PERTH (miningweekly.com) – Lithium miner Galaxy Resources has unveiled plans to scale back mining rates in 2020 by around 40%, in response to the difficult market conditions that lithium is facing.

The ASX-listed miner told shareholders that the decision to scale back operations followed a review into the Mt Cattlin operation, in Western Australia, which is now nearing completion.

The review was aimed at prioritizing value over volume, to ensure the Mt Cattlin operation continued to produce a positive operating cash margin, while preserving the resource life and to maintain balance sheet capacity to advance Galaxy’s development portfolio.

Galaxy noted that stockpiled ore from Mt Cattlin would be co-treated with mined material, through the implementation of the ore sorters, enabling concentrate production to be maintained at around 75% of the current rate.

Cost reduction initiatives will also continue to be a major focus area at Mt Cattlin, with Galaxy undertaking a full review of all key contracts, with the miner saying on Thursday that it had identified several potential sources of cost reduction, some of which have already been realised.

The reduced scale of operations, combined with the cost initiatives currently under way, would allow Galaxy to maintain its low unit operating costs and a forecasted positive operating cash margin.

The company said that production volumes, plus the existing product stockpiled, were expected to be sufficient to meet the requirements from contracted customers in 2020.

Since no redundancies are expected with the cut-back in mining operations, Galaxy noted that it would be able to ramp up production to full rates once market conditions improve.

Meanwhile, the miner on Thursday said that it was on track to reach its production targets for the 2019 financial year, following a strong September quarter.

The Mt Cattlin operation produced 50 014 t of lithium concentrate in the three months to September, down slightly from the 56 460 t produced in the previous quarter, on the back of lower grades.

Unit cash costs during the quarter reached $387/t produced free-on-board, reinforcing Mt Cattlin as one of the lowest cost lithium concentrate operations globally.

Total shipments for the quarter were slightly below guidance at 58 278 t.

Lithium concentrate production for the full 2019 has been targeted at between 183 000 t and 193 000 t.