A mid-tier miner with a knack for the niche is making a name for itself in the Northern Territory. On its way to becoming the Territory’s only lithium producer in 2022, Core Lithium has paved the way for others to follow.
Despite valuable resources and existing infrastructure to support a significant mining ecosystem, the Northern Territory has remained largely overlooked in the context of the Australian industry – until now.
It’s no Pilbara iron ore sector and doesn’t have history like the Victorian Goldfields, but there is potential. This is evidenced by mine developer, Core Lithium.
The company began as an explorer more than a decade ago before it recognised the value in battery metals and Northern Territory lithium.
Core Lithium managing director Stephen Biggins says the advent of electric vehicles was the catalyst for the company’s rise to success.
“We started the company with assets in South Australia and the Northern Territory focussed on copper and uranium,” Biggins tells Australian Mining.
“At the end of 2015, we saw opportunities around the electrification of the world’s vehicle fleet and considered how we could put our competitive advantage of our knowledge of the Northern Territory to work to position ourselves in this sector.”
Core purchased a significant portion of the Bynoe pegmatite field in February 2016, which has been mined sporadically for tin and tantalum for more than 100 years. The announcement cited similarities between Finniss and the Greenbushes lithium mine in Western Australia, making Core wonder why other companies hadn’t already acquired the project.
Biggins puts the Territory’s small mining footprint down to a simple matter of geography.
“Frankly, I think it’s just distance from corporate offices. Other explorers may have just seen it as another plane trip to get to places like this. The irony lies in the fact that when it comes to both staffing the operation and then when exporting time arrives … we’ve gained the efficiencies being this close to Darwin city and the port,” he says.
“But there’s great opportunity and geology in the Northern Territory, and as we’ve been able to show, we’ve been able to work successfully through the state’s approvals process required for the development of a new mining project.”
Except it hasn’t all been smooth sailing for the company or the wider lithium market, with a three-year price slump leaving many companies in the lurch.
The price of lithium carbonate was around $US20 ($26) per kilogram in mid-2018, before it gradually dipped to $US6 in late 2020. Prices have since bounced back, however, surging to $US25 during the second half of 2021.
The Wodgina lithium mine in Western Australia – a joint venture between Albemarle Corporation and Mineral Resources – serves as an example of this revival.
Wodgina was put on care and maintenance in 2018 until prices recovered to enable economically viable operations.
Just as Wodgina heads towards a resumption, Core has timed its run well and plans to mine first ore before the end of 2022. This achievement will follow several years of studies and contract negotiations.
In 2021, Core has added a second mineral lease over the Bynoe field, received the Federal Government’s Major Project Status, signed a five-year deal with Darwin Port, received grants under the Modern Manufacturing Initiative, upgraded its definitive feasibility study, signed multiple construction contracts and ultimately began construction on October 26.
Biggins’ biggest piece of advice to companies looking to replicate Core’s success is to have belief in their assets and that markets do rebound.
“There have been obstacles which were less in our control involving commodity cycles and equity investment cycles,” he says.
“That’s been challenging because in the mining industry your access to finances and the value of your chosen commodity does move up and down.
“But because of the good bones of the project, even at the bottom of these cycles, we were able to attract financing and bring the project forward to the construction-ready state it’s in now.”
With belief and 500 square kilometres of high-quality pegmatite fields, the next steps were to navigate the approvals process to establish the Finniss lithium mine.
Despite being less experienced in dealing with mine approvals, Biggins says the Northern Territory Government was rather sensible throughout the whole process.
“I think their approach has been quite reasonable. The things that have been asked of us have been appropriate along the way in regards to providing environmental and economic outcomes for the Territory,” Biggins said.
“Like all government process, there are opportunities for the process to move more quickly than it does. But regarding the scope of the project, it’s been appropriate and in line with anything you’d expect anywhere else in Australia.”
The Northern Territory Government is putting in significant work to improve the process for Core and for future miners looking to enter the Territory’s most valuable sector.
This includes a Minerals Development Taskforce as the government targets an economy worth $40 billion by 2030.
Mining and Industry Minister Nicole Manison says she understands what miners are looking for as they dig into Northern Territory soil.
“Companies are looking for a supportive government environment including certainty in regulation, timely approvals and high-quality data to de-risk investment,” Manison says.
“The Taskforce will play a leading role in identifying, assessing and recommending policy, strategy and regulatory options to accelerate significant private investment in mineral projects to facilitate growth of the mining sector.”
Prior to this, Core was included in multiple rounds of government funding under the Resourcing the Territory initiative, which saw 18 projects from 15 companies awarded grants to support brownfield drilling programs.
To achieve its goals of facilitating a strong mining sector and wider economy, the government has worked to reduce the time needed for companies to prepare applications and for the government to assess.
“The Finniss lithium project was fully permitted for mining less than four years after the first exploration hole was drilled, which demonstrates our commitment to timely approvals for new projects,” Manison says.
The biggest issue for the government, however, is competing with major lithium mining regions like those in Western Australia.
To be competitive, Manison says the Territory must harness and present its biggest benefits, like its resources and infrastructure.
“We believe that the Territory has a number of advantages including the location of our known lithium deposits very close to port infrastructure, our proximity to Asian markets and a supportive government environment,” Manison says.
Core has taken all three of these factors in its stride in the pursuit of fully financing the Finniss project.
With faith in its ability to outplay market cycles, the company was able to secure multiple offtake agreements and cement itself in the global lithium supply chain.
An agreement with the world’s largest lithium producer, Gangfeng, was finalised in late October, for the offtake of 75,000 tonnes of lithium oxide spodumene concentrate per year for four years.
This followed another agreement with Yahua – a lithium supplier to Tesla – for another 75,000 tonnes per annum of spodumene concentrate.
These two agreements combine for about 80 per cent of Finniss’ production over the first four years, greatly pleasing Biggins and his team.
“I’m personally very proud of what we’ve been able to achieve as a team and a company,” Biggins says.
“The value we’ve been able to deliver for our shareholders has been great, and the contribution we can now make to the Northern Territory has been great too.”
This contribution includes about 250 full-time jobs from construction to operation, as well as opportunities for the Territory to become entrenched in the supply of metals for clean energy technologies.
Manison acknowledges how important projects like Finniss are to achieving these goals.
“The Territory Government is very committed to supporting the growth of our critical minerals sector, to enable the Territory to become a significant player in supply chains for materials to support emerging low-emissions industries such as renewable energy and electric vehicles,” she says.
With this demand for battery metals sky high, Biggins says Core is well positioned to grow and meet its offtake agreements into the foreseeable future.
“We’re feeling great about the future of the business. From what we’re reading, seeing and experiencing in talking with a range of parties from the battery metals supply chain, we can’t see how lithium isn’t going to be in a perpetual deficit of supply for a significant period of time,” he concludes.
This article appears in the December issue of Australian Mining.