Liontown loss masks lift in Kathleen Valley sales

Alcoa and Aurizon (ASX: AZJ) will run a world-first trial on Alcoa’s Pinjarra–Kwinana rail route in WA, testing battery-electric technology to cut emissions from heavy rail operations.

Fortescue (ASX: FMG) has lifted its fully franked interim dividend to $.62/share after posting a strong first-half result, with record iron ore shipments, improved price realisations and lower unit costs driving higher earnings.The miner reported H1 FY26 revenue of about $11.86b (US$8.4b), up 10% on H1 FY25, while underlying EBITDA rose 23% to about $6.35b (US$4.5b) and attributable net profit after tax increased 23% to about $2.68b (US$1.9b).Fortescue said earnings were supported by higher sales volumes and a stronger Hematite realised price. Hematite realised price was US$90.87/dmt and Hematite C1 unit cost fell to US$18.64/wmt, down 3% from H1 FY25.Iron ore shipments reached a record 100.2mt for the half, up 3% year-on-year.Fortescue metals and operations chief executive Dino Otranto says this has been a standout first half.“We delivered record shipments of 100.2mt while keeping our people safe and costs low,” he said.“We have the lowest operating cost in the industry, and decarbonisation is pushing that even lower.“By removing diesel across our operations, we’re structurally improving our cost position. The more diesel we eliminate, the less exposure we have to price volatility, and the stronger and more predictable our margins become.“We’re now delivering decarbonisation at scale across the Pilbara. Around 3600 solar panels are being installed every day at our Cloudbreak mine, with another one gigawatt of solar in the immediate pipeline.“Construction is underway on our first wind farm, we’ve delivered two large battery energy storage systems at our sites, and we’re working with leading global manufacturers to roll out electric mining equipment, battery systems and large-scale renewable infrastructure.“A few years ago, this would have seemed ambitious. Today, it’s part of how we operate – and it’s lowering our cost base as we build it.”Fortescue’s board declared a fully franked interim dividend of $.62/share, up 24% on the FY25 interim dividend and representing a 65% payout of first-half NPAT.The company also saw strong cash generation, reporting net cash flow from operating activities of about $4.5b (US$3.2b) and free cash flow of about $2.1b (US$1.5b) for the half.Fortescue growth and energy chief executive Gus Pichot says the company continues to build a pipeline of projects to deliver the low-cost solutions the world needs.“Commercial discipline has underpinned solid progress across our global growth portfolio this half, including for our critical minerals and exploration strategy,” he said.“We expect to finalise shortly the acquisition of Alta Copper, strengthening our copper portfolio in Latin America. Subject to completion, our immediate focus will be on technical reviews, community engagement and advancing the studies required to inform future development decisions.“In Gabon, our teams have also further advanced studies at the Belinga iron ore project, and are progressing plans for an integrated mine, rail and port development.”FY26 guidance remains unchanged, including iron ore shipments of 195–205mt and Hematite C1 costs of US$17.50–US$18.50/wmt.

Liontown goes fully underground as lithium prices rally Liontown (ASX: LTR) has completed mining at the Kathleen’s Corner open pit, positioning Kathleen Valley as a fully underground mining operation.The annualised underground run-rate of 1mtpa was achieved on schedule, with Liontown now targeting 1.5mtpa by the end of Q3 FY26 and 2.8mtpa steady-state by the end of FY27.Liontown managing director and chief executive Tony Ottaviano comments on the company’s Q2 performance.“The December quarter represented a major operational and financial inflection point for Liontown, with open pit mining completed on schedule and the operation now 100% underground,” he said.“Underground ore production increased by 37% during the quarter, supported by strong development progress and improving operational leverage, resulting in cashflow-neutral operations.“Our US$900/dmt realised price for the quarter, on an SC6 equivalent basis, reflects the timing of offtake pricing, which was largely set prior to the strong rally in spodumene prices late in the quarter.“Pricing strength has continued into 2026, with market conditions now the most favourable experienced since the commencement of production.“With underground production continuing to scale, costs trending lower and higher pricing expected to flow through in coming quarters, Liontown is well positioned to deliver a strong financial performance in the second half of FY26.”Q2 unit operating costs and AISC decreased by 17% and 22% respectively from Q1. Liontown says it remains on track to meet FY26 guidance.Spodumene prices rallied late in the quarter and have remained firm into 2026, improving sentiment across the lithium sector. Now, LG Energy Solution has elected to convert its entire US$250m convertible note holding into an estimated 239 million fully paid ordinary shares in Liontown.“LG Energy Solution's decision to convert their entire holding to equity is a strong endorsement of Kathleen Valley's tier-one quality and our operational execution,” Mr Ottaviano said.“This conversion delivers immediate benefits to shareholders. It simplifies our capital structure, eliminates future interest obligations on the notes, and strengthens our balance sheet — giving us real financial firepower as we scale production, while remaining focused on shareholder returns and disciplined capital allocation.“Importantly, it deepens an already important strategic partnership with LG Energy Solution. LG Energy Solution was instrumental in supporting our transition to producer, and their decision to become a significant equity holder further aligns our interests.“We now have one of the world's leading battery manufacturers as both a cornerstone shareholder and a long-term offtake customer — a powerful combination as we execute on Liontown’s full potential.”Upon completion, LG Energy Solution will hold about 8% of Liontown’s issued share capital, with the shares to be issued within five business days.