Owners of the Greenbushes lithium mine in Western Australia have made several operational changes in response to the lithium downturn.
This includes tapering production amid reduced demand, with IGO, alongside its joint venture (JV) partners Tianqi Lithium and Albemarle, expecting sales from Greenbushes to be 20 per cent lower in the second half of the 2023–24 financial year (FY24).
IGO announced FY24 Greenbushes production guidance had been trimmed from between 1.4 million tonnes per annum (Mtpa) and 1.5Mtpa of spodumene concentrate to 1.3Mtpa–1.4Mtpa, with production to be “marginally reduced” to “effectively match inventory build with product logistics”.
Reduced production will increase costs of production, with IGO suggesting costs would be above the top end of FY24 guidance ($280/t–$330/t).
“Despite the short-term weakness in the lithium market, the JV partners at Greenbushes are strongly aligned on continuing to drive value from this world class operation,” IGO managing director and chief executive officer Ivan Vella said.
“IGO is pleased with the new arrangements which balance near term market weakness whilst maintaining the leading position of this world class asset.”
Vella said Talison’s construction of a third chemical grade processing plant (CGP3) at Greenbushes would continue. Set for commissioning in the first half of 2025, CGP3 will have a processing capacity of 2.4Mtpa producing up to 500,000tpa of lithium concentrate.
A new pricing mechanism will also be applied to spodumene offtake volumes from Greenbushes, which will reset monthly based on the average for the previous month.
The mechanism will reference the average of four price reporting agencies, including Fastmarkets, Asian Metals, Benchmark Minerals Intelligence and S&P Platts.
The decision to taper Greenbushes production comes after Core Lithium was forced to suspend mining and development works at its Finniss lithium mine in Northern Territory, owing to unfavourable market conditions.
Operations won’t fully reach a standstill with Core continuing to process established ore stockpiles. As of early January, Core said about 280,000 tonnes of ore stockpiles had been made available for processing since December 31 2023.