South Korea’s LG Chemical is believed to be among several companies approached to acquire a stake in the Wodgina lithium project, a joint venture between Mineral Resources Ltd and US-based Albemarle.
The stake represents 50% of the project.
The move came as Chris Ellison's MinRes faced increasing reputational pressures that weighed heavily on its share price. Market sources suggest Ellison was seeking upwards of A$2 billion for the stake when it was quietly put on the market late last year, but that figure failed to attract serious bidders. Japanese trading groups, including Mitsubishi, were also said to have been in the mix.
No sale
Despite the speculation, Mineral Resources now insists that Wodgina is no longer for sale and that it has no plans to raise equity. Nonetheless, talk of a potential capital raising reportedly surfaced just weeks ago.
Bond markets have reacted with caution. MinRes bonds were recently trading at a 10 to 15 cent discount to the dollar, reflecting broader market volatility. The company’s net debt stood at A$5 billion as of December, with analysts expressing concern over a potential liquidity crunch, given its A$2.5 billion in current assets and A$2.1 billion in liabilities.
Last year, MinRes sold the remaining half of its Onslow iron ore haul road to Morgan Stanley Infrastructure Partners for A$1.3 billion. However, the company’s shares have halved following Ellison’s admission of past tax misconduct, an ongoing ASIC investigation into governance practices, and a class action lawsuit.
With its high exposure to the iron ore market, further price declines could deepen challenges for the group.