The operation has been closed temporarily because lithium spodumene prices have fallen to $600 per tonne from $800 per tonne over the past six months, North American Lithium said.

Over that time, Fastmarkets has reported on the continuing fall in spodumene prices, which decreased month on month throughout the second half of 2018 due to the lower lithium carbonate spot prices in China.

The price of lithium spodumene, min 5-6%, had fallen by 27.02% to $600-750 per tonne cif China on January 30, from $900-970 per tonne on June 27 last year, according to Fastmarkets’ monthly market assessments.

The price of lithium carbonate in China, which is typically used to calculate lithium spodumene prices, fell by 50.31% between January 2018 and the start of 2019, according to Fastmarkets’ assessments.

It was 75,000-83,000 yuan ($11,157-12,347) per tonne on January 3, 2019, down from 158,000-160,000 yuan per tonne on January 4, 2018. The most recent assessment, on February 21 this year, was 73,000-81,000 yuan per tonne.

Lithium carbonate prices in China fell over the course of 2018 due to a slight oversupply of material in the Chinese domestic market, driven by the ramping-up of spodumene production in Australia. Material from that source is used by converters in China to produce lithium chemical compounds such as lithium carbonate and lithium hydroxide.

The lower lithium chemical compound prices in China delayed price negotiations between Chinese converters and spodumene producers across the globe due to different price expectations.

Market participants spoken to by Fastmarkets agreed that spodumene prices as low as $600 per tonne would not be sustainable for some spodumene mines, and mines with higher operating costs could be closed temporarily.

North American Lithium will use the time during its closure to do maintenance work and to install equipment needed to improve processes at the spodumene plant.

It exported 140,000 tonnes of lithium spodumene over the past year, and expected to resume operations in the summer of 2019.