Australia's first lithium producer in the Northern Territory risks losing federal priority status in its race for the "white gold" that could power a local energy revolution.
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Less than a year ago, the NT was setting its sights on being a world-leading hub for battery minerals, with an emerging lithium exporter securing expansion approval.
ASX-listed Core Lithium had major project status from the federal government for the open pit Grants mine, which is the starter operation at its Finniss project near Darwin.
Miners celebrated the loading of its first big shipment to China and attracted investor attention to the region as countries vied for critical minerals needed to make electric car batteries and decarbonise economies.
The first shipment of 5500 tonnes of spodumene concentrate was sent to a long-term customer in China and the company's focus turned to ramping up the whole operation.
Works were tipped to create 360 construction jobs and 250 ongoing jobs.
But lithium prices slumped by 80 per cent by the end of 2023, slashing profit margins and the share price, and Core Lithium suspended mining as January began.
Major project status, which untangles red tape and opens doors to potential investors, will lapse in February, and Core is working with government officials to assess the merits of renewing it.
Core has begun an application process for major project status for an underground project known as BP33, which is the second proposed mine at Finniss, but early works will remain paused until market conditions improve.
CEO Gareth Manderson said lithium was still an emerging commodity and pricing is subject to many factors.
"While near-term lithium pricing is proving difficult to predict, our view is that the medium to long-term outlook remains robust," he told AAP.
"The strong performance seen recently from some lithium explorers is an encouraging sign of this."
He said Core's decision to pause mining at Finniss was not taken lightly.
"Our strategic review aims to preserve Finniss' value in a soft pricing environment while allowing us to generate revenue through the processing of stockpiles," he said.
A spokesperson for Resources Minister Madeleine King said she recognised the challenges and impacts created by concentrated critical minerals supply chains.
"That is why the government released a Critical Minerals Strategy in June 2023," the spokesperson said.
"The strategy is designed to be enduring plan and framework for policy direction and government decision-making. It is a responsible framework and a foundation to guide future action and support for the critical minerals industry."
Mr Manderson said processing and crushing from existing stockpiles would maintain cash reserves so Core could recommence mining and development of the underground project when market conditions improved.
With many western developers facing a profit squeeze and high cost of capital, China continues to enjoy a stranglehold on factory-ready supply.
Lower world prices mean overall Australian lithium exports are expected to slump to $14 billion this year, down from a record $20 billion in 2022/23, and make little improvement in 2024/25, according to the latest official forecasts.
Australian Associated Press
