Australia’s listed miner Mineral Resources Ltd (MinRes) has agreed to sell a 30 per cent stake in part of its lithium business to South Korea’s POSCO Holdings Inc in a transaction valued at approximately US$765 million (around A$1.2 billion), paving the way for a strategic joint venture and bolstering MinRes’s balance sheet after a challenging period in the lithium market.

Under the terms of the deal, MinRes will incorporate a new joint-venture entity which will hold its existing 50 per cent ownership in the Wodgina lithium mine and Mt Marion lithium mine in Western Australia.

Through that structure, POSCO will acquire an indirect 15 per cent interest in each mine while MinRes remains the operator under the prevailing partner agreements.

The agreement comes at a time when MinRes has faced pressure from large capital commitments—particularly its Onslow Iron haul-road project—and a steep decline in hard-rock spodumene prices from 2022 peaks above US$6,000 per tonne to lows around US$610 mid-2024, before recovering to approximately US$880 per tonne this year.

MinRes intends to direct the proceeds from the POSCO transaction toward reducing external debt, strengthening its balance sheet and positioning itself for future growth across its lithium and iron-ore businesses.

In response to the announcement, MinRes shares jumped as much as 10.8 per cent, reaching their highest level since October 2024 before closing up about 9.2 per cent.

For POSCO, the investment marks its first entry into Australian hard-rock lithium mines, complementing its downstream battery-materials strategy and existing joint venture with Pilbara Minerals Ltd in South Korea.

POSCO Chief Executive In Hwa Chan said the company views “energy materials as a core growth driver alongside our steel business” and is committed to securing a stable, cost-competitive supply of key raw materials.

Analysts welcomed the deal, noting that it both validates the quality of MinRes’s lithium assets and delivers a premium valuation at a time of investor scepticism in the lithium sector.

The structure retains full operational control for MinRes while unlocking value via strategic partnering.

The transaction is subject to customary regulatory clearances, including from Australia’s Foreign Investment Review Board, but boards of both companies have already approved the key terms.

The deal underscores the shifting dynamics of the global lithium value chain as producers seek integration with downstream players and major consumers secure access to raw-material supply.

MinRes will continue to hold significant exposure to its lithium assets while reducing exposure to commodity-cycle risk and financial leverage.

The move is also viewed as timely given the headwinds faced by the lithium sector globally, where oversupply and price pressure have prompted some producers to scale back production, curtail expansion plans or seek strategic partners.

By aligning with POSCO, MinRes not only secures a meaningful cash inflow but also forges a link into the downstream value chain at a time when battery-materials demand remains uncertain and raw-material sourcing is of strategic importance to global manufacturing supply chains.