No Kathleen Valley stope this month – Liontown

“We are on track to do our first stope by the end of the quarter.” So said Antonino Ottaviano, CEO of Australian miner Liontown Resources, in January of his firm’s plans to move to underground exploitation of its Kathleen Valley lithium deposit. But the firm has now confirmed to EV inFocus that first stoping will not be until the April-June quarter.

The firm denies that the project is delayed. “Underground stoping is scheduled to commence in the fourth quarter of the 2025 financial year, and this has always been the plan,” says the firm’s investor relations manager Leanne Kite.

“To clarify, there has been no delay,” she adds. But Ottaviano was clearly slightly more optimistic of a first stope by end of March a few months ago. Stoping is the process of extracting the desired ore from an underground mine, leaving behind an open space known as a stope.

The discrepancy may lie in an April-June quarter target for first underground production. “Production stoping activities are on track for quarter four FY ’25,” Ottaviano also said in January. “Stoping… will commence around April ’25,” added Jon Latto, Liontown’s CFO.

Deliberate pause

“We could have started stoping in November, but it is not the most efficient way of doing it,” says the firm’s chief commercial officer Grant Donald. The postponement to April was driven by a desire to ensure there were sufficient headings to allow access. “We are making sure we have got enough headings open so that equipment is fully utilised on site from day one,” Donald adds.

Liontown has also been working on ventilation and a paste fill plant. Ventilation is “well on track to be in place before we start stoping”, Ottaviano confirmed in January. While the paste fill plant will not be needed “for a while”, it is built and will be commissioned when stoping starts.

Liontown’s Kathleen Valley project is ramping up to an initial capacity of 2.8mn t/yr, to produce c.500,000t/yr of spodumene concentrate, and the move from initial open pit mining to predominately underground operations is a key milestone. The firm processed almost 620,000t in October-December, its first full quarter of production after its mid-2024 start-up, equivalent to 2.4mn t/yr, and recovered 88,700t of concentrate at a weighted average grade of 5.2pc lithium oxide.

It is forecasting 2.3mn t for 2025, but “in pockets, we have gone and hit [a] 3mn t/yr rate,” Ottaviano says. “So, we know the plant has that capacity.”

Recovery rates are also rising, with 55pc in October to December, compared to 45pc in the project first quarter of operations, and 59pc in December — “which already exceeds some of our peers after only five months of operation,” says Donald. Liontown is targeting 70pc recovery by the end of March next year.

More spot than usual

Volumes sold to customers since the commencement of production to the end of December topped 100,000 wet metric tonnes (wmt), which “went to a combination of our offtake partners and to spot customers”. “There has been more spot activity in this [October-to-December] quarter than there will be going forward,” says Latto. The firm has a 15-year deal with South Korea’s LGES, a five-year deal with an option to extend to 10 with US OEM Ford, and a five-year deal with US EV maker Tesla.

“A particularly strong December saw us produce 36,400 dry metric tonnes (dmt), which enabled total shipments of 81,300dmt during the quarter,” Donald adds.  These volumes were delivered via four shipments to customers, including an inaugural cargo to LGES on the largest vessel Liontown has loaded so far at 33,000wmt, although the firm is expecting to ship even larger cargoes in the current quarter.

“We are focused on trying to parcel our own shipments to customers on larger vessels,” says Latto. “That is allowing us to pull the freight down from $29-30/t down as low as $19/t”

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At the start of January, its declared commerciality on its Tesla deliveries, and it may soon be adding to its customer list. “We continue to see robust inbound interest from customers looking to establish regular spodumene purchases, from well-known names with an established track record,” Donald says.

“The demand for spodumene, even against a relatively weak backdrop of chemicals, remains robust, demonstrating the embedded optionality of buying spodumene in the face of uncertainty and the continued evolution of battery chemistries.”