US-based lithium producer Albemarle is set to cut jobs and postpone certain investment plans in a bid to lower costs and optimise cash flow.
The move comes amidst evolving market conditions in the lithium value chain.
Amid this backdrop, the company has revised its 2024 capital expenditure forecast to $1.6–1.8bn, a decrease from $2.1bn in 2023.
The recalibration of spending priorities will concentrate on projects that are nearing completion or are in the start-up phase.
Albemarle plans to commission its Meishan lithium conversion facility, which achieved mechanical completion last year.
It will also focus on commissioning Trains 1 and 2 at the Kemerton lithium conversion facility and advancing construction on Train 3.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
In addition, Albemarle is prioritising permitting the Kings Mountain spodumene resource while deferring expenditure at the Richburg mega-flex lithium conversion facility in South Carolina.
The company has also decided to postpone investment in the Albemarle Technology Park in North Carolina and will restrict sustaining capex to essential projects related to health, safety, environmental and site maintenance.
To further optimise its financial position, Albemarle is implementing cost reduction measures expected to save around $95m annually. These savings will predominantly come from cuts in sales, general and administrative expenses.
It also anticipates realising more than $50m of these cost savings in 2024.
Additionally, Albemarle is exploring further cash management strategies, mainly concerning working capital, to bolster its financial standing in the dynamic lithium market.
Albemarle CEO Kent Masters said: “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.”