spot_img
Saturday, April 13, 2024

Slumping lithium prices, slowing EV demand bedevils mining companies

Two North Carolina companies that want to take advantage of the increasing popularity of electric vehicles by mining lithium for their batteries are cutting back due to a dramatic drop in the metal’s price.

Belmont-based Piedmont Lithium laid off 16 workers, or about a quarter of its staff, earlier this year as part of an effort to reduce expenses by $10 million anually. The company is working with a joint venture partner to improve productivity and cut costs at its lithium mine in Quebec. Piedmont Lithium also has a plant in Ghana where it hopes to receive permits by the end of this year, while it’s also exploring selling a 50% stake in the operation. Meanwhile, the company has deferred engineering expenses and other development costs at proposed mines in Tennessee and North Carolina. The potential mine in Gaston County, about 25 miles west of Charlotte, has drawn opposition from local residents and awaits approval from state officials.

Charlotte-based Albemarle delayed investment ona $1.3 billion lithium hydroxide refining plant in South Carolina that was expected to create more than 300 jobs and open in 2026. A $180 million research center in north Charlotte was also deferred indefinitely. The company has cut about 300 jobs and expects to reduce its annual costs by
$95 million.

The company is focusing on reopening a closed mine near Kings Mountain, one of the few places in the U.S. with abundant hard-rock lithium deposits.

Piedmont Lithium reported a $23 million profit in the third quarter, but its stock was trading in mid-February at about $15, well below its 52-week high of nearly $77. After trading as high as $293 in the past year, Albemarle is now trading 60% lower at $115 per share. In mid-February, it reported a 10% fourth-quarter revenue decrease to
$2.4 billion and a $617.7 million loss due to lower lithium
prices . It also said its lithium conversion facility in China was completed.

Decreased demand for EV cars and reports that the vehicles couldn’t access charging stations and lost battery power during cold weather have depressed lithium prices, says Hemali Rathnayake, a UNC Greensboro professor and co-founder of Minerva Lithium, which is developing mineral extraction processes. Lower gas prices also means consumers are less likely to switch to an EV.

“People kind of regretted buying an electric vehicle,” she notes. “But I see this as a bubble, and I hope it will come back. EV production needs are on hold, and the car prices are higher. So people don’t buy (electric vehicles) and go with a gas vehicle.”

The lithium price drop has also made it unprofitable for many mining companies to ship the mineral overseas to be refined before it can be used in EV batteries.

“We don’t have refining companies in the U.S.,” she says. “You have aluminum and sulfur and other minerals in the rock. The lithium you have is only 2% in those rocks. And that 2% lithium needs to be converted into lithium carbonate or lithium hydroxide” through refining.

Philadelphia-based Livent, which is a leading refiner, doubled its processing capacity at its Bessemer City processing plant last year. The plant can process about 15,000 metric tons of lithium hydroxide a year – enough to provide batteries for approximately 250,000 electric vehicles.

The price of lithium carbonate, the international benchmark, fell to $13,700 per ton on Feb. 2, according to Argus Media. That’s a decline of more than 80% from the end of 2022. Meanwhile,  lithium production increased 23% worldwide in 2023, according to the U.S. Geological Survey, making the mining business more competitive.

“The refining people are the ones making a lot of money,” says Rathnayake. “The mining people aren’t making as much money because they don’t refine.”

Chris Roush
Chris Roush
Chris Roush is executive editor of Business North Carolina. He can be reached at croush@businessnc.com.

Related Articles

TRENDING NOW

Newsletters