It's happened in WA nickel, and now it's happening in lithium. Australian-US lithium producer Arcadium Lithium (ASX:LTM) has suspended future expansion plans for its Mt Cattlin spodumene operation in Western Australia.
The company, formed a year ago from the merger of Allkem and Livent, said the decision was in response to the ongoing decline in spodumene prices.
Companies like BHP, First Quantum, IGO, and Panoramic Resources have closed or put nickel mines on a care and maintenance basis this year in WA due to the slump in world prices caused by oversupply from Indonesia and China.
Other companies, such as Albemarle, IGO, and Pilbara Minerals, have implemented significant spending and exploration cuts in and around their spodumene and processing operations in WA as well.
Arcadium announced on Thursday that it had decided to pause the Stage 4A waste stripping campaign at the mine and put the site on care and maintenance after completing Stage 3 mining and ore processing by mid-2025.
By halting expansion beyond Stage 3, Arcadium Lithium anticipates an increase in net expected cash flow of approximately $US75 million to $US100 million cumulatively for 2024 and 2025.
The care and maintenance strategy is designed to preserve the mine and processing facilities, allowing for a potential resumption of operations if market conditions improve.
Arcadium said it remains committed to evaluating the feasibility of underground mining at Mt Cattlin, but it seems increasingly unlikely, despite the company's claims, given the cutbacks occurring in most lithium production centers.
Arcadium stated that it does not plan to close the mine at this time.
"Unfortunately, production at Mt Cattlin beyond the current stage of the open pit cannot be justified in the current price environment for spodumene. We will maintain open and transparent communication with all of our stakeholders while supporting our employees and communities in Western Australia during this transition period," Arcadium CEO, Paul Graves, said in the statement.
The company operates in Australia, Argentina, Canada, China, Japan, the UK, and the US.
