Mineral Resources will shut its Lucky Bay Garnet Mine near Kalbarri from July 1, leaving about 110 jobs affected and raising fresh concerns for one of Western Australiaâs small coastal communities. The Chris Ellison-led miner said a strategic review found the project was no longer economically viable, with rising diesel costs and disruption linked to the ongoing conflict in the Middle East weighing heavily on the operation.
The Lucky Bay project is located south of Kalbarri in Western Australia’s Midwest region, about 600 kilometres north of Perth. The operation mines garnet, a hard mineral primarily used as an industrial abrasive in applications such as abrasive blasting and waterjet cutting. For Kalbarri, a town of around 3,500 people with limited employment opportunities outside tourism and mining, the announcement is expected to have far-reaching consequences.
MinRes said the site will be placed into care and maintenance from July 1 while it evaluates all options for the asset, including a potential sale. The company also expects to record an approximately A$40 million loss related to the project in its upcoming financial results.
Why Mineral Resources Is Closing Lucky Bay Garnet Mine
According to Mineral Resources, the Lucky Bay operation has become financially unsustainable after a strategic review of the business. The company cited two key reasons behind the decision: significantly higher diesel costs and weaker sales caused by the ongoing conflict in the Middle East.
The Middle East has historically represented a significant export market for Lucky Bay’s garnet products. Continued geopolitical instability has disrupted demand and created additional uncertainty for the operation. At the same time, increased fuel prices have pushed mining and transport costs higher, making it increasingly difficult for the project to remain profitable.
Rather than permanently shutting the mine, MinRes will place it into care and maintenance. This means production will stop while essential infrastructure is preserved, allowing the operation to restart in the future if market conditions improve or if a new owner takes over.
Kalbarri Businesses Brace for Economic Impact
The closure represents more than a mining announcementâit is expected to affect the broader Kalbarri economy. Mineral Resources was one of the area’s largest employers, alongside another nearby garnet operation, making the company an important contributor to local spending and employment.
Shire of Northampton chief executive Andrew Campbell said the loss of around 110 jobs would have an immediate impact on workers and their families. While not every employee lives permanently in the district, he said the majority do, meaning the effects are likely to spread across the local community.
Retail stores, cafĂŠs, accommodation providers and hospitality businesses could all experience reduced customer spending if workers relocate or household budgets tighten. Campbell also warned that the community is likely to experience a “pretty sombre mood” once the initial shock of the announcement subsides.
The situation highlights how closely regional economies are tied to major employers. Similar developments affecting Australian companies and regional industries are regularly covered in our latest business news, where ongoing market trends and corporate announcements are tracked.
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Mineral Resources said it will offer redeployment opportunities to employees wherever possible across its wider operations. While that may help some workers remain with the company, relocation may not be practical for everyone, particularly those with established families in the Kalbarri area.
The company will also assess future options for Lucky Bay, including a possible divestment. If another mining operator sees long-term potential in the project, the asset could change ownership rather than remain idle indefinitely.
The closure is particularly significant because MinRes acquired the Lucky Bay garnet operation less than a year ago from the administrators of Resource Development Group (RDG). At the time, local leaders had hoped the company’s financial strength and mining experience would help revive the project after its previous owner’s collapse.
Instead, changing global conditions have forced another major decision. The announcement illustrates how even recently acquired mining assets can become vulnerable when export markets weaken and operating costs continue to climb. Regional mines are often especially exposed because transport, fuel and logistics represent a substantial share of operating expenses.
Investors will now focus on Mineral Resources’ upcoming financial results for further details on the expected A$40 million loss and any updates regarding the future of the Lucky Bay project. Official company announcements and disclosures are available through the Australian Securities Exchange (ASX).
For Kalbarri, however, the immediate concern is much closer to home. The loss of more than 100 jobs has created uncertainty for workers, families and local businesses, while the future of the Lucky Bay mine now depends on whether market conditions improve or a new operator decides to invest in the project.
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