Australia's Core Lithium has temporarily suspended mining operations at the Grants open pit – the starter operation at the Finniss lithium operation in the Northern Territory, amid a significant decline in spodumene concentrate pricing, according to a statement released by the company Jan. 5.
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Register NowCore Lithium had approximately 280,000 mt of ore stockpiles available for processing by Dec. 31, 2023, which would allow for sufficient stocks to feed the concentrator until mid-2024 without any further mining, the statement said.
The company will continue to closely monitor market conditions to ensure mining can recommence should market conditions improve, Core Lithium said.
The mining cost of this mine in the third quarter of 2023 was around A$1,165-A$1,250 ($780-$837)/mt, which made it one of the Australian mines with a higher production cost, said a trader.
Core Lithium's flagship asset -- the Finniss Lithium Operation -- is Australia's newest lithium mine and the only Australian lithium mine outside of Western Australia. Core Lithium commenced production and sale of spodumene concentrate in February 2023.
In the meantime, the company will continue a study of the BP33 mine while keeping early works paused until market conditions improve.
Sources said that the company's suspension of mining operations at its Grants open pit will have limited impact on supply in the market in the near term.
However, Core Lithium might not be the only miner facing a tight cash flow and it should be monitored as to whether more mines will follow suit due to squeezed profit margins, the sources added.
Core Lithium had in December 2023 announced that the BP33 early works construction project was suspended at the onset of the wet season to preserve cash and limit any additional costs associated with construction in the wet season.
Spodumene prices
Spodumene prices sank throughout the year of 2023, amid a significant decline in lithium salt prices.
Platts assessed spodumene concentrate with 6% lithium oxide content at $950/mt FOB Australia Jan. 4, down about 84.2% compared with $6,000/mt on Jan. 6, 2023, S&P Global Commodity Insights data showed.
The tradable value indications for spodumene were heard lower than $1,000/mt, based on the backward calculated prices from the lithium chemical salts. There were some small volume trades of Australian spodumene at $900-$950/mt CIF China this week, but the mainstream long-term contract prices were still at $1,000-$1,100/mt, sources said.
"Miners are mostly selling based on term contracts, but they will also ask big trading companies to help them sell in the spot market," a separate trader said.