Liontown goes underground to weather lithium glut

Liontown Resources has become the latest lithium producer to respond to the global glut in lithium supply, moving to less risky and expensive underground mining at its Kathleen Valley lithium mine in Western Australia.

Liontown told investors it is resetting the baseline for its mine and production plans to prioritise higher margin ore at reduced costs to adapt to the low-price lithium environment.

A revised mine plan is designed to deliver a 2.8Mtpa production rate from the end of FY27, with a focus on high margin tonnes and an expected reduction in development and fixed costs.

Liontown’s Managing Director and CEO Tony Ottaviano said: “When market conditions change, companies need to quickly adapt to meet the market.

“Through the business optimisation work done by our team, the revised mine plan and guidance demonstrates our responsiveness to the low-price environment.

“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.”

Liontown expects up to $100 million in cost reductions and deferrals through a business optimisation programme.

This would deliver an expected $775 – $855 per dmt unit operating cost for H2 FY25.

Ottaviano said: “Our goal is to ensure long-term value for our shareholders by leveraging the quality of our assets to meet strong long-term demand for lithium.

Further reading:
Liontown Resources plans lithium battery chemicals refinery

Picture: Liontown Resources/news/Works underway at Kathleen Valley, WA