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Pilbara Minerals has emerged as the frontrunner to acquire the neighbouring
Altura lithium operations from the administrators of Altura Mining

tipped to recover by 2024. in Nevada.
“We’re not in a hurry to rush into production The DFS on Rhyolite Ridge highlighted a
now and the board is quite firm on the princi- lowest-quartile AISC of $US2,510/t for pro-
ple that we will not go into production unless duction of 20,600 tpa lithium carbonate and
the price of lithium [spodumene] improves,” 174,400 tpa boric acid over a 26-year mine
Richards told Paydirt. life. This is a huge point of difference for
“I think the key is we’ve got time. We don’t ioneer chairman James Calaway, who held
want to be a miner for the honour and glory of the same position at established producer
it. We want to be a profitable miner and the Orocobre Ltd for eight years until the com-
key is to make sure that the price recovers, pany became a producer in 2016.
is sustainable and we see the increasing de- “Like any other material that we produce, it
mand that people are predicting around the has the tendency to be cruel to those at the
place. top part of the cost curve and the companies
“We’ve got the opportunity to learn from that do well are the ones at the lower part of Steve Promnitz
other groups and be disciplined when it the cost curve because they can withstand
comes to making that decision to mine.” the downturns,” Calaway told Paydirt. and it was “only a matter of time” before that
Liontown updated its original PFS pub- “Now they may not be happy about it, they filtered down to the next group of developers.
lished in 2019 following this year’s twofold may not be joyous, but they don’t run the risk “As we learnt last time, although that may
increase in the resource base at Kathleen of being taken out. Nobody at Orocobre is lift the sector, there’s always going to be parts
Valley to 156mt @ 1.4% lithium and 130 ppm running around dancing in the streets about of the sector that are going to do better than
tantalum. The updated PFS released in Oc- the price they’re receiving today for their lithi- others and it’s been our view for a couple of
tober is based on a new reserve of 71mt @ um, but they’re also not worrying about falling years now that those who are going to do well
1.4% lithium and 130 ppm tantalum. apart. And they know better days are coming are the ones that produce a consistently high
Key financial outcomes for the updated and they’re coming soon. quality product,” Promnitz told Paydirt.
PFS included life-of-mine free cash flow of “In our case, we have the benefit and we “There is quite a bit of lithium out there, but
$4.8 billion, post-tax NPV of $1.12 billion and do truly believe that we will be the lowest-cost one of the reasons that the price is depressed
IRR of 37%. Capex is estimated at $325 mil- producer on the planet…so if our company is there was a lot of poor-quality material that
lion with payback in three years, underpinned goes into receivership, there’s going to be a had to get reprocessed in China. We wanted
by cash operating costs of $US283/dmt. whole lot of blood on the floor because we are to leapfrog that step and produce a high-
Unlike other lithium mines in WA, Kathleen at the very bottom of the curve and a substan- quality battery product consistently and then
Valley will be both an underground and open tial part of our operating costs, about 70%, is secondly to do that with a sustainable and
pit operation, with processing via whole of ore covered by a very low volatility material in the responsibly sourced benefit.
flotation to produce spodumene and tantalum boric acid.” “We’re fortunate we’ve got a project that
concentrates. According to ioneer’s DFS, the company can be scaled up to pretty much whatever
Richards said while whole of ore flotation will need $US785 million to build the proposed size the market wants, with a process [direct
was not a conventional process for lithium 2.5 mtpa mining and processing operation at extraction] which is quite simple and doesn’t
production, it provided a greater degree of Rhyolite Ridge. Managing director Bernard use much water and produces a quality prod-
certainty in making spodumene. Rowe said high capital costs in the construc- uct.”
“We were cognisant of the fact all the other tion of other lithium projects had proven their And while it may seem counterintuitive to
developers and processors at the moment downfall and he did not want his company to be thinking about downstream options for
have been struggling with their grades and suffer the same fate. lithium projects when concentrate producers
recoveries in the concentrate,” he said. “Not only did they have to battle the high in Australia are yet to have mastered their
“Everyone has got to remember the whole cost [of operations]…the fundamental issue craft, Liontown has put forward a strong case
lithium space is pretty new and there’s a lot here was that they used incredibly expen- for future production of a battery-grade lithium
of learning going on. We wanted to take ad- sive capital to build the projects,” Rowe said. hydroxide monohydrate or lithium sulphate
vantage, but learn from those guys that have “There was very little-to-nil margin for error monohydrate.
gone before us in the last couple of years and and that’s something our board is adamant Richards said the company’s recent down-
work out how we can approach it differently to that we just won’t do.” stream scoping study had received an “over-
ensure we do our best to avoid the issues that While his company is less advanced in the whelming positive” reaction from investors
the others have had.” development cycle as Liontown and ioneer, which he put down to Liontown acknowledg-
Liontown chief operating officer Adam Lake Resources Ltd managing director Steve ing this was not its skillset and a partner with
Smits said a predominantly underground Promnitz believes the support is there for the requisite expertise would be needed to
mining operation allowed the company to be lithium companies which show early promis- assist with such a development.
more selective about which ore could be pro- ing signs for production of a consistent high- “The financial metrics are such that if we
cessed first. grade product. could do it, then it’s a no brainer, but we have
“The key was to get higher grade and lower Lake has done just that in 2020 and recently to acknowledge our expertise,” Richards said.
costs earlier in the mine life as opposed to teamed with the likes of Hazen Research Inc “We’re confident that we can mine a de-
later and make the project hum from day one and Novonix Battery Technology Solutions to posit and confident we can produce a spo-
rather than wait to the end to make a lot of finalise test work on production of a 99.97% dumene concentrate, but obviously the next
money,” Smits said. battery-quality lithium carbonate product from step of turning it into battery chemicals, that’s
Low-cost production is the signature fea- the Kachi brines project in Argentina. something where we probably need some
ture of another ASX-listed hopeful in ioneer Promnitz said end-user support from key help.”
Ltd which has the most advanced lithium markets in China, Europe and the US had
play in the US with its Rhyolite Ridge project already lifted for existing lithium producers – Michael Washbourne

aUSTRaLIa’S PaYDIRT DeCeMBeR 2020 - JaNUaRY 2021 Page 97