Australia’s Liontown flags lithium project potential

Australian lithium developer Liontown Resources has confirmed the potential for its Kathleen Valley project in Western Australia (WA) to become a significant open-pit lithium mine from 2024 before transitioning to underground operations later in its mine life.

A pre-feasibility study shows that the project can sustain a 26-year mine life from its maiden ore reserve of 50.4mn t, supporting processing of 2mn t/yr of ore for output of 295,000 t/yr of spodumene concentrate grading 1.2pc lithium oxide.

It is expected that the mineral resource of 74.9mn t — the fifth biggest in Australia — will be upgraded next year as part of a definitive feasibility study, which will also examine the value of by-product tantalite pentoxide production.

While 2019 has been a torrid year for lithium producers hit by a production glut and bottleneck in Chinese chemical conversion capacity, several analysts are calling a bottom in the market and forecasting firmer demand and prices as the electric vehicle (EV) era unfolds in the 2020s.

Kathleen Valley's development is being timed to benefit from the next wave of lithium demand that will coincide with all major automakers releasing ranges of EVs and phasing out fuel-only models.

The project has an estimated pre-production cost of A$240mn ($163mn) and a payback period of four years. Cash production costs are estimated at A$564/dry metric tonne (dmt), excluding tantalite credits. The initial open-pit mine is expected to lead to the integration of an underground operation to expand production and bring forward higher-grade material from an expanded mineral resource estimate.

"Kathleen Valley has all the ingredients to underpin a world-class battery metals business that we think will deliver substantial returns and value for our shareholders for decades to come," managing director David Richards said.

Liontown earlier this month declared a maiden mineral resource of 14.9mn t estimated to contain 144,530t of lithium oxide at its Buldania project, also in WA.

By Angus Macmillan

source: Argus Media