Mining veteran Tim Goyder says Liontown Resources defied the odds to start life as a lithium producer on time and on budget. But if he is right, Liontown’s Kathleen Valley will be the last mine to open in Australia for a while.
The Liontown chairman said he would pick out a celebratory bottle of red wine from his cellar after the company declared the first lithium production at Western Australia’s Kathleen Valley on Wednesday.
Liontown Resources chairman Tim Goyder and CEO Tony Ottaviano. Trevor Collens
“We’re pretty proud of what we’ve done in adverse circumstances,” he said.
“Despite the lithium market and despite the roller-coaster ride we’ve been on the last 18 months, we built the plant and on time, on budget.”
The next step for Liontown is to ramp up production to 3 million tonnes a year and to work out where Kathleen Valley will sit on the cost curve.
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Roller-coaster 18 months The mine and processing plant were built for $951 million and Liontown expects to make its first shipment of spodumene concentrate before the start of October.
Depressed commodity prices mean the number of reported exploration projects in Australia dropped 27 per cent in June compared with the same time last year, the 17th straight month of year-on-year declines, according to S&P Capital IQ Pro.
Liontown shares were trading at 94¢ on Wednesday, still a long way from the takeover approaches the Goyder-led board rejected from New York-listed Albemarle in early 2023.
The board capitulated at $3 a share, in an offer that valued the company at $6.6 billion, but Albemarle walked away after Gina Rinehart forked out about $1.3 billion for her 19.9 per cent stake in Liontown.
The Goyder toasts history for Liontown at Kathleen Valley has also included filling the funding hole left by banks backing out of a financing package and Mrs Rinehart’s Hancock Prospecting casting doubt on Liontown’s ability to deliver on Kathleen Valley.
“This game has its ups and downs. I’ve always had a long-term view, and I’ve still got a long-term view, for the company,” Mr Goyder said.
“I think we’ve been particularly measured and agile about how we’ve dealt with the various hurdles we’ve had, and no one can deny that.”
A first in 40-year career Mr Goyder has carved out a long and storied career in mining exploration since he pegged his first lease in Western Australia more than 40 years ago, but this is the first time he has seen a project through to production.
He was a billionaire on paper when Liontown was riding high during the lithium boom and interest peaked in his nickel explorer Chalice, but both stocks have slumped along with their respective commodity prices.
Liontown received welcome news in early July when South Korean battery maker LG Energy Solutions agreed to back the company to the tune of $US250 million ($385 million) via convertible notes that turn into equity at $1.80 a share.
In the process, LG extended its existing five-year offtake deal with Liontown to 15 years.
Mr Goyder said the LG deal, along with an offtake agreement with Ford and Tesla, underlined his faith in long-term lithium demand and pricing.
“You have got to be optimistic. The real world is moving to electric vehicles, and also batteries for power storage,” he said.
Mr Goyder, who owns 14 per cent of Liontown, said the feedback from Hancock Prospecting was positive and indicated that its biggest shareholder wanted growth.
He counts on a loyal cohort of co-investors who have followed him through Mr Goyder’s many listed exploration plays.
“There’s a group that have followed the company, and it has been successful for them, and they’ve got confidence,” Mr Goyder said.
“I stay in touch with a lot of them and even at 94¢, they’re up a mile.
“Now that we’re getting into operation and production, they will go long distance.”
Brad Thompson writes across business and politics from Western Australia for The Australian Financial Review.
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