Core Lithium announces cuts to Finniss mine operations

Northern Territory miner Core Lithium has ended the year on a low as prices tumble. Read what it’s going to do.

Territory miner Core Lithium’s shares plunged by almost a quarter after the company announced it could suspend mining operations in response to plunging lithium prices.

Core Lithium’s Friday morning stock exchange announcement said the price of spodumene concentrate has declined more than 80 per cent year to date, including by more than 40 per cent in October.

Early works on BP33, the second underground mine being built at Core’s Finniss mine site near Darwin, have been suspended.

The statement comes as reports emerge of contractors with Lucas Contract Solutions employed at Core’s mine being sacked just days out from Christmas.

Core Chief Executive Officer Gareth Manderson at the official opening of the Finniss Lithium mine Picture: Glenn Campbell

A sacked worker who asked not to be identified said up to 12 employees were laid off this week.

A Lucas Contract Solutions spokesman said to contact Core, which did not respond to a request for comment.

The ASX statement said despite improving mine productivity and plant performance during the 10 months since production began at Core’s Finniss mine site, the decline in the spodumene price had led the company to investigate options to lower costs and increase productivity.

“Options being considered include changes to the mining strategy and plan, such as prioritising ore mining and possible temporary curtailment of mining operations, commercial solutions and reductions in exploration and other discretionary expenditures,” the statement said.

“Over recent months, the company has built a significant ROM (run-of-mine) stockpile and will continue processing ore and making spodumene concentrate during the wet season.

“The review will prioritise preserving business value and future options. Given the difficulties associated with mining and construction in the Wet Season and the focus on reducing expenditure, BP33 early works have been suspended.

“Core has seen steady operations since the onset of the wet season despite above average rainfall during November.

“Shipments comprising 10,350t of concentrate and 16,374t of fines were made in October, with 10,188t of concentrate and 16,246t of fines shipped in November. Another shipment of spodumene concentrate is due to be made in December.

“Future sales of the fines material will be subject to market conditions. The cost reductions and productivity improvements being targeted by the company are expected to reduce expenditures and operating costs.

“However, discussions with contractors and suppliers are not yet complete, so the amount of potential cost savings is unknown.”

Its next update will be in the December quarterly report.

Core chief executive Gareth Manderson said the company would endeavour to get the most out of tough business conditions.

“The team at Core are working at pace on all options to optimise our business and position it as well as possible in the current lithium pricing environment,” Mr 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.”

Just after 11am, Core’s share price was down 22 per cent to 26 cents.

When Core Lithium opened its Finniss mine October 2022, it was just the Northern Territory’s eighth operating mine.