Core Lithium Ltd (ASX: CXO) has been undertaking a strategic review of operations to address the deterioration in lithium market conditions.
The price of spodumene concentrate has declined more than 80% year to date, including by more than 40% since the end of October 2023.
As noted at the company’s recent AGM, Core continues to focus on factors within its control including reducing costs, enhancing the mine plan, timing growth projects and optimising assets.
The company has now been producing concentrates for 10 months and seen improvement in mine productivity and plant
performance over that period.
However, the current decline in the spodumene price has caused the company to investigate a range of 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.
Over recent months, the Company has built a significant 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. Discussions with contractors and suppliers are not yet complete so the amount of potential cost savings is unknown.
The company will provide an update on the cost-saving initiatives in its December quarter report or prior in the event of any material developments.
“The team at Core is working at pace on all options to optimise our business and position it as well as possible in the current lithium pricing environment,” chief executive Gareth 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.”
