Albemarle聽(NYSE: ALB) it would cut jobs and defer spending聽on projects, including a聽massive refinery project in South Carolina,聽as part of a wide-ranging plan to slash costs in light of falling lithium prices.
The world鈥檚 top producer of the battery metal said it plans to spend $1.6 billion to $1.8 鈥痓illion in 2024, down from about $2.1 billion it invested last year.
鈥淭he actions we are taking allow us to advance near-term growth and preserve future opportunities as we navigate the dynamics of our key end-markets,鈥� chief executive Kent Masters said in the statement. 鈥淭he long-term fundamentals for our business are strong and we remain committed to operating in a safe and sustainable manner.鈥濃��
The US-based lithium producer noted it would finish the commissioning of several lithium refineries in China and Australia, which are almost fully built. The company also said it would focused on securing the necessary permits to reopen its Kings Mountain lithium mine in North Carolina.
The asset contains one of the few known hard rock lithium deposits in the US. According to Albemarle, the operation would feed sufficient material for 50 kt LCE of conversion capacity and support the initially.
In all, Albemarle expects to save $95 million annually with the measures announced today, of which $50 million will come this year.
The number of people expected to be laid off because of these measures was not disclosed.聽
Supply of the battery metal over the past year outpaced demand, causing an oversupply that caused a collapse in prices last year.
While lithium prices vary by region and type,聽most indexes, including the one tracked by and Benchmark Mineral Intelligence, have dropped by more than 80% over the past year.聽
Experts expect prices for the lightweight material, key for making the batteries that power EVs and high-tech devices, to keep dropping.
Lithium carbonate on the Shangai Metals Market,聽 closing at 103,800 yuan per tonne or about $14,556 per tonne. This represents a nearly 11% price plunge over the past month alone.
Sale of Liontown鈥檚 stake
The lithium giant is also seeking to sell its stake in Australia鈥檚 Liontown Resources聽(ASX: LTR) after billionaire Gina Rinehart鈥檚 company Hancock Prospecting聽blocked in October its A$6.6 billion ($4.3bn at today鈥檚 rates) takeover bid.
Albemarle has priced the roughly 96 million shares it holds in the Australian lithium developer at around A$121 million in a block trade run by JPMorgan, a term sheet showed on Wednesday.
The offer price of A$1.26 to A$1.32 per share is a discount of 7.4%-2.9% to Liontown鈥檚 last traded price of A$1.36 on Wednesday. Shares had closed as high as A$3 in the days prior to Albemarle鈥檚 bid withdrawal.
Perth-based Liontown confirmed Albemarle鈥檚 intentions .聽 The company owns one of the most promising early-stage lithium projects in Australia, Kathleen Valley, located 680 km north-east of Perth in Western Australia鈥檚 premier mining district.
Kathleen Valley is considered one of the world鈥檚 largest and highest-grade hard rock lithium deposits with a mineral resource estimated at 156 million tonnes at 1.4% lithium oxide and 130ppm tantalum oxide.
The project, on track to begin commercial production聽, is forecast to initially produce around 500,000 tonnes a year of spodumene concentrate expanding to 700,000 tonnes annually in six years.
Liontown already has supply agreements with Tesla and Ford Motor, as well as with South Korean-based LG Energy Solution.
Hancock Prospecting is now the lithium junior鈥檚 largest shareholder with a 19.9% stake.聽
Rinehart owns shares in other lithium producers such as Patriot Battery Metals (ASX, TSX: PMT)聽and Delta Lithium聽(ASX: DLI), but the main focus of her investment is iron ore.