The Bald Hill lithium mine located 50km south-east of Kambalda in the Goldfields region will be placed on care and maintenance until market conditions improve, the company announced on Wednesday.
Mining and mobile maintenance will cease immediately, while the spodumene concentrate plant and accommodation will close by early December.
The company's billionaire founder and managing director Chris Ellison said it was "a prudent decision but not one made lightly" and was in line with efforts to reduce costs across the business in recent months.
Shares in Mineral Resources dropped 6.7 per cent or $2.54 to $35.11 in morning trade.
Australia is the world's biggest producer of lithium, which is used in batteries to power electric vehicles, phones, laptops and large-scale energy storage.
Producers have suffered a three-quarters drop in its price since 2023.
New supplies coming online in China, Africa and South America, combined with a slowing in EV sales growth, sparked the price crash, with no sign of a return to the peak of 2022.
Some 300 Mineral Resources employees will lose their jobs, however, all Bald Hill employees will be first in line for redeployment across other parts of the business.
If redeployment is not possible, the redundancy process will begin.
The company also announced a significant upgrade to the mine's resource to 58.1 million tonnes at 94 per cent lithium oxide, from a 2018 estimate of 21.7Mt.
It was evidence that Bald Hill was a "high-quality asset with a long-term future", it added.
"Bald Hill is a significant value opportunity for MinRes once conditions in the lithium market improve," Mr Ellison said.
Emerging producer Liontown Resources on Monday cut production at its flagship Kathleen Valley lithium mine in WA to adapt to the low-price environment, months after producing its first spodumene concentrate.
"We will revisit what we need to do should the market conditions improve," CEO Tony Ottaviano said, while insisting there was strong long-term demand for lithium.
Mr Ellison admitted in October to failing to properly disclose revenue from his overseas entities to the Australian Taxation Office and will step down from the business in the next 12-18 months.
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