Jan 23 (Reuters) - Australian miner Galaxy Resources Ltd GXY.AX said on Thursday it will scale back operations by about 60% at its flagship Mt Cattlin mine in 2020, in response to weak market conditions in the lithium sector.
Galaxy said in a statement that cost reduction would continue to be a major focus at Mt Cattlin in 2020.
Last year, the miner had announced a review of operations at Mt Cattlin to focus on cutting costs and had then decided to scale back output by about 40% to preserve resource life and maintain positive cash margins. lithium miners faced severe pressure last year amid plummeting prices of the metal, as demand from Chinese customers fell after a change in the country's electric vehicle subsidies and global trade tensions.
Prices for hard rock lithium concentrate, called spodumene, have fallen below $500 a tonne this year, locked in a relentless downhill slide of 29% from this time last year.
Galaxy said it is targeting production of between 14,000 and 20,000 dry metric tonnes of lithium concentrate in the first quarter of fiscal 2020, compared with 41,874 dmt produced in the same period a year ago.
Meanwhile, the miner added that a customer had deferred shipment of 15,000 dmt until the first quarter in 2020.
While price pressures are expected to persist throughout the early part of 2020 due to excess stockpiles, Galaxy said the Chinese new energy vehicle sector is expected to stabilize and return to growth in 2020.