North Carolina’s battery metal giant Albemarle Corporation (NYSE: ALB) announced a series of financial optimization measures Wednesday amid a continual decline in the price of lithium.
The company says it will spend between US$500 million and US$300 million less on its operations this year than it did in 2023. Albemarle stated in a news release that “a reduction in headcount and lower spending on contracted services” was on the horizon this year. The company anticipates that the new moves will save about US$95 million annually in the long term.
The price of lithium carbonate has dropped by about US$9,500 per metric ton (MT) in the past three months, according to S&P Global (NYSE: SPGI). It is currently worth approximately US$14,500 per MT. Benchmark Mineral Intelligence says the price of lithium has dropped by 81 per cent in the past year and 11 per cent in the past month alone.
Albemarle also announced that it plans to sell its 96 million shares of Liontown Resources Limited (ASX: LTR). The company made an unsuccessful takeover bid for Liontown in October last year and now wants out completely. A term sheet showed that Albemarle was seeking C$107.1 million for its entire holding in the Australian lithium company.
“The 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,” Albemarle CEO Kent Masters said. Albemarle’s stock has dropped by nearly 50 per cent in the past 13 months on the New York Stock Exchange.
@AlbemarleCorp slowing down expansion projects, particularly USA developments.
To a certain extend this makes sense, considering that IRA compliant lithium chemicals will be produced in sufficient quantity in Australia, Chile and Korea.
Yet, Albemarle needs to increase its Li… pic.twitter.com/QYV5KXlHLf— Daniel Jimenez Sch (@D_Jimenez_Sch) January 17, 2024
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Kings Mountain a top priority for Albemarle
Albemarle says it will decrease investments toward its Technology Park in North Carolina while prioritizing permitting activities at the Kings Mountain spodumene operation in the state.
The Technology Park in Charlotte is a lithium research facility that the company agreed to invest US$180 million in at the end of 2022. The company said then that its campus would be complete by late 2026, but that date may be pushed back.
Albemarle received US$90 million from the United States Department of Defense in September last year that it put toward the restart of Kings Mountain and new equipment.
Earlier this week, a protest blocking access to Albemarle’s lithium mining operations in Chile came to an end. Local Indigenous groups were unhappy with a new contract between state-run copper miner Codelco and Sociedad Químicay Minera de Chile (SQM) (NYSE: SQM). They felt they were not adequately consulted on the matter.
Chile’s lithium industry is primarily controlled by the state. Many lithium companies have turned to Argentina as an alternative due to less restrictive mining policies.
Junior lithium explorers in Argentina include Argentina Lithium & Energy Corp. (TSX-V: LIT) (OTCQX: LILIF), Lithium South Development Corporation (TSX-V: LIS) (OTCQB: LISMF) (Frankfurt: OGPQ) and Recharge Resources Ltd. (CSE: RR) (OTC: RECHF).
Lithium South Development Corporation is a sponsor of Mugglehead news coverage
rowan@mugglehead.com
