Core Lithium weighs reducing mining operations

Perth-based lithium miner Core Lithium’s shares have taken a dive after the company announced it was considering temporarily curtailing mining operations.

The ASX-listed miner, which owns the Finniss lithium mine in the Northern Territory, told the market it was conducting a strategic review to “address the deterioration in lithium market conditions”.

Its shares closed the market down 21.2 per cent to 26 cents on the news, whipping almost $150 million of its market capitalisation which previously stood at $705.18 million.

Core Lithium said the current decline in the spodumene price, which it said had declined more than 80 per cent to date, had forced it to investigate options to lower costs and increase productivity.

Options being considered include changes to the mining strategy including prioritising ore mining and possible temporary curtailment of mining operations, commercial solutions and reductions in exploration and other discretionary expenditure.

It said over recent months it had built a significant run-of-mine stockpile and will continue processing ore and making spodumene concentrate during the NT’s wet season.

It comes after Core Lithium booked its first revenue from sales of spodumene concentrate from its Finnis operations in the 2023 financial year. 

“The team at Core are working at pace on all options to optimize our business and position it as well as possible in the current lithium pricing environment,” chief executive Gareth Manderson said.

“While we are experiencing market volatility today, our focus is on the continued safe and efficient operation of the Finniss project while preserving the value of our operating asset, projects and exploration potential.”

Core Lithium also informed the market it had suspended work on its second lithium mine, dubbed BP3, “given the difficulties associated with mining and construction in the wet season and focus on reducing expenditure”.