Posted on 12 Nov 2024
Australian lithium producer Liontown announced Monday it has trimmed the production targets for its Kathleen Valley lithium project to preserve cash amid the ongoing lithium market downturn.
Located in Western Australia, the mine only started producing spodumene concentrate in July, with the first concentrate shipped in late September.
The miner says it is “resetting the baseline” for the project to “prioritise higher margin ore at reduced costs to adapt to the low-price lithium environment.” Kallanish understands Liontown now plans to produce 2.8 million tonnes/year from the end of fiscal year 2027, down from its previous target of 3m t/y by the first quarter of 2025.
“When market conditions change, companies need to quickly adapt to meet the market,” says ceo Tony Ottaviano. “Through the business optimisation work done by our team, the revised mine plan and guidance demonstrates our responsiveness to the low-price environment.”
However, the company says it is preserving expansion potential in the mine and processing plant for when circumstances improve.
“Our decision to mine underground affords Liontown the flexibility to target high margin areas of our tier 1 resource and scale our operations to meet the market, including preserving the ability to pursue expansion when the market recovers,” the executive explains.
In addition, the miner looks to save up to AUD 100 million ($65.83m) in cost reduction and deferrals through its business optimisation program.
This year, lithium players have been reeling under low lithium prices due to an oversupply of the mineral, alongside slower-than-expected EV demand.
Liontown shipped 22,000 wet metric tonnes (wmt) of spodumene concentrate on 26 October, with an additional 22,000 wmt scheduled for early this month. It expects unit operating costs of AUD 775 to AUD 855 per dry metric tonne for the second half of the fiscal year.
Source:Kallanish
