Kathleen Valley Lithium Mine Commences Production
Liontown Resources Limited (ASX: LTR) achieved significant milestones in the first half of the 2024–25 financial year (H1 FY25), marking a pivotal period for the company as it transitioned from project development to production at the Kathleen Valley lithium operation in Western Australia.
Spodumene concentrate production commenced on 31 July 2024, with the company producing 116,854 dry metric tonnes (dmt) by the end of the period. The Board officially declared commercial production at the Kathleen Valley processing plant, effective from 1 January 2025, further cementing Liontown’s position as a key player in the lithium sector.
Sales and Financial Performance
During H1 FY25, Liontown sold 100,240 wet metric tonnes (wmt) of spodumene concentrate at an average realised price of US$811 per dmt. This resulted in revenue of $100.4 million and an underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $65.9 million.
Figure 1: Balance Sheet for year ended 31 December 2024
At the close of the reporting period, the company had net assets of $758.1 million and cash and cash equivalents amounting to $192.9 million. Liontown also maintained a stockpile of approximately 1.3 million tonnes of ore, strategically positioned for its transition from open-pit to underground mining operations.
Mining Operations and Transition to Underground Mining
Liontown advanced both open-pit and underground mining operations at Kathleen Valley. The company moved a total of 6.6 million tonnes (Mt) of material during the period, including clean ore, organic solderability preservative (OSP) material, and waste.
Key highlights:
- Open-pit mining: Mined 1.7Mt of ore at an average grade of 1.24% Li₂O.
- Stockpiling strategy: Built 1.3Mt of ore stockpiles in preparation for underground operations.
- Underground development: Achieved 7,254 cumulative development metres since underground mining began in November 2023, with 3,771 metres completed in H1 FY25.
The company remains on schedule to commence full underground production stoping in Q4 FY25, with a complete transition expected in FY26.
Figure 2: Kathleen’s Corner Open Pit May 2024
First Shipments and Offtake Agreements
Liontown completed four shipments of spodumene concentrate during H1 FY25, with its maiden shipment departing on 27 September 2024. The company also initiated its spot market strategy for uncontracted volumes in October 2024.
In December 2024, the first spodumene concentrate delivery was made to long-term foundation offtake partner LG Energy Solution, Ltd. The agreement includes a 10-year offtake extension and a downstream collaboration to explore lithium refining feasibility.
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Market and Industry Context
The global lithium market continues to play a critical role in the transition to clean energy. Despite market fluctuations, demand for lithium remains strong, driven by the electric vehicle (EV) and battery storage industries.
Key industry trends:
- Lithium demand: The global lithium market was valued at approximately US$42 billion in 2023 and is projected to grow significantly over the next decade.
- EV growth: Global EV sales reached 14.2 million units in 2023, representing a 35% year-on-year increase.
- Lithium prices: Spodumene concentrate prices have experienced volatility, but long-term demand remains robust.
Sustainability and Renewable Energy Integration
Liontown integrated renewable energy into its operations at Kathleen Valley through a hybrid power station. Renewable energy penetration exceeded 80% during H1 FY25, significantly surpassing the 60% target.
Key ESG initiatives:
- Mining approvals: Secured key environmental approvals, including amendments for the Tailings Storage Facility and water licences.
- Indigenous engagement: Partnered with Native Title groups, awarding contracts to Tjiwarl businesses for site rehabilitation and vehicle maintenance services.
Strategic Outlook and Future Plans
Liontown has revised its production target to 2.3 million tonnes per annum by the end of FY25, prioritising higher-margin ore while maintaining flexibility for future expansion. The transition to full underground mining operations remains on track for FY26.
Upcoming milestones:
- Q4 FY25: Underground production stoping to commence.
- H2 FY25: Continued spodumene concentrate shipments and stockpile management.
- FY26: Full transition to underground mining operations.
With a strong financial position and increasing production capacity, Liontown Resources is well-positioned to capitalise on the global demand for lithium while maintaining operational efficiency and sustainability commitments.
