Up to 300 jobs to be cut as Arcadium Lithium announces it will mothball Mt Cattlin mine near Ravensthorpe

WA’s mining sector will be hit with more job losses as Arcadium Lithium reveals it will mothball the Mt Cattlin mine in Ravensthorpe by the middle of next year, marking the first WA domino to topple from the battery metal’s current price downturn.

About two-thirds of the 250 to 300-strong workforce at the site are employed by WA contractor NRW Holdings.

NRW has declined to comment on the situation.

More than 8000 jobs in the WA mining sector have now been lost since last year as the State grapples with ailing nickel and lithium demand, on top of an iron ore price trending in the wrong direction. The bulk of the job losses have occurred this year.

Nasdaq-listed Arcadium told investors Thursday Perth time it would put the Mt Cattlin site on care and maintenance by mid-2025.

It comes less than a month after Arcadium Lithium’s Australian Head of operations, Liam Franklyn, told The West Australian that lights would stay on at the site for the foreseeable future, but that looking at care and maintenance was on the cards.

“Really what changed over the last month was we as an organisation got a bit more of an acute view of the supply chain . . . and that’s a view that’s not uncommon,” he said on Thursday.

“We don’t think prices will support the ongoing mining which is the open pit expansion.”

According to a June 2023 update, then-Allkem — the other half of Arcadium prior to merging with Livent at the end of last year — had enough reserves to keep mining the open pit at Mt Cattlin until FY2027.

“As a result of these decisions, the company expects to increase net expected cash flow in 2024 and 2025 cumulatively by approximately $US75 to 100 million ($111.6m to $149m),” Arcadium announced on the Nasdaq.

“Care and maintenance will keep the mine and processing facilities in a position to potentially resume operations when market conditions become more favourable.

“Arcadium Lithium will continue to explore the viability of underground mining at the Mt Cattlin site, which could potentially extend the remaining mine life.”

Peter Rundle MLA, the Member for Roe, said the announcement was a “devastating blow to the communities of Ravensthorpe and Hopetoun and will potentially affect up to 300 local jobs during a cost-of-living crisis.”

The Mt Cattlin announcement comes less than eights months after First Quantum Minerals decided to switch off its Ravensthorpe nickel mine, wiping out 530 jobs.

Last month Tony Ottaviano — the boss of Australia’s newest lithium miner Liontown Resources — urged the State Government to consider royalty relief to avoid the fate that befell the nickel industry.

The State Government introduced a 50 per cent royalty rebate on nickel sales from the March quarter for 18 months.

The West Australian understands in recent weeks discussions about a similar rebate for lithium miners, on a selective basis, have been progressed.

Mt Cattlin was operated by Galaxy Resources between 2009 and 2012, before being placed on care and maintenance in 2013. It came back to life in 2016.

A note from broker Citi this week estimated Mt Cattlin had the highest production cost of any active lithium mine in Australia, all of which are located in WA. Liontown’s Kathleen Valley — currently in a ramp-up phase — took second spot and Mineral Resources Mt Marion was the third most expensive.

Greenbushes is the only lithium mining operation believed to be making a profit at current prices.

Association of Mining and Exploration Companies chief executive Warren Pearce said the lithium industry is continuing to be hit by “unfavourable global winds”.

“It is no secret that lithium prices have flatlined over the past 12 months and Western Australia is feeling the pressure as a consequence,” he said.

“AMEC is in constant contact with our member companies about what kind of assistance could be effective, and we will continue to engage with government on these matters.”