..if it is true that Mt Cattlin is poised for closure, it is because Arcadium can't produce it for a profit at the current price, further illustrating the issue faced by lithium miners. In addition, produced inventory that can't be sold would eventually have to sold at cheaper prices as lithium produced can't stay in inventory indefinitely without losing its value.
..the producers are hoping too that by doing so, it could help lift short term pricing.
..however, miners do not close their mines when they can't produce profitably if they see it merely as a short term problem. Mt Cattlin lithium mine
Owner: Arcadium Lithium
Barely 40 kilometres away from the Ravensthorpe mine, the Mt Cattlin lithium mine is also believed to be burning cash now that lithium prices are testing $US1000 a tonne. Mt Cattlin produced lithium-rich spodumene concentrate at a C1 cost of $US636 a tonne in the three months to September 30. But C1 costs do not include the cost of paying royalties to governments and a bunch of other administrative expenses. Citi analysts reckon Mt Cattlin needs the benchmark spodumene price to be about $US1500 a tonne to break even.
Workers at Mt Cattlin were sent on an extended summer in January 2020 when the mine tried to survive a lithium price slump. In those days, Mt Cattlin was the sole asset for a company called Galaxy Resources. But Mt Cattlin is now part of a global, vertically integrated lithium company called Arcadium that is diversified by geography and product.
Arcadium’s ability to make money elsewhere will make it easier to run Mt Cattlin at a loss than it was for Galaxy, but there’s no guarantee. In the eight months it took Allkem and Livent to complete their Arcadium merger, representatives insisted they wanted to be a player in the Australian lithium sector. The next six months at Mt Cattlin will be a litmus test of those ambitions.
