Mineral Resources has reported improved quarterly production from both its lithium and iron ore businesses, and continues to be all-in on its expansion plans across multiple sites in Western Australia, although its shares continue to hover close to its lowest level in a year amid the general market weakness.

The company's plain speaking managing director Chris Ellison was absent from today's update with analysts and investors, with that job left to the diversified miner's executive general manager of corporate development, James Bruce.

Despite more cautious iron ore and lithium markets, MinRes is betting pricing and demand will come roaring back and it can overcome the temporary transport issues that affected sales last quarter.

MinRes delivered an 8% increase in iron ore production to 4.8 million wet metric tonnes, however shipments were impacted by haulage and port constraints.

The news was even better at its Wodgina site in the Pilbara with Wodgina achieving record quarterly spodumene concentrate production of 45,000t, while mining rates increased 45%. 

Sales were lower at 25,000t due to port maintenance and congestion, but additional cargoes will allow a catch up this quarter. 

Strong start

Bruce said the company was off to a strong start, and in addition to confirming its FY24 guidance, he tipped there should be an improvement in the outlook for its Wodgina operation given it has only just finalised its move to 50% of the low cost mine and expects to see ongoing improvements as the third processing train ramps up and it trials ore sorting and other improvements.

At Mt Marion, a A$50-60 million decline is expected to begin construction in December while grades are improving as more fresh rock is exposed in the pit.

Rates at the mine were up 31% in the prior quarter, concentrate production increased 7%, and shipments were 64,000t.

MinRes is in advanced negotiations to add the producing Bald Hill mine, but despite numerous questions Bruce was tight lipped on anything to do with the deal to secure the asset from the liquidators of Alita Resources other than saying the deal for an undisclosed purchase price could be concluded next month.

"It is producing today, and it has produced at 140,00-150,000tpa spodumene in the past, but until the close the deal we can't say much," he said.

Bullish on lithium

Bruce said MinRes remains bullish for the fundamentals of the lithium market, with end user demand solid and supply chains stabilising.

He confirmed the company will decide if it will sell its concentrate on the spot market to index linked prices or, if the economics are favourable, direct to concentrators in China on a shipment by shipment basis.

It has just landed its first cargo in China for tolling in the coming days. 

"We want to supply volume into the market, and we probably have more flexibility than anyone else," Bruce said.

While Mt Marion continues to improve, and Bald Hill could deliver a boost, Wodgina is the focus for expansions with almost daily discussions on a potential train four.

Construction would take around two years, allowing the JV to expand the pit to ensure feed is available.

"This orebody can support what we want to do, we need to continue to open up the pit," he said.

Decisions for T5 and T6 are expected to follow soon after, and Bruce does see any tensions with Albemarle.

"The reality is Wodgina is one of the lowest cost spodumene mines in the world, and we expect costs to come down towards $500/t as we ramp up," Bruce said.

The payback for the $320 million T4 development would be measured in months, not years, he added. 

Rock solid iron ore

In the iron ore business, Bruce said start-up of the 35Mtpa Onslow project is on target to get the first haul trucks filled and on the road by June 8 next year. 

MinRes also reported its mining services production volumes were 66Mt, a rise of 14% from the prior quarter, mainly due to catching up in earlier delays.

MinRes' FY24 guidance is for 16.5-18.8Mt of iron ore from its Yilgarn and Pilbara hubs, plus 190,000-220,000t lithium from Mt Marion, and 170,000-200,000t spodumene and 20,000-25,000t of lithium chemicals.

The miner remains well funded following a US$1.1 billion note issue, and expects to book around A$400 million from the sale of its stake in the Kemerton lithium hydroxide plant and adjustments for Wodgina and Kemerton soon.

MinRes shares were up 2.7% this morning at $58.96, capitalising the company at $11.5 billion.