Greenbushes may have clung on to an annual profit in FY24, but a subdued spodumene market led to a sharp downturn in mine operator Talison's latest financials.
One of the world’s most profitable lithium mines has taken a financial tumble as the EV market falters and rehabilitation costs grow.
The Greenbushes mine in WA’s South West may have clung on to an annual profit in FY24, but a subdued spodumene market has ushered in a sharp downturn in its latest financials.
According to new data from mine operator Talison Lithium, Greenbushes delivered a net profit of $708.5 million for its three owners — Perth-based IGO (25 per cent), China’s Tianqi Lithium (26 per cent) and U.S. chemical giant Albemarle (49 per cent) — in FY24.
But those figures paint a starkly different picture to the staggering $6.29 billion profit Talison recorded in FY23, showcasing a major hit to the financials of the world's largest hard-rock lithium mine.
It’s not just Greenbushes feeling the pinch; the lithium downturn has been severe worldwide. Current spot prices hover around just US$830 ($1,300) per tonne, reflecting the commodity’s ongoing weakness and a gun-shy investment market as the take-up for electric vehicles remains soft.
Amid the poor market conditions, Greenbushes' sales revenue dropped from $9.87 billion in FY23 to $1.97 billion over FY24, despite growing its cash generation metrics to $389.2 million for the year.
And while Greenbushes may prove to be the ‘last man standing’ in Australia’s limping lithium mine market — analysts at Citi reckon the low-cost mine is the only asset primed to withstand a deeper lithium downturn — its owners and operators aren’t immune to broader industry struggles.
Greenbushes JV partners IGO and Tianqi both declared losses in FY24, pressured by declining lithium prices and challenges in their downstream processing operations.
And Greenbushes' processing facilities have been plagued by mechanical issues, preventing them from reaching their intended production capacity and exacerbating financial losses.
As the Talison-operated mine approaches its operational summit, the cost of rehabilitating the site is only growing.
Company financials reveal that mine rehabilitation provisions have ballooned from a $39.7 million billing two years ago to $126.5 million in FY24.
Despite market volatility, a third chemical-grade processing plant is under construction at Greenbushes, budgeted at roughly $160 million.
Plans have also been laid to stretch the hard rock mine south and east to support a new waste rock landform.
A tantalum and lithium mine since the 1980s, Greenbushes has long been the poster child for battery minerals in WA.
However, with prices under pressure and mounting operational challenges, Greenbushes’ financials remain up in the air as its owners and operators navigate a perpetually turbulent industry.
Talison Lithium representatives have been contacted for comment.
