Core Lithum closes Northern Territory mine as it hopes for recovery in global prices

It’s been a bumpy few years for the Australian lithium mining sector.

Lithium prices skyrocketed in late 2021 on forecasts of widespread electric vehicle uptake.

But as mining companies around the world rushed to take advantage of the high prices, they extracted so much lithium that it flooded the market.

Meanwhile, sales of electric vehicles failed to meet expectations, causing prices to tumble from early 2023.

Core Lithium was one of the businesses in the Northern Territory trying to meet the growing demand, opening its mine near Darwin in October 2022.

“There aren’t many organizations that go from an explorer to a producer, and we did it in record time,” said Core Lithium chief executive Paul Brown.

“We’ve had the unfortunate brunt of a pretty heavy commodity cycle that’s affected not just us, but a number of other organizations.”

Six months after announcing it would stop production, Core Lithium has processed its remaining ore stockpile and shipped most of it from Port Darwin.

It had about $15 million worth of processed lithium products still to sell.

More than 300 people are thought to have lost their jobs since January.

Core Lithium would not confirm the exact numbers to ABC.

Only about six workers remained at the mine.

Since then, the company has pinned its hopes on a recovery in lithium prices.

“Right now, we’re in a state of care and maintenance, but in a way that allows us to resume when [lithium] the market is growing,” Mr Brown said.

Core Lithium made the decision to stop mining early, allowing it to maintain a balance of $87 million at the end of June.

Brown said his focus was on reducing costs for the business.

“My role is to take the costs out of the business structures so that when this market fluctuates, we can open the mine in a sustainable way so that we can operate in the region for a long time,” he said. .

“When we do [restart] it will be with the advantages of the last 18 months of lessons”.

Prices are expected to remain low

Since reaching all-time highs in late 2022, the price of lithium spodumene concentrate has fallen by about 85 percent to around $1,460 a tonne.

With supply still outstripping demand and continued slow growth in electric vehicle sales, MineLife senior resource analyst Gavin Wendt said lithium prices were not expected to rise in the short term.

“There’s nothing on the horizon that’s going to come along and change the dynamics of the industry in terms of supply and demand,” Mr. Wendt said.

“In the longer term, we expect that the use of electric vehicles will increase and this will generate further long-term demand for lithium, so consumption will continue to increase.

“But at the same time, there is no single catalyst that points to a near-term turnaround in lithium prices.”

Mr Wendt said it was unlikely the record prices paid for lithium in 2022 would be seen again.

“It will be a more stable operating environment and it will suit the end users of the product – battery manufacturers, electric vehicle manufacturers,” he said.

“Those companies that are in [lithium mining] industry and looking to enter the industry will have to be at the bottom of the cost curve in order to survive.”