Latest news with #Liontown
AU Financial Review
3 days ago
- Automotive
- AU Financial Review
Liontown reveals slower lithium growth as Ford shaves supply contract
American car giant Ford has reduced its lithium purchase order from Liontown Resources, as the slowdown in electric vehicle sales in North America adds to pressure on the cash-burning West Australian miner. Liontown's cash balance declined by a further 10 per cent over the past three months as weak lithium prices ensured revenues could not cover the ongoing cost of building an underground mine at Kathleen Valley, about 800 kilometres north-east of Perth.
West Australian
3 days ago
- Business
- West Australian
Liontown Resources readies for ‘transition year' in FY26 as it ends year with $156m cash
Liontown Resources expects FY26 will be a 'transition year' as the lithium miner moves underground at Kathleen Valley in the northern Goldfields and awaits a sustained rebound in prices for the key battery material. The Gina Rinehart-backed company on Tuesday reported more than 300,000 tonnes of spodumene concentrate had been produced in the first 11 months of operation near Leinster. Liontown recorded net positive operating cash flow of $23 million in the three months to the end of June and finished the period with $156m in the bank, despite a 9 per cent quarter-on-quarter drop in average realised prices. Revenue for the year came in at $301m. Managing director Tony Ottaviano said it had been a strong finish to the company's first year of operations. 'With lithium prices falling 24 per cent (~$US203/t) during the quarter, our strategy to process stockpiles enabled us to preserve cash and maintain a strong cash balance at year end,' Mr Ottaviano said. 'This has been enabled by the leading design and the performance of our fourth-generation process plant and the team's focus on preserving cash. 'FY26 will be a transition year. Our focus is clear, we need to complete the underground transition, manage costs and cash tightly, and prepare the plant to fully leverage high-grade, low-contamination underground ore in the second half. 'We're confident that by executing our plan in FY26, the company will emerge stronger from this low-price environment'. Liontown said plans to shift mining underground remained on track as it targets production run rates of one million tonnes a year by September and 1.5mtpa by March 2026. It said it continued to see a 'robust' outlook for lithium, underpinned by strong demand for high-quality spodumene concentrate. 'In the first six months of 2025, lithium demand has continued its double-digit growth rates, driven by strong electric vehicle sales and energy stationary storage installations,' it said. 'Global EV sales increased by 28 pe rcent and ESS installations increased by 54 per cent, both compared to the first six months of 2024. 'The current lithium price environment reflects evolving supply-demand dynamics, and we anticipate a return to more normalised conditions as demand continues its robust long-term growth trajectory.' But there could be clearer skies ahead for WA's beaten-down lithium miners. Futures covering lithium-rich spodumene have bounced as much as 29 per cent to $US790/t ($1200/t), still well short of the $US1100/t it was fetching 13 months ago but a considerable improvement on its bottom of $US605/t in the first week of June. Liontown is forecasting FY26 production of between 365,000t and 450,000t — a 24 per cent to 53 per cent increase from last financial year.
West Australian
10-07-2025
- Business
- West Australian
Liontown Resources hungry for lithium M&A despite low prices squeezing liquidity
Acquisitions are on the cards, Liontown Resources has revealed, turning the table on suggestions its lithium mine could soon be ceded to Gina Rinehart or mothballed. Kathleen Valley is transitioning from an open-pit to underground mining operation and three months ago an Australian-first milestone was achieved when maiden lithium ore was extracted below ground at the Goldfields site. The ramp-up of underground activity is going to plan, according to Liontown chief executive Tony Ottaviano, with the miner confident enough in its progress to invite media, politicians and customers to a formal opening of the underground site. Speaking at the formal opening on Thursday, Mr Ottaviano was bullish about the miner's prospects — despite a prolonged lithium price plunge. The value of the lithium-filled spodumene concentrate Liontown exports from Geraldton Port has declined more than 20 per cent over the past four months and nearly 90 per cent since the decision to build Kathleen Valley was made three years ago. WA lithium mines run by Liontown, Mineral Resources, PLS, Wesfarmers and SQM are all believed to be losing money at the current spodumene benchmark price of $US670 per tonne. Speculation has swirled for months that at least one of the local lithium miners would put their operations on care and maintenance to preserve cash until a supply glut eases and prices subsequently rebound. Liontown had $173 million of cash and about $700m of debt at the end of the March quarter – its most recent financial update. But Mr Ottaviano said Liontown was keen to 'keep proving the underground sceptics wrong' and would not be pulling the pin at Kathleen Valley anytime soon. 'We don't care for care and maintenance,' he told The West Australian. 'We are confident that with the passage of time, we will demonstrate that it (underground) will be a competitive advantage from the perspective that you get better recoveries. 'The open-pit people only too well know that at least 30 per cent of what they mine they cannot process because the blasting has created contamination.' Liontown's share price last closed at 75 cents, up 32 per cent year to date, but a far-cry from the $3 per share offer Albemarle lobbed for the company in October 2023. That offer was ultimately scuppered by Mrs Rinehart's Hancock Prospecting becoming Liontown's biggest shareholder. Mrs Rinehart's deep pockets, Hancock's top spot on the share register, and Liontown's relatively depressed stock price has stoked lingering speculation Australia's richest person could lob her own takeover bid. Mr Ottaviano and Liontown's chief commercial officer Grant Donald were tight-lipped about any potential takeover discussions with the Hancock camp or any other major mining players. Instead, Mr Donaldson said Liontown is gearing up to be the hunter, not the hunted. 'We shouldn't just think about Liontown as a target for mergers and acquisitions, ultimately we've delivered Kathleen Valley . . . we don't want to be a single asset company,' he said. 'There's still opportunity out there, and so we're very much thinking about what opportunities may be present in this low-price environment.' Mr Donald implied Liontown was open to examining opportunities in Australia or the Americas, but not the world's other lithium hotspot – Africa. 'Broadly speaking, there's nowhere off the table other than to say, you know, we're very cognisant that competing in Africa is challenging if you're not Chinese,' Mr Donald said. Mr Donald and Mr Ottaviano will likely have to compete with another Lion-themed business based in Perth ready to sink its claws into a new lithium mine. Leo Lithium has finished licking its wounds from an ill-fated adventure in Mali and has about $270m ready to spend on M&A — with a self-imposed clock ticking. 'If no M&A opportunities are significantly progressed by Q3 2025 (the current quarter) . . . funds will be returned to shareholders in the second half of calendar year 2025,' Leo stated last week. Leo has ruled out delving back into Africa. Mineral Resources' Wodgina and Mt Marion lithium mines in WA are rumoured to be on the market, but the Chris Ellison-led company has played down suggestions the mines are being shopped around.
