Battery materials firm Albemarle is due to idle portions of its lithium mine and production facility in the US due to short-term supply-demand imbalances and an excess stockpile of battery-grade lithium.
The North Carolina-headquartered firm’s Silver Peak lithium mine in Nevada and Kings Mountain lithium hydroxide production facility in North Carolina are due to partially close next month until the end of the year.
A company statement said: “While we are temporarily idling the carbonate production unit at Silver Peak and the lithium hydroxide unit at Kings Mountain in response to short-term supply and demand imbalances and excess inventory builds in the battery grade channel, we are committed to the long term operation of these facilities, and we are committed to keeping our stakeholders informed about this decision.
“We currently expect to resume production in early 2021.”
The decision to idle some of the facilities came as the company’s second quarter net sales fell 14% to $764 million (compared to £885 million last year) due to lower market prices and battery-grade lithium contract prices.
In an investors report, the company stated it expects the ‘impact of low OEM automotive production to be felt more acutely in Q3 2020’ in part due to higher inventory in the battery supply chain.
The company also expects Q3 performance to be lower year-on-year based on ‘global activity due to global pandemic’ and expects Q3 EBITDA (earnings before tax, depreciation and amortization) to be down about 10% to 20% compared to Q2 2020.
Albemarle CEO Kent Masters, said: “While our strategy has not materially changed, the environment in which we operate has changed dramatically. Our response must be to focus on operational discipline in terms of manufacturing, business, and capital project excellence.”
Albemarle’s lithium production capacity at its La Negra lithium carbonate plant in Chile is due to be expanded to an annual capacity of more than 80,000mt from 44,000mt.
The company’s Kemerton lithium hydroxide plant in Australia is expected to come online at the end of next year, pending market conditions and price recovery, with an initial annual capacity of 50,000mt— with capability to expand to 100,000 metric tonnes.