The future of the Mt Cattlin mine in Ravensthorpe looks to be on shaky ground as New York Stock Exchange-listed owner Arcadium Lithium cuts costs amid languishing prices for the battery mineral.
The world’s third largest lithium producer told investors overnight the market was “clearly indicating” it does not need extra supply “at the same pace as previously expected” and pulled the plug on investment in two expansion projects in Canada and Argentina.
Arcadium’s WA operations are also under the spotlight, with chief executive Paul Graves saying the question of care and maintenance for Mt Cattlin had to be asked in current market conditions.
“If it looks clear that we’re in a period of spodumene concentrate prices that are three digits and not four digits, then I think the whole care and maintenance question becomes much more acute,” he said.
“We’re asking these questions pretty intensively internally about ‘is that the right strategy for Mt Cattlin right now?’”
A tonne of spodumene concentrate, the raw material produced from Mt Cattlin, was fetching more than $US6400 ($9744) at its peak in 2022, but is now sitting at just over $US845.
The potential mothballing of Mt Cattlin comes after Tony Ottaviano, CEO of new WA lithium producer Liontown Resources, encouraged the State Government at Diggers & Dealers to consider royalty relief to support the industry.
But WA Mining Minister David Michael evaded the prospect of immediate support, saying tax breaks would be “no silver bullet” for the sector.
Arcadium has already slashed output from Mt Cattlin in a bid to reduce its overall spending by about $US500 million over the next two years in response to market conditions.
A closure would be another blow to the nearby township at Ravensthorpe, which was also hit by the closure of First Quantum Minerals nickel mine earlier this year.
Crashing lithium prices earlier this week forced US lithium giant Albemarle to shrink output from its lithium hydroxide operations in the South West, leaving about 300 jobs in the lurch. Core Lithium shut up shop at its Finniss operations in the Northern Territory earlier this year.
The ongoing battery metals rout has claimed about 7000 jobs in all, spanning BHP, Wyloo, Panoramic Resources, IGO and First Quantum Minerals. MinRes added to the pile yesterday with 100 jobs gone from its head office.
Homegrown lithium player Allkem merged with US chemicals giant Livent at the end of 2023 in a $16 billion merger to become Arcadium Lithium.
Arcadium has exploration tenements near Bald Hill, an operating lithium mine which Chris Ellison’s Mineral Resources moved swiftly on snapping up from liquidators last year.
(20min delay)