The world’s largest lithium company continues to reel from last year’s massive price drop. On Wednesday, January 17th, Albemarle announced that lower lithium prices have forced them to put the construction of a new refinery in South Carolina – one that would have been one of the world’s biggest – onto the back burner, while substantially decreasing its workforce.
Albemarle stocks traded on the New York Stock Exchange (NYSE) also dropped by 2.8%, settling at $122.44 on Wednesday morning. This is a sobering development as company stocks have lost around half their value over the past year.
As of press time, Albemarle will be reducing its capital spending for this year from last year’s $2.1 billion to somewhere between $1.6 and $1.8 billion. About downsizing its staff, company officials remain mum as to the total number who will be affected; however, the company expects to save up to $95 million a year following layoffs.
It should be noted that recent company statements made no mention of its plans for the use of direct lithium extraction (DLE) technology at its Arkansas facility. However, recent events have not adversely affected nearly completed refineries in Australia and China whose commissioning will push through.
What’s Going On?
This recent spate of budgetary cuts may be attributed to the way an oversupply of lithium on the global market has significantly driven down the vital element’s price. Indeed, the Benchmark Mineral Intelligence index dropped by as much as 81% in 2023 and up to 11% just last month.
However, Albemarle’s budget tightening is also the result of recent protests in Chile’s Atacama region which have prevented company workers from accessing primary production facilities. The company has since declared that operations are still ongoing, though it has ramped up measures related to the safety of its employees.