Liontown Begins Underground Lithium Mining at Kathleen Valley

Liontown

Kathleen Valley Shifts to Underground Lithium Mining

Australian battery minerals firm Liontown has officially begun underground mining at its Kathleen Valley lithium site. The move marks a strategic transition from open-pit mining, aimed at improving efficiency and long-term resource value.

The first underground ore batch yielded approximately 1,500 tonnes, with trials showing lithia recoveries above 70%. This milestone positions Kathleen Valley as Australia’s only operational underground lithium mine, setting it apart in a competitive sector.

Production Outlook Amid Market Challenges

Liontown projects underground output to reach 500,000 t/yr of spodumene concentrate, targeting 700,000 t/yr by 2030. By mid-2026, the company expects its mill to be supplied entirely from underground output and stockpiles, increasing operational efficiency.

However, facing weak lithium prices, Liontown reduced its broader mine output guidance by 200,000 t/yr, now aiming for 2.8mn t/yr. For H1 2025, production guidance stands at 170,000–185,000 dry metric tonnes, following Q4 2024 output of 88,683 dmt.

Despite market softness, demand from large-scale battery projects — especially in the Middle East — offers optimism. Each project demands up to 20GWh in storage capacity, nearly matching Kathleen Valley’s annual spodumene production.

The Metalnomist Commentary

Liontown’s underground transition reflects a broader trend of resource optimization amid lithium market turbulence. While short-term price pressure persists, demand from global energy storage and EV sectors remains resilient. Underground mining may emerge as a competitive differentiator as supply constraints tighten and end-user quality demands rise.