According to company statement, Galaxy resources intends to cut back activities at its Australian operations in Mt Cattlin until the demand for battery improves, citing poor market conditions.

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Mt Cattlin operations. Image ©Galaxy Resources

This decision comes despite the Ravensthorpe spodumene and tantalum operation delivering a record year for production volume, operating cost and product quality in 2019.

In the third quarter of 2019, Mt Cattlin produced 50,104 tonnes of lithium concentrate, which was the midpoint of its 45,000 to 55,000 tonne guidance.

“Galaxy is committed to leveraging its two world-class development assets to create a sustainable, large scale, global lithium chemicals business via organic growth,” the Company stated.

“One of the primary actions in this strategy is to advance Sal de Vida to execution in 2020.”

Galaxy has now concluded its process test work and the evaluation of alternative technologies for the Sal de Vida project. The result of this work is the selection of an in-house developed, simplified flowsheet which will underpin the development phase of the project.

“The selected flowsheet is a simplified version of the flowsheet utilised in previous study work,” reported Galaxy.

“Optimisation work has resulted in fewer process steps, reduced pond sizing and an accelerated initial evaporation period. Overall lithium recovery has improved due to lower pond losses and independent test work has demonstrated that Galaxy’s product purifies to battery grade simply and cost effectively.”

The revised flowsheet also decouples the onsite operations from the purification process, allowing purification activities to be undertaken offsite at a location of lower altitude where operating conditions are easier to control.

Galaxy will also seek to de-risk development by staging project execution in two to three modules.

“This approach allows the staging of capital expenditure, simpler management of construction logistics and reduces development risk. It also enables the first phase of development to be funded from the Company’s balance sheet after a partial equity sell down of the project,” the Company explained.

Galaxy is targeting FID for stage one in Q2-Q3 2020 with first production in 2022.

Galaxy stated its corporate strategy for Mt Cattlin in 2020 was “to prioritise value over volume”, to reduce costs, maintain positive cash margins and preserve the life of the mine, while still meeting current customer demand.

“Mt Cattlin is a stable and reliable operation currently positioned as one of the lowest cost spodumene producers,” stated the Company.

“Production and existing inventory will be sufficient to satisfy contracted commitments and additional product demand in 2020. Production can be ramped up swiftly and efficiently should market conditions materially improve.”