Lucky Bay mine not so lucky for mining group
A major mineral sands mine is to be closed within a week and more than 100 people will be laid off following cost and sales difficulties, paving the way for a possible sale of the mine.
The Lucky Bay mine is located 530 km north of Perth, between the towns of Kalbarri and Northampton in Western Australia.
It is owned by Mineral Resources, a listed mining services group with iron ore, lithium and energy assets, which bought the mine from its former distressed operator in September 2025.
But the conflict in the Middle East, which began with a US attack on Iran in late February and led to the closure of the Strait of Hormuz, the main oil shipping route, has damaged the mine’s profitability.
Mineral Resources said the impact was significant given the region accounts for a significant portion of Lucky Bay’s sales of heavy sand used for sandblasting and waterjet cutting.
“With materially higher diesel and transport costs, Lucky Bay’s strategic review has determined that it is in the best interests of the company and its shareholders to cease operations,” he told the stock exchange on Thursday.
The mine will go into maintenance and repair status as of July 1.
“The decision will affect approximately 110 employees who will be supported by MinRes and will be offered redeployment opportunities across the company’s other operations where appropriate,” he added.
“MinRes will consider all options for the future of Lucky Bay, including possible liquidation.”
The company estimates the decision will result in a non-cash impairment in its full-year accounts, after writing down the value of the mine at approximately $40 million.
Mineral Resources had a stake in previous mine owner Resource Development Group and had purchased the asset under a complex debt forgiveness and cash injection deal after pouring millions of investment dollars into the company.
Mineral Resources shares closed at $65.86 on Wednesday.
Australia’s Associated Press is the beating heart of Australian news. AAP is Australia’s only independent national news channel and has been providing accurate, reliable and fast-paced news content to the media industry, government and corporate sector for 85 years. We inform Australia.
