless of the outcome at AWE and Waitsia.
“Those plants stand on their feet regardless of the cost of gas,” Mr Ellison said.
MinRes’s diverse businesses include a major crushing and mining services arm, small-scale iron ore mines and plans to develop a new lightweight narrow-gauge rail haulage network.
The rail system, dubbed BOSS, is expected to cost about $700m and construction could start in the third quarter of this year.
Mr Ellison also indicated the company was targeting a new commodity in the short term.
“We are looking at a range of other commodities and we are close to finalising one other commodity, where we will be opening up a mine in the next 12-15 months in a different product we haven’t been involved in before,” he said. But he ruled out any interest in acquiring the ageing Koolyanobbing iron ore mine west of Kalgoorlie, which was recently flagged for closure by its US owner Cliffs.
The recent end of MinRes’s AWE bid had prompted conjecture about whether MinRes will be entitled to a $5.2m break fee, and Mr Ellison said there was a “very clear understanding” with AWE that the fee would be paid.
“I expect that break fee will end up in the MinRes bank account in the very, very, very near future,” he said.
