26/10/2020 - 17:00

Altura Mining in receivership

26/10/2020 - 17:00

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Perth-based lithium producer Altura Mining has been placed in receivership after the ASX-listed company was unable to refinance its debt, placing 100 jobs at risk.

Altura Mining in receivership
Altura employs about 100 people at its Pilgangoora mine in the Pilbara. Photo: Gabriel Oliveira

Perth-based lithium producer Altura Mining has been placed in receivership after the ASX-listed company was unable to refinance its debt, placing 100 jobs at risk.

Altura employs about 100 people at its Pilgangoora mine in the Pilbara, with a production capacity of 220,000 tonnes of lithium spodumene concentrate per year.

It also has head office staff in Perth.

Richard Tucker and John Bumbak of KordaMentha Restructuring were today appointed receivers and managers.

The appointment by secured creditors followed unsuccessful attempts by the company to refinance   more than $250 million of debt.

Mr Tucker said the receivers would immediately begin a sale process and place the mine and processing plant on care and maintenance.

“Altura produces a very high-quality product that is well received by offtake counterparties,” he said in a statement.

“We expect significant interest in the asset and are hoping to complete a sale before Christmas.”

Mr Tucker said Altura, like all lithium producers, had been hurt by a dramatic slump in prices caused by over-supply and other market factors.

“Prices for the lithium spodumene have fallen by about 50 per cent in the past two years.

“This means that Altura has been losing money for some time.

“It was not sustainable and the company was simply too highly leveraged.”

In an update to shareholders last month, Altura managing director James Brown hailed the company's ability to maintain production during the downturn. 

"Our ability to continue to operate at full capacity through this challenging time differentiates Altura from our peers and is a testament to our entire team and their ongoing efforts,” he said.

Mining contractor NRW Holdings has disclosed it has an estimated net exposure to Altura of $9 million.

NRW, together with subsidiary Action Drill & Blast, provides mining and drill and blast services to Altura at its Pilbara mine.

The Altura appointment comes after the collapse last year of a smaller lithium miner, Alita Resources, which is subject to a deed of company arrangement.

Other producers, such as ASX-listed companies Pilbara Minerals and Galaxy Resources, have restructured their operations to cope with the market downturn.

This includes reduced mining activity, with a focus on processing existing stockpiles.

Another player in the sector, Chinese company Tianqi Lithium, has put some of its assets on the market after suffering a big blow-out in the cost of building its refinery at Kwinana.

As well as the refinery, it owns a half share of the giant Talison Lithium mine at Greenbushes.

The downturn in the market has also prompted Covalent Lithium, which is half-owned by Wesfarmers, to defer the development of its planned mine and refinery.

Altura’s lithium is further refined overseas for the manufacture of batteries for electric cars, solar batteries and other products.

Mr Tucker said the medium and long-term prospects for lithium prices were excellent as demand for electric cars and solar batteries increased.

“There has already been strong interest to buy the company and we expect a vigorous sale process,” he said.

 

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