Perth, May 2, 2026, 06:05 (AWST)
Mineral Resources Ltd has signed formal investment and shareholder agreements with South Korea’s POSCO Holdings for the sale of 30% of a new lithium joint venture, moving a US$765 million partnership into the regulatory and closing phase. The venture, LithCo, will hold MinRes’ existing 50% interests in the Wodgina and Mt Marion lithium mines in Western Australia.
The timing matters. One day earlier, MinRes raised full-year volume guidance across key divisions and said net debt had fallen by about A$400 million over the March quarter. Its shares closed Friday at A$66.70, up 4.7%, putting the stock among the stronger ASX 300 gainers for the session.
The agreements give investors a clearer marker on MinRes’ deleveraging plan, though not a completed deal. The company reported liquidity of A$1.8 billion at March 31, up from A$1.4 billion at the end of December, while net debt fell to about A$4.5 billion from A$4.9 billion.
Managing Director Chris Ellison called the POSCO signing a “critical step” and said the partnership remained a “landmark investment” in Australian lithium. POSCO Holdings President Ju-Tae Lee said the tie-up would help the “stabilisation of the global battery materials supply chain.”
Under the terms first announced in November, POSCO will pay US$765 million for a 30% stake in LithCo, equal to an indirect 15% interest in each of Wodgina and Mt Marion. MinRes will retain 70% of LithCo, remain operator of both mines, and keep working with Albemarle at Wodgina and Jiangxi Ganfeng Lithium at Mt Marion; POSCO will receive spodumene concentrate, the lithium-bearing material processed into battery chemicals, in line with its stake.
But the transaction is not done. MinRes now expects completion in the first half of fiscal 2027, later than the first-half calendar 2026 target set when the binding terms were announced, because it still needs further long-form documents, offtake and marketing paperwork, Foreign Investment Review Board approval and merger clearances.
Onslow Iron, MinRes’ big Pilbara growth engine, produced 7.8 million tonnes and shipped 7.2 million tonnes in the quarter on a 100% basis, despite disruptions from tropical cyclones Mitchell and Narelle. The company lifted Onslow’s fiscal 2026 volume guidance to 17.7 million to 19.4 million wet metric tonnes, with FOB costs — costs before freight and insurance — tracking at the lower end of guidance; Chief Financial Officer Mark Wilson told analysts Onslow was “generating free cash” and “reducing debt.”
Lithium gave the update more bite. Attributable spodumene concentrate output from Wodgina and Mt Marion reached 127,000 dry metric tonnes of SC6, a 6% lithium oxide concentrate, while sales were 115,000 tonnes and the average achieved price rose 92% quarter-on-quarter to US$2,105 per dry metric tonne on a CIF basis, meaning cost, insurance and freight included.
The company also completed a US$1.3 billion senior unsecured notes offering on April 30, selling bonds due in 2032 and 2034 that are not backed by specific assets. MinRes said the proceeds, together with cash on hand, would refinance older notes, repay its iron ore prepayment and redeem part of a higher-cost 2028 bond; after planned redemptions, it expects no material debt maturities until May 2030 and annual finance costs about A$150 million lower.
Wilson told analysts the new notes alone would cut annual finance costs by about A$48 million and lower the weighted average cost of debt to 7.4% from 8.4%. He said POSCO proceeds were intended to redeem the remaining US$750 million of 2028 notes, which would lower the debt cost again to 6.9% and save another A$100 million a year in interest.
The move landed in a firmer lithium tape. Liontown Resources rose 12.3%, IGO gained 3.4% and Pilbara Minerals added 2.0% on Friday, while Market Index said RBC Capital Markets kept an Outperform rating on MinRes and lifted its target price to A$68 from A$65 after the quarterly update.
Fuel is the other brake. MinRes said it had no disruption to diesel supply from the Middle East conflict, but diesel prices had doubled since March and were expected to add about A$4 per wet metric tonne to June-quarter Onslow costs, A$7 per wet metric tonne at Pilbara Hub and A$60 per dry metric tonne SC6 across Wodgina and Mt Marion; the company kept cost guidance unchanged and said mining services margins are protected because fuel costs are passed through or supplied by clients.
The next tests are blunt: close POSCO, keep Onslow running through the new shipping capacity, and show higher diesel does not bleed into guidance. Wilson said the sixth Onslow transhipper should arrive within weeks and help lift fiscal 2027 volumes toward 38 million tonnes a year, with existing infrastructure enough for the sixth and seventh vessels.
