Codelco acquires Enami’s 10% stake in Teck’s Quebrada Blanca mine
The deal will contribute 25,000 to 30,000 tonnes of copper to Codelco's annual output.
Arcadium Lithium (NYSE: ALTM; ASX LTM), one of the world’s largest producers of the battery metal, plans to idle its Mt. Cattlin spodumene mine in Australia next year in another step to cut costs in a weak lithium market. It’s already paused its Galaxy project in Quebec and delayed part of an expansion at Fénix in Argentina.
Putting Mt. Cattlin into care and maintenance aims to increase cash flow by a potential $100 million, adding to $500 million in reduced spending over two years at Galaxy (formerly known as James Bay), and Fenix. Arcadium could resume operations at the Mt. Cattlin site in Western Australia if the spodumene market rebounds, the company said on Thursday.
“With operating cash costs at the site previously quoted in the low-$900s, the asset is underwater at current prices,” BMO Capital Markets said in a note on Thursday. The most recent Fastmarkets spodumene price in China is $760 per tonne, BMO Commodities Research director Colin Hamilton noted.
Lithium prices have plunged from record highs two years ago, pulling down other miners such as Chile’s SQM (NYSE: SQM), the world’s second-biggest lithium producer, which reported a 63% decline in quarterly profit last month. Albemarle (NYSE: ALB), the largest lithium producer, has slashed costs and delayed projects among its brine and hard-rock operations. Analysts at S&P Global forecast lithium prices to remain subdued for five to 10 years as oversupply and a consumer backlash over electric vehicles hurt the market.
Mt. Cattlin’s operations would be suspended in next year’s first half after ending its stage three work, Arcadium said. Waste stripping in a stage four expansion is being suspended. The mine produced 30,000 dry tonnes of lithium carbonate-equivalent in the first quarter, about half the amount in 2023’s last three months as operations slowed.
“Unfortunately, production at Mt. Cattlin beyond the current stage of the open pit cannot be justified in the current price environment for spodumene,” CEO Paul Graves said in a release. “We remain committed to developing our global portfolio of hard rock assets and are confident that they will continue to be a significant part of Arcadium Lithium’s growth story.”
Arcadium is seeking a cost-sharing partner at Galaxy and adjusting its timing for expansion at two lithium carbonate projects at the Salar del Hombre Muerto in Argentina. Rather than execute Fénix stage 1B and Sal de Vida stage one simultaneously, the projects are to be completed sequentially. They are to produce a combined 25,000 tonnes of the battery material.
Shares in Arcadium Lithium fell 1.4% on Thursday morning in New York to $2.42 apiece, valuing the company at $2.6 billion. They’ve traded in a 52-week range of $2.38 to $7.27.
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