Galaxy Resources is cutting back activities at the Mt Cattlin lithium mine in Western Australia, riding out poor market conditions until the demand for battery minerals improves.
This decision comes despite the Ravensthorpe spodumene and tantalum operation delivering a record year for production volume, operating cost and product quality in 2019.
In the third quarter of 2019, Mt Cattlin produced 50,104 tonnes of lithium concentrate, which was the midpoint of its 45,000 to 55,000 tonne guidance.
Galaxy stated its corporate strategy for Mt Cattlin in 2020 was “to prioritise value over volume”, to reduce costs, maintain positive cash margins and preserve the life of the mine, while still meeting current customer demand.
“Production and existing inventory will be sufficient to satisfy contracted commitments and additional product demand in 2020,” the company stated.
“Production can be ramped up swiftly and efficiently should market conditions materially improve.”
While operations will be slowing down in Western Australia, Galaxy is targeting a final investment decision in Argentina, for the alternative technology options for its Sal de Vida project, in the second or third quarter of 2020.
As the lithium market remains shaky, Galaxy is de-risking Sal de Vida’s development by dividing it into two to three stages, allowing the company to fund phase one from its balance sheet after a partial equity sell down of the project.
Test work at the Argentinian project has demonstrated that Galaxy’s product can be purified to battery grade simply and cost-effectively, with an improved lithium recovery rate following reduced pond sizing and accelerated initial evaporation periods.
Galaxy is targeting for first production at Sal de Vida in 2022.
The company will also be starting a geotechnical program at its James Bay project in Quebec to determine the lithium pegmatite project’s future value.