Liontown kicks off production at Australia’s first underground lithium mine

Liontown Resources (ASX: LTR) has kicked off production at what is Australia’s first underground lithium mine at Kathleen Valley, nearly a year after starting production from its two open pits.

In a press release Wednesday, the Australian miner said the successful start of underground production stoping from the Mt Mann orebody is a “key milestone” in the transition from open pit to underground operations.

The company, backed by Australian billionaire Gina Rinehart, first began open-pit mining at Kathleen Valley in July 2024, with the aim of eventually transitioning to an underground-only operation by the end of 2026 financial year.

The first stope firing extracted roughly 1,500 tonnes of ore, part of an initial stope designed to extract 12,000 tonnes — equivalent to two days of plant production.

According to Liontown, the underground mine is expected to offer distinct advantages over traditional open-pit operations, including reduced dilution and waste contamination, higher lithium recoveries, and improved ore fragmentation for more efficient processing.

The company, backed by Australian billionaire Gina Rinehart, first began open-pit mining at Kathleen Valley in July 2024

In March, the company conducted trials to confirm the treatability of underground ore, with a head grade of approximately 1.5% lithium oxide and recoveries exceeding 70%. Further optimization is expected through recovery improvement projects, it noted, targeting a recovery of 78% across the life of mine.

Liontown CEO Tony Ottaviano said the trials “delivered results in line with our study work, which reinforces our confidence in transitioning to full underground operations.”

Moving forward, the company will remain focused on advancing the underground decline, opening additional working areas and ramping up mining activity. As previously stated, it aims for the mill to be supplied solely from underground ore and stockpiles by the fourth quarter of FY2026.

The Kathleen Valley operations have been optimized to an initial capacity of 2.8 million tonnes per annum to produce approximately 500,000 tonnes of spodumene concentrate a year. A 4-million-tonne-per-annum expansion is planned in year 6, which is expected to deliver approximately 700,000 tonnes of spodumene concentrate. Its estimated mine life is 23 years.

Liontown currently has offtake agreements with LG Energy Solution, Tesla and Ford, all for initial terms of five years.