Polaris Energy Storage Network learned that on January 29, Australian lithium miner IGO announced that the world's largest lithium mine, Greenbushes Mine, which is jointly operated with Tianqi Lithium and Albemarle in the United States, will reduce the output of lithium concentrate by 100,000 tons this year. At the same time, the company also revised its pricing mechanism for lithium mine sales.
According to the IGO announcement, the affected Greenbushes lithium project is operated by joint venture company Windfield, a subsidiary of Talison Lithium, which is jointly owned by TLEA and Albemarle. TLEA is a joint venture between Tianqi Lithium and IGO in Australia, of which IGO is a strategic investor introduced by Tianqi Lithium by way of capital increase and share expansion, holding 49% of TLEA shares. According to Tianqi Lithium's previous announcement, the Greenbushes mine is the world's largest and highest-grade lithium mine in production, and it is also the world's lowest-cost spodumene mine, with lithium resource reserves of about 8.24 million tons of lithium carbonate equivalent.
In recent months, the company has been working with partners to consider offtake volumes for spodumene concentrate and discuss a lithium concentrate sales pricing mechanism that would apply to operations at the Greenbushes project, IGO said. Currently, the IGO Board of Directors has agreed on a new pricing mechanism that will apply to SC6 in the future0 export of spodumene concentrate, effective January 1, 2024.
Under the new pricing mechanism, spodumene concentrate** will be reformulated on a monthly basis based on the average of the previous month, which will be based on the average of the four major reporting agencies, including Fast Markets, Asian Metal, Benchmark Mineral Intelligence and S&P, minus a 5% volume discount to form the FOB price in Australia.
In addition, the announcement also made it clear that the spodumene concentrate capacity of the Greenbushes project in 2024 will be lowered to achieve the purpose of effectively matching inventory with logistics. According to IGO, sales in the second half of 2024 are expected to be about 20% lower than production due to on-site inventory overhangs.
According to the 2024 production guidance for the Greenbushes project proposed by IGO, SC60 spodumene concentrate capacity will be lowered from 1401.5 million tonnes per year to 1301.4 million tonnes per year, equivalent to a reduction of 100,000 tonnes. While production costs are unchanged in the guidance at this time, IGO expects actual costs to be above the upper end of its guidance. Talison is currently finalizing its FY2024 budget, and IGO will make the necessary updates to the cost in its February 22, 2024 report.
Not long ago, on January 12, Australian lithium producer Core Lithium also suddenly announced that in response to the continued downward trend of lithium mines, the company will suspend the mining of open-pit lithium mines operated by its finniss.
Read: Australian lithium miner Core Lithium announces suspension of mining.