Galaxy Resources’ lithium concentrate production at the Mt Cattlin operation in Western Australia remained on track during the March quarter, but it could adjust operational plans to account for soft market conditions.
The company produced 14,306 dry metric tonnes of lithium concentrate at 6.06 per cent lithium oxide during the March quarter, which sits within within the 14,000–17,000 guidance.
Galaxy expects to produce 25,000–30,000 dry metric tonnes of lithium concentrate at Mt Cattlin during the June quarter.
However, the company noted that it was prioritising the processing of low-grade stockpile ore and drawing down final product inventory levels.
This accounts for the slowing lithium demands due to volatile macroeconomic conditions caused by the coronavirus pandemic, and a slowdown of new energy vehicles (NEVs) sales in China.
Chinese NEV sales dropped by 56 per cent year-on-year during the first quarter of 2020, not including sales made by Tesla in China.
China’s new battery installation capacity declined by 54 per cent year-on-year during the same period.
However, Galaxy expects a recovery in lithium demand as Chinese electric vehicle production returns to normal as coronavirus-related restrictions are gradually lifted, along with a two-year extension of Chinese government’s subsidy on NEVs.
Galaxy also plans to advance development activities at the Sal de Vida lithium and potash brine project in northwest Argentina, while adjusting to the government’s strict coronavirus restrictions.
The majority of Galaxy’s workforce at the site was demobilised after the Argentinian Government enforced a nationwide lockdown in late March, resulting in delays on on-site activities.
Galaxy’s off-site engineering work and studies on the mine were unaffected.
The company is targeting production of primary lithium carbonate in the initial stage of development, with the long-term goal of purifying the lithium carbonate into battery grade lithium.
While the project development is advancing as scheduled, Galaxy stated the speed at which it progressed would depend on future market dynamics.
In Quebec, Canada, Galaxy has continued to develop the James Bay lithium pegmatite project, which is going through its permitting stage.