Piedmont Lithium has big plans for sites in North Carolina, Tennessee, Canada and Ghana, but industry headwinds are causing major changes at the startup company.
Last week, Piedmont Lithium announced it is scrapping its proposed lithium hydroxide processing facility in Etowah, Tennessee, 60 miles north of Chattanooga. The operations, which were supposed to open next year, will now be incorporated into the company’s proposed Carolina Lithium project, covering a 1,548-acre tract in Gaston County, 30 miles west of Charlotte.
“Given the prevailing market realities, we made the decision to consolidate our planned lithium hydroxide production capacity in Tennessee into a second train in North Carolina to deploy capital and technical resources more efficiently and ensure Piedmont Lithium’s long-term competitive position,” Erin Sanders, the company’s senior vice president of corporate communications and investor relations, told Business North Carolina.
Piedmont submitted its application for the N.C. mine on Aug. 30, 2021, then received state approval last past April. The N.C. mine now hopes to be open by 2027, officials say.
The N.C. operation is expected to produce 60,000 metric tons of lithium hydroxide annually when running at full steam. That’s triple the current U.S. production level, Sanders says.
But local opposition continues to mount against the mine. At the time of the state ruling, Gaston County Commissioner Chair Chad Brown said, “This will be one of the biggest economic development projects that has ever been brought to Gaston County. Now we have to figure out what will be the best inclinations for our community.”
Piedmont Lithium has not yet requested a zoning change from Gaston County commissioners, which the company needs to move forward, say Brown. Because the seven-member board will have two new members, and possibly a third, after November’s election, Brown says the zoning matter will not come up until at least December.
“I didn’t think it was fair to them for two different boards to hear two separate requests,” says Brown. Piedmont Lithium needs commissioners to approve a zoning change and a land-use requirement before it can move forward, and both can’t happen before November, he says.
Why pull out of Tennessee? The answer appears to lie in the plummeting lithium stock prices stemming from a global oversupply and slower-than-expected demand for the electric vehicles that rely on lithium-ion batteries. The industry’s problems include China, where a slowing economy has depressed EV sales, according to CarbonCredits.com.
Lithium carbonate prices peaked at more than $80,000 per ton in November 2022. Since then, the price has slumped to less than $13,000 per ton. That includes a 15% decline over the past month.
This steady decrease in lithium stock prices has affected the entire industry, including the largest U.S. lithium miner, Charlotte-based Albemarle Corp. Its share have slumped nearly 70% over the past year, and it has announced plans for major cost-cutting and project delays.
Earlier this year, Piedmont laid off about 27% of its workforce, or about 16 workers, as a part of an effort to cut $10 million of annual costs. The company, which is based in Belmont in Gaston County, reported a net loss of $13.3 million during the second quarter. For the first half of the year, it lost $36.9 million, compared with a $19.3 million loss in the same period last year. Revenue totaled $26.6 million, during the first half, after reporting no revenue a year earlier.
As of June 30, Piedmont reported long-term debt of $2 million, while it had cash and other current assets of about $84 million. Stockholders equity is nearly $300 million.
Shares of Piedmont closed Monday at $8.49, up more than 14%. Shares have traded between $6.93 and $46.66 in the past year. The market cap is about $162 million, down from more than $1 billion at peak levels.
Located within both the renowned Carolina Tin-Spodumene Belt, or “America’s Battery Belt,” the N.C. project is being designed as an integrated mining, spodumene concentrate and lithium hydroxide manufacturing operation.