Liontown boss Ottaviano casts further doubt on lithium price floor while shares in the miner tumble

There are “other ways” taxpayer funds can be spent to support the lithium industry instead of a price floor for the critical mineral, Liontown Resources chief executive Tony Ottaviano has declared. Australia and the US last week agreed to jointly invest more than $US3 billion ($4.6b) in the production of critical minerals across the two countries, mainly in rare earths. The pact includes the adoption of commodity price floors for certain rare earth elements and potentially for other critical minerals, including lithium, produced by Australian mines. That mining production is tied to plans to create a national stockpile of critical minerals. Mr Ottaviano on Tuesday joined his counterpart at WA lithium rival PLS in casting doubt over the long-term viability of the Federal Government purchasing locally-produced lithium concentrate at a minimum guaranteed price. “The government has demonstrated that it can support commodities, such as lithium, through investment like the National Reconstruction Fund Corporation has done,” he said. “Rare earths is, I think, a specific and unique circumstance that the government will look at, but for lithium I think there’s other ways to support businesses.” Liontown secured $50 million from the NRFC in August as part of the company’s $363m capital raise to shore up its balance sheet while production ramps up at the Kathleen Valley mine. Liontown’s stock suffered a blow on Tuesday after costs rose and sales slumped amid a transition from open-pit to underground mining at its flagship Kathleen Valley. The mine in the Goldfields generated $68 million of revenue during the three months ended September 30, equating to a quarter-on-quarter fall of 29 per cent. Its all-in sustaining costs jumped 10 per cent to $1354 per dry metric tonne of spodumene concentrate sold. Production was up one per cent to 87,172dmt but sales fell 20 per cent to 77,474dmt. The sales figure was “exacerbated” by port congestion at Geraldton delaying a shipment at the end of September, according to Liontown. The average spodumene concentrate grade shipped was down from 5.2 per cent to 5 per cent and the average released price — on a benchmark 6 per cent basis — dropped 5 per cent from $US740/dmt to $US700/dmt. On Friday, PLS reported a 20 per cent increase in its average realised spodumene concentrate price. Liontown said its price decline was due to the impact of a “backward-looking pricing formula” that referenced “the lows of May and June for the majority of sales” in the September quarter. The company bled $44m of cash from its operations, with $420m left in the bank. Shares in Liontown finished down 12.9 per cent to $1.06. Its stock still remains up about 85 per cent so far in 2025. Despite the market malaise, Mr Ottaviano said the results were “expected internally” with the Kathleen Valley open pit on the cusp of depletion. The last batch of ore from the pit is set to be scooped out by the end of this year. “With the open pit nearing completion and underground production scaling, we’re entering the next phase at Kathleen Valley,” Mr Ottaviano said. “As cleaner underground ore increasingly feeds the mill, recoveries will improve and we remain on track to meet our 70 per cent lithia recovery target by the end of the third quarter of the 2026 financial year. “We’ve laid the foundations through FY25 and the early part of FY26. The focus from here is on continued execution, cost discipline, and unlocking the full performance of the Kathleen Valley operation”.