Lithium leader Albemarle cutting capex and jobs in 2024 to adjust to market conditions
18 January 2024
Leading supplier of lithium and lithium derivatives Albemarle is cutting its planned capex in 2024 from approximately $2.1 billion in 2023 to the range of $1.6 billion to $1.8?billion as the company adjusts to changing end-market conditions, particularly in the lithium value chain.
Morgan Stanley’s “ Best of Lithium Index” shows the drop in lithium prices in 2023 as supply outpaced demand.
This new level of spending reflects a re-phasing of larger projects in the near term to focus on those that are significantly progressed, near completion and in startup. Decisions made by the company include to:?
- Commission the Meishan lithium conversion facility, which reached mechanical completion at the end of 2023;?
- Complete commissioning activities for Trains 1 and 2 at the Kemerton lithium conversion facility and focus construction on Train 3;
- Prioritize permitting activities at the Kings Mountain spodumene resource and defer spending at the Richburg mega-flex lithium conversion facility;
- Defer investment for the Albemarle Technology Park in North Carolina; and
- Limit sustaining capital spending to the most critical health, safety, environmental, and site maintenance projects.
The actions we are taking allow us to advance near-term growth and preserve future opportunities as we navigate the dynamics of our key end-markets. The long-term fundamentals for our business are strong and we remain committed to operating in a safe and sustainable manner. As a market leader, Albemarle has access to world-class resources and industry-leading technology, along with a suite of organic projects to capture growth.?
—Albemarle CEO, Kent Masters
Albemarle is also planning actions to optimize its cost structure, reducing costs by approximately $95 million annually, primarily related to sales, general, and administrative expenses, including a reduction in headcount and lower spending on contracted services. Albemarle expects to realize more than $50 million of these cost savings in 2024 and to pursue additional cash management actions primarily related to working capital.?
Posted on 18 January 2024 in Batteries, Market Background, Materials, Mining
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