Albemarle calls for government to take action to counter China's dominance in lithium market
(MENAFN) Albemarle, the leading global producer of lithium, is advocating for increased government intervention to address China's overwhelming control of the lithium market, crucial for electric vehicle (EV) batteries. Kent Masters, Albemarle's CEO, has highlighted the urgent need for greater support from both governments and automakers to mitigate the competitive threat posed by Chinese dominance. This call to action follows a significant downturn in the lithium market, a key material in the production of rechargeable batteries for electric and hybrid vehicles. Masters emphasized that, to establish viable Western supply chains for electric vehicles, decisive measures must be taken immediately.
The substantial drop in lithium prices, which have plummeted by over 80 percent to below USD12,000 per tonne since early 2023, has intensified the competitive pressure on both Western and Chinese firms. This price decline has been driven by a global slowdown in EV sales and an influx of new lithium supplies. Consequently, Albemarle, headquartered in North Carolina, has been forced to scale back its expansion plans. Masters expressed concern that US President Joe Biden’s climate legislation, specifically the Inflation Reduction Act, has not adequately addressed the West’s dependency on Chinese minerals. He pointed out that without significant market support and industry collaboration, the West risks falling behind in developing competitive supply chains.
In response to these challenges, Albemarle has recently implemented a second phase of cost-cutting measures, which includes shutting down a production line and halting the expansion of its lithium hydroxide refinery in Kemerton, Australia. This move is expected to result in a nearly USD1 billion write-down and the loss of 300 jobs. China currently processes 65 percent of the world's lithium supply, benefiting from lower construction costs, subsidies, and advanced technical expertise, according to Benchmark Mineral Intelligence. Albemarle’s struggles, including difficulties in finding skilled workers for its Kemerton operations, may prompt Western governments to take action to address these supply chain issues and support the development of alternative lithium sources.
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