Liontown Advances Underground Mining, Delivers Strong FY25 Amid Lithium Price Slump
Liontown Resources reported robust FY25 results with over 294,000 dmt of spodumene concentrate produced and commenced underground mining on schedule. The company is transitioning to 100% underground production by Q3 FY26, aiming for scalable, low-cost operations from FY27 despite a 36% drop in spodumene prices.
- Produced over 294,000 dmt spodumene concentrate at 5.2% grade in FY25
- Underground mining production started on schedule, targeting 100% underground feed by Q3 FY26
- $112 million in cost savings and deferrals achieved, exceeding $100 million target
- FY26 guidance, 365-450 kdmt concentrate production, unit operating costs A$855-1,045/dmt, capital expenditure A$100-125 million
- Maintained strong cash balance of A$156 million amid volatile lithium market
Strong FY25 Performance Amid Market Challenges
Liontown Resources has demonstrated operational resilience in FY25, producing over 294,000 dry metric tonnes (dmt) of spodumene concentrate at a consistent 5.2% lithium oxide grade. This achievement comes despite a challenging lithium price environment, with spodumene prices falling 36% over the past year. The company’s ability to adapt quickly to market volatility is evident in its revised mine plan implemented in November 2024, which prioritised high-margin tonnes and cash preservation.
Cost discipline was a hallmark of the year, with Liontown delivering $112 million in cost savings and deferrals, surpassing its $100 million target. This strong financial management helped maintain a robust cash balance of A$156 million as of 30 June 2025, positioning the company well for the next phase of its growth.
Transition to Underground Mining – Setting the Stage for FY26 and Beyond
FY25 marked the commencement of underground production stoping at the Kathleen Valley Project, with development rates progressing smoothly and infrastructure such as Australia’s largest paste plant commissioned on schedule. The transition to 100% underground production is planned for Q3 FY26, accompanied by a lithia recovery target of 70%, unchanged from previous guidance.
This transition year is critical, as it lays the foundation for scalable, low-cost operations expected from FY27. The underground mine design features dual declines and large-volume stopes, supporting an eventual production rate of 2.8 million tonnes per annum (Mtpa) with potential expansion to 4 Mtpa. The company’s focus on operational efficiency and technology deployment aims to further reduce processing costs and improve recoveries as underground operations ramp up.
FY26 Guidance and Strategic Outlook
For FY26, Liontown has set guidance for concentrate production between 365,000 and 450,000 dmt, with unit operating costs forecasted between A$855 and A$1,045 per dmt sold. Capital expenditure is expected to range from A$100 million to A$125 million, split between sustaining and growth capital to support underground development and plant upgrades.
The company remains agile in responding to market conditions, preserving expansion options to capitalize on a potential lithium market rebound. Despite near-term pricing pressures, global lithium demand continues to be underpinned by robust growth in electric vehicles and energy storage systems, supporting Liontown’s long-term growth prospects.
Operational Excellence and ESG Progress
Liontown’s operational ramp-up has been complemented by strong environmental, social, and governance (ESG) performance. The company recorded fewer injuries compared to FY24 and was recognised with the Excellence in Renewable Energy in Mining award at the 2025 Decarbonisation Awards. Renewable power usage remains high at 79%, reflecting ongoing commitments to sustainability alongside operational growth.
Looking ahead, the company’s disciplined approach to cost control, technology deployment, and mine planning positions it well to navigate market cycles and deliver shareholder value as it unlocks the full potential of the Kathleen Valley Project.
Bottom Line?
As Liontown transitions fully underground and sharpens its cost focus, investors will watch closely how it navigates FY26’s pivotal ramp-up amid ongoing lithium market volatility.
Questions in the middle?
- How will the transition to 100% underground mining impact recovery rates and unit costs in FY26?
- What are the key risks to achieving the 70% lithia recovery target by Q3 FY26?
- How might lithium price fluctuations influence Liontown’s expansion plans beyond FY27?
