US' Arcadium Lithium halts projects owing to low prices

US-based Arcadium Lithium has become the latest lithium producer to delay new projects because of low prices, despite expectations that its sales volume will increase this year.

"The market today is clearly indicating to our industry that accelerating the delivery of additional supply is not what is needed if the market is going to be in balance," chief executive Paul Graves said.

"We have therefore decided to slow down the pace of our own expansion plans by pausing investment in two of our four current expansion projects."

The firm is pausing investment in its 40,000 t/yr lithium carbonate equivalent spodumene Galaxy project in Canada — formerly known as James Bay. And it will

begin production at its Fenix Phase 1B and Olaroz Stage 1 carbonate plants sequentially, rather than simultaneously.

The firm expects Fenix to be operating at its full capacity of 25,000 t/yr before the end of the year, while it expects Olaroz "to be well on its way" towards its nameplate production capacity of 10,000 t/yr "later in 2025", Graves said.

Arcadium expects its overall output to increase by 25pc this year, to 50,000-54,000t, on account of the additional production capacity it is bringing on line. This forecast is lower than the 40pc growth the company had predicted in February, as it expects "second half sales volumes to be fairly similar to the first half", chief financial officer Gilberto Antoniazzi said.

The firm is projecting 25pc growth in delivered volumes for next year, indicating it expects market conditions will remain challenging into the near future.

"We view longer-term lithium prices as heavily skewed to the upside from today's levels as there's limited ability for prices to move much further down", Graves said.

Arcadium is the result of a merger between Australian lithium producer Allkem and US chemicals giant Livent. It is one of many mining firms operating in Australia that are remaining positive despite low prices.

Arcadium last week bought Canada-based Li-Metal's lithium metals business for $11mn, including a pilot manufacturing plant in Ontario, Canada, in a bid to maximise its vertically integrated lithium operations.

The company's 30,000 t/yr of combined lithium hydroxide production expansions in the US, China and Japan are all "finalising qualification with key customers", Graves said.

By Chris Welch