SQM delays investment decision on Australian Mount Holland lithium project to 2021

Santiago — SQM has put off a decision on its Mount Holland project in the latest delay to hit Australia's once-booming lithium sector, the Chilean company said Thursday.

Following the completion of a definitive feasibility study, SQM and partner Wesfarmers now plan to take a final investment decision on the project in Western Australia in the first quarter of 2020.

The delay will give the companies time to improve the project's capital and operating costs and work with customers on defining product specifications, SQM said.

But the move comes just two months after SQM told analysts that the mine, designed to produce 45,000 mt/year, would begin producing spodumene concentrates later this year, followed by lithium hydroxide in 2021.

Amid the slide in lithium prices since 2018, several companies have put back or shelved projects in Australia's hard-rock lithium sector, which tends to have higher costs than the brine operations found in South America.

Earlier Thursday, Galaxy Resources said it had reduced mining rates at its Mount Cattlin mine in Western Australia "to conserve mineral resources until market conditions improve." The company hopes to resume mining and processing progressively from mid-February onward.

But SQM still believes Mount Holland will see the light of day, describing it as "one of the most competitive spodumene deposits in the world."

"Our work to date confirms that Mount Holland is a high-quality project which will play an important role in the global lithium market," said CEO Ricardo Ramos.

In Chile, SQM is expanding the lithium carbonate capacity of its operations on the Salar de Atacama to 120,000 mt/year by 2021 from 70,000 mt/year currently. Engineering work has begun on a further expansion to 160,000 mt/year by the end of 2023.