Galaxy outsources spodumene, warns of redundancies
PERTH (miningweekly.com) – Lithium producer Galaxy Resources has outsourced the spodumene supply for its Jiangsu plant, in China, after the deteriorating exchange rates made its own Mt Cattlin project, in Western Australia, uneconomical for this purpose.
Galaxy has signed a three-year feedstock contract with Talison Lithium, with the company saying that the purchase agreement would represent cost benefits to Galaxy.
The contract to have spodumene delievered from Talison’s Greenbushes mine, in Western Australia, to the Jiangsu plant, was at a better rate compared with the cost of a full reinstatement of Galaxy’s Mt Cattlin operation.
The Mt Cattlin mine was placed on temporary suspension in July last year, owing to high inventory levels of spodumene at Jiangsu.
Galaxy’s MD Iggy Tan told shareholders that operations at Mt Cattlin would now remain suspended until further notice, but the project would remain operationally ready to restart in the event that Galaxy needed to resume its own internal production for Galaxy to retain security of supply.
“Given the current exchange rate and the adverse impact on local operating costs, it is financially a better option to purchase external spodumene today, instead of resuming operations at Mt Cattlin.”
Tan noted that Talison’s Greenbushes mine had the benefit of a three-fold head grade and greater capacity compared with Mt Cattlin, and could better weather the impact of the high Australian dollar.
As a result of the decision not to restart operations at Mt Cattlin, Galaxy announced that some 37 positions had become redundant.
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