Lithium miners sound alarm as EV struggles pile on pressure

A slew of corporate reports from Australian lithium producers has thrown a fresh spotlight this week on an industry riven by write-downs, cost controls and hard choices as the world’s electric-vehicle transition runs into headwinds.

 

 

IGO Ltd. and Mineral Resources Ltd. flagged potential impairments, Pilbara Minerals Ltd. stressed cost-cutting efforts, and Liontown Resources Ltd. said it had to resell some material originally earmarked as offtake for Ford Motor Co.

 

“I don’t think there’s anyone globally making much in the way of margins there or enjoying the period we’re in,” IGO’s chief executive officer Ivan Vella said on an investor call Wednesday.

 

The global lithium market has been in turmoil for years, and now slower-than-expected growth in EV demand has been compounded by US President Donald Trump pulling in regulatory backing. Prices of the battery metal hit a record in 2022 but have since collapsed by nearly 90% amid a deep supply glut.

 

Liontown said Tuesday that “a portion” of its supplies to Ford were redirected to a Chinese buyer, in a sign of how challenges in the US are rippling through the supply chain. The American carmaker’s EV sales plunged in the second quarter, and the firm is overhauling its strategy.

 

“The reality is the EV landscape has changed materially over the last few years, and we saw an opportunity for us to place these tons on behalf of Ford with another customer who wanted the product,” Liontown’s chief commercial officer Grant Donald told investors Tuesday.

 

Lithium investors have been watching events in China closely over the past week, as speculation on production cuts fuels a spike in futures prices and big share gains for Chinese lithium firms. But there’s so far been little evidence of major cuts there.

 

Current lithium prices are “unsustainable” given the need to incentivize new supply to meet demand growth in the coming decade, Rio Tinto Group said in slides issued with its half-year report. 

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