Slow EV sales are proving problematic for Australia’s lithium miners

The price of lithium, a battery mineral crucial to the clean energy transition, fell 80% in 2023, with slow EV sales contributing to the decline.

EV sales

Mining companies are reducing production due to falling output, with Australia’s mining sector being particularly hard hit. The decline has led to job losses, budget strains and business disruptions at several major companies trying to protect their balance sheets.

“Lithium producers are cutting production due to lower-than-expected demand for electric vehicles,” said GlobalData analyst Isabel Al-Dhahir. “The slowdown in lithium mining has been particularly pronounced in Australia, the world’s largest lithium producer.

“Decisions by companies such as Albemarle, Core Lithium and Liontown to reduce production and cease operations at some plants will have negative consequences. Investment in Australia’s mining industry is likely to suffer a setback, with production levels falling below profitability thresholds. The company could be in trouble.”

Impact of lithium prices on Australian mining industry

Core Lithium said in its quarterly report that it would cut “some positions,” while Albemarle said it would reduce program expenses and costs. Meanwhile, Pilbara Minerals said in a quarterly report that it would reduce annual exploration spending by up to A$100 million ($66 million) and was unlikely to pay a dividend for the half-year ended on Dec. 31.

The difficulties faced by the industry led the International Association for Measurement and Evaluation of Communications (AMEC) to recently recommend that the government defer all royalties, reform the environmental licensing process and fund shared infrastructure.

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