US mining company Albemarle, one of the world’s leading suppliers of lithium from mines in Western Australia and North America, has abandoned expansion plans in Western Australia.
The decision to postpone or reject the increase in production to about 100,000 tons of lithium hydroxide was based on a recorded loss of $1.1 billion for the whole group in the third quarter of 2024, on sales of $1.4 billion for the period.
The lithium hydroxide processing plant is at Kemerton, close to Perth.
Despite the negative outcome, Kent Masters, Albemarle’s chairman and CEO, said: “Our steadfast focus on execution allowed us to deliver solid third-quarter results and maintain our full-year 2024 corporate outlook considerations as cost improvements, higher volumes, and the performance of our long-term contracts offset lower market pricing.
“We have identified significant opportunities to reduce cost, improve productivity and decrease capital spending while ensuring we efficiently serve customers and our end-markets.”
As part of the review to optimise its network, Albemarle said it will stop construction activities at Train 3, idle production at Train 2 and place the unit in care and maintenance. The focus will be on manufacturing efforts on the continued ramp and qualification of the Train 1 production line.
Analysts said the abandoned processing materials at Kemerton reflected a difficult year in the lithium market with oversupply and lower-than-expected electric vehicle uptake. This saw lithium prices drop, leaving few players unscathed. Australian news network ABC News reported port records showing more than 23,700 tonnes of steel modules and equipment were shipped in from China for the project.
Other lithium companies, Arcadium Lithium, Pilbara Minerals and Liontown Resources have announced pauses or reductions in operations in Western Australia. Lithium analyst Romano Sala Tenna told ABC News that it cast doubt over whether Western Australia, and Australia more broadly, had a future in lithium processing.
Albemarle spokesperson Peter Smolowitz told BEST: “Kemerton Train 1 is performing to expectations. As previously disclosed, Train 2’s return to operations will depend on market conditions improving. Australia is and will remain an important pillar in our global portfolio.”
Photo: Kemerton expansion. Albemarle