Albemarle Corporation (NYSE: ALB) has announced major operational changes at its Kemerton lithium hydroxide processing plant near Bunbury. The US-based company will halt construction of the third production train and place the second train into care and maintenance, focusing instead on optimizing output from the first train.
This decision is expected to result in approximately 300 job losses, with Albemarle retaining around 460 employees at the Kemerton facility. The company will also record an impairment on the asset ranging between US$900 million and US$1.1 billion, following a previous write-off of US$215 million earlier this year.
Albemarle attributes these changes to current market conditions, citing depressed lithium prices that are expected to persist. The company’s spokesperson emphasized that the decision was not influenced by government policies but rather by commercial realities in the lithium market.
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The announcement comes amid broader challenges in the critical minerals sector, with Federal Resources Minister Madeleine King noting an 80% decline in lithium hydroxide prices over the past year. King highlighted the importance of policy support for Australia’s critical minerals sector, referencing the government’s planned 10% critical minerals production tax incentive set to begin in mid-2027.
This development at Kemerton underscores the volatility in the global lithium market, which has seen significant price fluctuations. It also raises questions about the future of lithium processing in Australia, as most of the world’s lithium hydroxide plants are currently based in China.
Albemarle’s decision is part of a global cost-cutting initiative as the company grapples with financial pressures. In the June quarter, Albemarle reported a loss of US$188 million. The company’s CEO, Kent Masters, stated that these actions at Kemerton are necessary to maintain Albemarle’s competitive position and ensure agility in current and future operations.
Information for this story was found via The West Australian, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
