Core Lithium suspends Grants Open Pit mining operations after market crash
Core Lithium chief executive said international market value had plummeted but the CLP is blaming the government for the company’s mass lay-off.
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Northern Territory miner Core Lithium’s chief executive Gareth Manderson said the company was “here to stay” hours after announcing it had suspended operations at the Grants Open Pit mine at Finniss, 80km south-west of Darwin.
The move was revealed in an ASX announcement published early Friday, with at least half the site’s workforce expected to lose their jobs.
Mr Manderson said he did not know when full operations would resume but was confident mining would be reactivated some point in the future.
He said Core’s managers were very aware of the human cost of recent decisions and the company’s primary focus was to return to mining and full operations as soon as possible.
Mr Manderson praised Core’s teams in mining and production and said recent decisions had been based solely on the 85 per cent in plunge in the price of spodumene – the key lithium ore mineral – in 2023.
Works at Core’s operational Grants mine will wind down over coming weeks with contractors from Northern Australia Civil leave the site.
Production of the remaining 280,000 tonnes of ore stockpiled at Finniss is expected to deplete mid this year.
Lucas Contract Solutions employees at early works for Core’s BP33 underground project were laid off the site last December.
Mr Manderson declined to say how many employees had been stood down, saying there were about 300 people on the site, with the mine being the largest employer – of which about half of its workers would go.
“Best to think about it in those terms, being respectful of the different contract companies and businesses and that’s a detail they’re managing,” he said.
“The context is we have contract mining and processing and contracting companies will make decisions in that space
“The mining and production teams haven’t missed a beat through our operations. The performance of the mine was great and the production plant continues to do well but the price is 85 per cent lower than last year and fell 50 per cent in October.
“At end of the day markets rise and fall and we as a business have to manage in that space with our workers, the government and community in mind and make decisions that allow us to get back to full operations.”
The company considered options other than closing Grants including high-grading where just ore would be mined but other operational elements would be ignored.
But he said they could then delay a swift restart when market conditions allowed extraction to resume.
“Our focus is on preparing the site for the resumption of operations as soon as possible. As I said, we are really pleased with the progress and performance of the mining team and the processing team on the site and on the job.
“This is a very difficult set of circumstances we’ve found ourselves in but we are aware of the resourcefulness and robustness of the Northern Territory people and the Territory has provided us with an excellent base and workforce.”
Core’s share price fell 11.54 per cent to 23 cents shortly before closing.
Politicians weigh in on collapse
Lithium’s market value has dropped internationally but the CLP is blaming the NT Government for the mining company’s decision to lay off about 150 site workers.
Opposition Leader Lia Finocchiaro said Territory Labor had not developed enough projects for the economy to withstand one project’s “hibernation”.
“What we’ve got is a situation where there are many jobs that may not be able to be reallocated to other projects, and that’s because our economy isn’t strong enough,” Ms Finocchiaro said.
“Ultimately, commodity prices are international factors and they are going to continue to flow up and down over time – what governments can do is provide a very steady base for business to grow.
“That’s why cutting approval time frames and costs at the start of a project help projects going forward to withstand those inevitable fluctuations.”
Ms Finocchiaro said it was “yet to be seen” how newly-minted Mining Minister Mark Monaghan would rise to his portfolio’s challenges but held concerns for the industry.
“What we’ve got is our single biggest source of revenue in the Territory – the mining industry – in the hands of a brand new minister with eight months to go to an election,” she said.
“Nicole Manison was forced to step aside after not getting the support of her team, but she was well regarded by industry as one of the only people in that entire team who cared about growing the Territory’s economy.
“While she (was) unsuccessful in that pursuit, what we have now is a champion cast to the backbench.”
Despite the opposition’s concerns around the lack of projects to support the laid-off workers, Mr Monaghan said he was confident the displaced Core Lithium employees would find alternative employment in no time.
He said miners, technical staff, and scientists were in high demand across the industry.
“Working with these mines, they can’t get enough – I’m sure Newmont’s struggling to fill its quota, so I’ve got no doubt that the technical capability that is moving on... will be snapped up very quickly.”
NT miners booted as operations ‘suspended’
The Northern Territory’s newest miner has temporarily suspended its mining operations following an 85 per cent price decline for spodumene concentrate.
Core Lithium chief executive Gareth Manderson said it was a tough call to make, but the company’s ore processing would continue to generate revenue in the interim.
The move was revealed in an ASX announcement published early Friday.
It remains unclear how many workers will be impacted by the decision, after hundreds were sacked in recent weeks, some just days out for Christmas, which Mr Manderson blamed The Wet and poor market conditions for.
Friday’s announcement detailed that there were about 280,000 tonnes of ore stockpiles available for processing as of December 31.
The resource will tide Core’s processing revenue over until mid-2024 without any further mining.
“We will focus on managing our cash reserves prudently,” Mr Manderson said.
“We are working to put the business in the best position possible to recommence mining and proceed with BP33 when market conditions improve.”
Mr Manderson said the company was committed to “finding a path forward” with the NT government’s support.
Core’s decision would halt movement in the Grants Open Pit in order to reduce the cash cost of the company’s Finniss operations.
The pit will be maintained to ensure a smooth transition back to work when market conditions improve.
“We understand that this decision is difficult for employees, contractors and some local businesses,” he said.
“There is significant prospectivity in the NT both in the Finniss district and in our broader regional tenement holding.
“We will continue to take a longer-term view and explore for new lithium resources.”
The closure comes after the Australian Stock Exchange named Core the worst performing stock in 2023.
Core Lithium has been contacted to confirm the number of job losses related to this decision.
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Originally published as Core Lithium suspends Grants Open Pit mining operations after market crash
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