The Mineral Resources Ltd (ASX: MIN) share price is taking a dive today.
Shares in the S&P/ASX 200 Index (ASX: XJO) lithium miner and diversified resources producer closed yesterday trading for $37.66. In morning trade on Tuesday, shares are changing hands for $35.01 apiece, down 7.0%.
For some context, the ASX 200 is down 1.1% at this same time.
This underperformance follows the release of an update on the operations at Mineral Resources' Bald Hill lithium mine in Western Australia.
Here's what's happening.
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Mineral Resources share price tanks on project suspension
The Mineral Resources share price is taking a tumble after the miner confirmed that Bald Hill will be transitioned into care and maintenance this week. This follows on a strategic review of the project. And it comes following what management noted is a prolonged period of low spodumene concentrate prices.
The ASX 200 miner said the move will preserve cash and the value of Bald Hill's spodumene orebody for when conditions in the global lithium market improve.
The suspended operations will impact some 300 employees. Some will be relocated to other operations, while others will be provided with redundancy packages. Around 10 employees will remain on site to coordinate production ramp-down and care and maintenance activities.
Once global lithium prices improve enough to justify a restart, the company estimates that it can ramp Bald Hill back to full operation in four to six weeks.
In positive news for when lithium prices do recover, the miner also provided an update on the Mineral Resources statement for Bald Hill. The updated Bald Hill Mineral Resources of 58.1Mt at 0.94% Li2O is a 168% increase from the prior estimate of 21.7Mt.
What did management say?
Commenting on the Bald Hill operations that look to be pressuring the Mineral Resources share price today, managing director Chris Ellison said, "Bald Hill is a significant value opportunity for MinRes once conditions in the lithium market improve."
Hill continued:
Placing Bald Hill on care and maintenance is a prudent decision but one not made lightly. The decision aligns with the work we have done across the company in recent months to reduce costs.
The significant upgrade to the Mineral Resources statement is evidence that Bald Hill is a high-quality asset with a long-term future. We will continue to monitor lithium prices and site operating costs with a view to recommencing operations once conditions improve.
With today's intraday losses factored in, the Mineral Resources share price is down 40% over 12 months.
