Galaxy’s spodumene production falls in Q3

Australian lithium miner Galaxy Resources reported a drop in mining volumes and lithium spodumene production quarter on quarter in the three months to September 2018.

Lithium spodumene production fell by 35% to 31,156 tonnes produced in the third quarter compared with 47,901 tonnes in the second quarter. Mining volumes fell by 8% to 779,495 tonnes from 843,830 tonnes in the same period at its Mt Cattlin operations in Western Australia.

A delay in approvals to commence mining east of Floater Road forced Galaxy to mine mostly from two Southwest pits, which have lower grade ore and higher proportion of weathered ore relative to Mt Cattlin’s Dowling pit and east of Floater Road, the miner said.

The lower ore grade and higher proportion of weathered ore mined resulted in the processing of lower ore feed grade. The average lithium content in the processed ore fell to 0.89% in the September quarter from 1.11% in the previous quarter.

Recovery rates also fell to 42% in the reporting period from 56% previously to meet the contracted product grade.

Galaxy attributed the reduced recovery rates to a delay in the completion of the Yield Optimisation Project.

Galaxy’s average cash margin fell by 23% quarter on quarter to $411 per tonne in the third quarter from $534 per tonne, influenced by the higher unit costs of production arising from lower production.

Galaxy sold two shipments totaling 29,555 tonnes of lithium concentrate in the three months to September. This compares with 45,761 tonnes sold in the second quarter, a 35% drop. A pilot shipment of 3,000 tonnes was also made to Korean Posco.

The fall in spodumene production and shipments coincided with lower prices in the third quarter. Fastmarkets IM last assessed the spodumene min 5-6% Li2O price cif China at $750-850 per tonne on Wednesday September 26, down from $900-970 per tonne at the end of the second quarter on June 27*.

Decreasing Chinese battery-grade lithium carbonate prices, falling by 51.74% to 72,000-80,000 yuan per tonne on Thursday 18 October from 155,000-160,000 yuan per tonne on January 29 have been the main cause for the fall in the price of lithium spodumene.

Australian lithium miners calculate their lithium concentrate price against the lithium carbonate or hydroxide spot market price in China because their partners, typically a converter in China, will produce these lithium compounds to sell in China or elsewhere at the Chinese market price.

Galaxy said to have started mining at east of Floater Road having received the necessary permits in the first week of October, expecting to improve recovery rates due to the higher grade ore mined anticipated.

*All lithium carbonate, hydroxide and spodumene prices as well as Fastmarkets forecasts are available in our Battery Raw Materials Market Tracker. Get a sample of the report here.