Australia’s Liontown moves to underground Li mining at Kathleen Valley

Liontown

Australia’s Liontown moves to underground Li mining at its Kathleen Valley complex. Australia’s Liontown moves to underground Li mining after it stopped open-pit mining. Therefore, the producer is prioritising higher-grade feed and lower unit costs.

Liontown will keep processing stockpiled open-pit ore into the early July 2026–June 2027 financial year. The company previously relied heavily on open-pit ore for mill feed. Meanwhile, open-pit operations provided 56% of total mined ore in July–September 2025.

Higher-grade underground ore targets better recoveries and costs

Australia’s Liontown moves to underground Li mining to lift lithium recoveries at Kathleen Valley. The company expects recoveries to reach about 70% by March 2026. That compares with 58.3% in 2024–25 when it relied mainly on open-pit ore.

Lower recoveries hit output and guidance last year. Liontown produced 155,000 tonnes of spodumene concentrate in 2024–25. However, that fell below its 170,000–185,000 tonne guidance due to weaker recovery performance.

Australia’s lithium ramp-up raises the bar for operating discipline

Australia’s Liontown moves to underground Li mining as national supply growth continues. Australia’s Office of the Chief Economist raised its lithium production forecast for 2025–26. It expects Australian lithium mine output to grow 9.1% per year across 2024–27 financial years.

Other producers are also expanding spodumene capacity. Talison Lithium increased Greenbushes spodumene capacity by about 500,000 tonnes per year to 2.14mn tonnes per year. As a result, cost control and recovery optimisation will matter more across the lithium supply chain.

The Metalnomist Commentary

This shift is a classic move from volume to margin. However, underground execution can introduce dilution and scheduling risk. The operators who stabilise recoveries will outperform in a crowded spodumene market.