The Australian lithium mining sector has experienced turbulent times over the past couple of years. Lithium prices soared in late 2021, driven by forecasts of extensive electric vehicle (EV) adoption. However, a global rush to capitalize on high prices led to an oversupply of lithium, flooding the market. Concurrently, EV sales failed to meet expectations, causing lithium prices to plummet from early 2023.
Core Lithium, one of the companies in the Northern Territory, opened its mine near Darwin in October 2022 to meet the surging demand. “There’s not too many organizations that go from an explorer to a producer, and we did that in record time,” said Core Lithium CEO Paul Brown. However, the severe commodity cycle impacted Core Lithium and several other companies.
Six months after announcing a halt in production, Core Lithium has processed its remaining ore stockpiles and shipped most of it out of Darwin Port, with about $15 million worth of processed lithium products yet to be sold. More than 300 employees have lost their jobs since January, with only about six remaining at the mine. Core Lithium is now hoping for a recovery in lithium prices. “Right now, we are in a state of care and maintenance, but in a way that allows us to restart when the [lithium] market does pick up,” Brown said. The company maintained a cash balance of $87 million at the end of June by stopping mining early.
Brown emphasized the importance of reducing business costs to restart sustainably when the market rebounds. “My role is to drive costs out of the business structures, so that when that market swings, we can open the mine in a sustainable way so we can operate in the region for a long time,” he said.
Since reaching all-time highs in late 2022, the price of lithium spodumene concentrate has dropped by about 85% to approximately $1,460 per tonne. With supply still outstripping demand and the slow growth of EV sales, MineLife senior resource analyst Gavin Wendt predicts that lithium prices will not rise in the short term. “There isn’t anything on the horizon that is going to come along and change the dynamics of the industry in terms of demand and supply,” Wendt said.
He anticipates that while EV adoption will increase long-term demand for lithium, no immediate catalyst will drive a near-term turnaround in prices. Wendt also suggested that the record prices seen in 2022 are unlikely to return. “It is going to be a more sustainable operating environment, and that’s going to suit the end users of the product — the battery makers, the electric vehicle manufacturers,” he said. Companies in the lithium mining industry will need to operate at the lower end of the cost curve to survive. 
