Australia’s Liontown Resources posted a bigger half-year loss on Friday, as the lithium developer boosted capital spending ahead of first production at its flagship Kathleen Valley project in Western Australia in the coming months.
The company said the project is on track to start production in mid-2024 and on budget at A$951 million ($624.1 million). In January, it flagged it may delay the planned ramp-up of the project’s underground expansion.
Lithium prices have fallen around 70% over the past year due to slower-than-expected demand from companies that make batteries for electric vehicles. Prices, having steadied in recent weeks, fell sharply in China overnight, leading to losses across the Australian lithium sector on Friday.
Liontown’s net loss after tax widened to A$31 million in the six-month period ended Dec. 31, from A$6.9 million a year earlier.
Last month, peer Pilbara Minerals also reported a plunge in its first-half profit and reduced capital expenditure forecast due to the downturn in prices.
Earlier this week, Liontown – the target of an aborted takeover bid in October by Albemarle – refinanced its debt facility for $363 million to support the Kathleen Valley project’s ramp-up.
Shares of Liontown ended 8.4% lower at A$1.250 on Friday.
“It’s a stock I am happy to just observe at this stage and not invest in,” Brad Smoling, managing director at Smoling Stockbroking said.
($1 = A$1.5235)
(By Echha Jain, Megha Rani and Melanie Burton; Editing by Dhanya Ann Thoppil, Savio Dsouza and Sherry Jacob-Phillips)
