Albemarle said it is finished with the lithium buy-up frenzy following its decision not to go ahead with its $6.6 billion Liontown acquisition last month.
“We will still look at mergers and acquisitions, but it’s not going to be at the same scale that we were, frankly, looking at six months ago,” Albemarle chief executive officer and chairman Kent Masters said, as reported by the Australian Financial Review.
Albemarle ended its bid for Liontown after Gina Rinehart’s Hancock Prospecting acquired a 19.9 per cent stake in the company, but Albemarle cited the downward trend in lithium prices as the main reason for its withdrawal.
As the lithium price slump continues, Albemarle confirmed that it is considering scaling down production at the Greenbushes mine in Western Australia.
Owned in partnership with Tianqi and IGO Limited, Greenbushes is Australia’s largest hard rock lithium mine, producing 1.49 million tonnes of spodumene concentrate in the 2022–23 financial year.
The AFR reported that battery manufacturers and carmakers including LG Energy Solution, General Motors and Honda have cut back electric vehicle growth targets in the past month, raising concerns of an oversupply of lithium.
“In this softer market, we are taking a hard look at the level of our capital expenditure spending and the sequence of our projects,” Albemarle chief financial officer Scott Tozier said.
Tozier emphasised there had been “productive engagement with Liontown and as we learned more, we decided that moving forward with the acquisition at this time was not in Albemarle’s best interest”.
“We continue to evaluate a broad range of M&A opportunities. However, in the current environment, the scale of those opportunities are not as big.”
Albemarle warned low prices could have implications for the whole sector, citing China’s slowing or halting operations.
While the company is considering a scale-back at Greenbushes, the AFR said it did not discuss whether that would extend to its Wodgina lithium mine in WA that it owns in partnership with Mineral Resources.
Subscribe to Australian Mining and receive the latest news on product announcements, industry developments, commodities and more.