Mineral Resources Sells 30% Lithium Stake to POSCO for $765M to Reduce Debt

Australia’s Mineral Resources Ltd (MinRes) announced on Wednesday that it will sell a 30% stake in part of its lithium business to South Korea’s POSCO for $765 million, aiming to cut debt and strengthen its balance sheet. The news propelled MinRes shares to their highest level in over a year, rising as much as 10.8% in early trading.

The deal forms a new incorporated joint venture, which will hold MinRes’ existing 50% ownership in the Wodgina and Mt Marion lithium mines. This structure gives POSCO an indirect 15% interest in each project, while MinRes will continue operating the mines under its current agreements with partners Albemarle and China’s Ganfeng Lithium.

For POSCO, the acquisition marks its first investment in Australian lithium assets, expanding its energy materials portfolio beyond its domestic lithium hydroxide joint venture with Pilbara Minerals. POSCO CEO In Hwa Chan emphasized the company’s commitment to securing a stable and cost-efficient supply of raw materials as it diversifies from steel into energy materials.

The move comes as MinRes battles high debt from heavy capital spending on its Onslow Iron project and a sharp drop in lithium prices that severely impacted earnings. Prices for spodumene, a key lithium-bearing mineral, fell to a four-year low of about $610 per tonne in mid-2024 before rebounding to $880 — still far below 2022’s record highs above $6,000.

In August, MinRes reported an annual net loss of A$896 million and a 21% rise in debt to A$5.3 billion. The company plans to use proceeds from the POSCO deal to repay debt and strengthen its financial position for future growth. POSCO will receive spodumene concentrate in line with its 30% joint venture stake, reinforcing its foothold in the global lithium supply chain.