Australian lithium producer Liontown Resources has cut the production target at its Kathleen Valley project, one of the newest lithium mines in the country, as it attempts to cut costs in a bid to survive the lithium market downturn.
The project, which was supposed to reach a ramped-up processing capacity of 3mn t/yr by the end of the January-March 2025 quarter, is instead now expected to have a processing capacity of 2.8mn t/yr, starting from the end of the firm's July 2026-June 2027 financial year. The revision came as Liontown seeks to cut costs by targeting "high margin ore", it said today.
Liontown's total sustaining capital investment is expected to "trend lower" over the coming five financial years, it said. It expects to incur a capital expenditure of A$97mn-113mn ($64mn-74mn) in January-June 2025 and is looking to save A$100mn through capital and cost optimisation.
Liontown expects the revised processing capacity to deliver on average around 530,000 t/yr of spodumene concentrate on a 6pc grade basis throughout its 2028-30 financial year.
The firm also issued its production guidance for January-June 2025, which came in at 170,000-185,000 dmt of spodumene at unit operating costs of A$775-855/dmt fob on a 6pc grade basis.
Liontown produced its first spodumene concentrate earlier this year, at an inopportune time given this year's lithium market slump amid oversupply concerns. Multiple Australian lithium firms are tightening their belts, with Pilbara and Mineral Resources having signalled some spodumene output cuts given the state of the lithium market.
Argus-assessed prices for 6pc grade lithium concentrate (spodumene) rose to $740-790/t cif China on 5 November from $735-785/t cif China a week earlier, but prices have dipped sharply from $1,900-2,150/t cif China a year earlier.
