The Liontown Resources Ltd (ASX: LTR) share price is taking a tumble on Thursday.
At the time of writing, the lithium developer's shares are down almost 8% to $2.47.
That's despite Liontown announcing a "significant milestone" this morning.
What's going on with the Liontown share price?
Investors have been selling down this ASX lithium share today amid further weakness in the price of the battery-making ingredient.
According to Fastmarkets, Chinese lithium prices have fallen again on thin buying appetite, whereas European and US lithium prices softened on slow summer demand.
This has put pressure on the whole industry, with the likes of Allkem Ltd (ASX: AKE) and Pilbara Minerals Ltd (ASX: PLS) dropping deep into the red today.
What was the significant milestone?
Failing to give the Liontown share price a boost was news that it has issued a letter of award to Byrnecut Australia. This is for the underground mining services, which will underpin the development and production of the Kathleen Valley Lithium Project.
Management notes that the appointment of Byrnecut is a significant milestone for the project. It highlights that Byrnecut is a tier one mining contractor with a demonstrable record and capability across the entire underground value chain.
The contract is the largest to be awarded by Liontown and provides the full suite of mining services for its underground operations to support initial plant throughput capacity of 3 Mtpa.
The fixed and variable contract is valued at approximately $1 billion over four years. Byrnecut will commit $125 million to procure new plant and equipment to execute the works.
Management commentary
Liontown's managing director and CEO, Tony Ottaviano, was pleased with the news. He said:
Today marks a significant milestone for Kathleen Valley as we have issued a letter of award for the Underground Mining Services contract to Byrnecut. Byrnecut is a Tier-1 underground mining services contractor with a global footprint. Its underground expertise is highly respected and well recognised throughout the mining industry and investment community, underpinned by the people they attract and retain. As part of the tender process, I was pleased to learn that around 400 people have worked for Byrnecut for 10 years or more. I believe this is evidence of a highly engaged and motivated team, which is vital to operating safely in an underground mining environment.
We remain on track for first production from Kathleen Valley by mid-2024 and I look forward to partnering with Byrnecut for the next stage of our project development.
