Australia's Core Lithium sinks as miner mulls halting operations in Northern Territory

Core Lithium

22/12/2023 03:52

By Rishav Chatterjee
       Dec 22 (Reuters) - Shares of Australia's Core Lithium
 CXO.AX  fell more than 24% on Friday after the miner said it
was mulling winding down its mining operations in the Northern
Territory (NT) due to a slump in lithium prices.
    The stock fell as much as 24.2% to A$0.25 in its biggest
intraday drop since Aug. 17 and was the top loser on the
benchmark index  .AXJO .
    Core Lithium, which owns the NT's only lithium mine, said
the prices of spodumene concentrate, which is a highly purified
form of lithium ore, had fallen by 80% so far this year and by
more than 40% since the end of October.
    The Western Australia-based company said it was considering
a possible temporary curtailment of mining operations,
commercial solutions and reductions in exploration and other
discretionary expenditures, while announcing a strategic review
of its operations.
    Core Lithium said it had a significant stockpile of ore on
site and "will continue processing ore and making spodumene
concentrate during the wet season".
    "The strategic review ultimately spelt big trouble for the
share price today," said Tim Waterer, chief market analyst at
brokerage KCM Trade.
    "The news set off alarm bells for investors, with the
combination of slumping lithium prices and the announced mining
shutdowns not boding well for the bottom line of the company
moving forward." 
    Core Lithium also flagged suspension of early works at its
planned second lithium mine near Darwin, BP33, which is expected
to cost around A$50 million ($33.93 million). 

($1 = 1.4736 Australian dollars)

 (Reporting by Rishav Chatterjee in Bengaluru; Editing by
Subhranshu Sahu)
 ((Rishav.Chatterjee@thomsonreuters.com;))