A recent slowdown in electric vehicle (EV) sales growth in the U.S. and China has also halted EV battery metal production, The Wall Street Journal reports.
Albemarle, a Charlotte, N.C.-based lithium company announced plans last year for a $1.3 billion plant to process various lithium sources, including recycled batteries, in order to supply the mineral for South Carolina’s then growing EV industry. A severe drop in battery metal prices due to sagging EV sales growth put the project on hold.
Albemarle isn’t alone, however. Lithium and nickel producers have been stopping projects and closing mines because of the sudden price decreases. Lithium prices have fallen as much as 90 percent since the beginning of 2023, while nickel prices have been cut in half.
Meanwhile, Swiss mining and trading company Glencore recently announced it would suspend production at an unprofitable nickel mine and processing plant in New Caledonia, a French island group in the Pacific that currently provides more than 6 percent of the world’s nickel supply, The Wall Street Journal reports. Glencore is looking for a buyer to acquire its stake in the mine, due to high operating costs and a weak market, the company said.
BHP Group, the world’s largest miner by market value, which has supply deals with Tesla and Ford, also said it might need to pause its Australian nickel business for an undetermined amount of time as it does not foresee a fast market recovery.
Now there are more metals than are needed because producers took on a number of new projects to meet the global EV industry’s demand. This comes at a time when car manufacturers such as Ford, General Motors and Volvo are delaying investments are taking a more cautious approach when it comes EV customer demand.
Chances for an EV battery metal market rebound
Customers are still buying EVs, but purchases aren’t happening as quickly as initially predicted. Car companies have an opportunity to boost sales as metal prices fall, however. Less expensive metals could allow EV manufacturers to entice buyers with cheaper models and discounts. If sales rebound too quickly, however there might not be enough metals for EV batteries to keep up with the demand.
That’s why many large suppliers in the lithium industry want to pause upcoming projects rather than stop existing operations, according to The Wall Street Journal. Unfortunately for the nickel industry, miners have said they had no choice but to shutter unprofitable mines that can’t compete with cheap Indonesian exports. The shift has eliminated more than 20 percent of Australia’s mine supply, with more closings to come, per Benchmark Mineral Intelligence.
Nickel miners might get a reprieve, however as Australian officials recently designated nickel as a critical material, which would let companies apply for government grants.
“Everyone was so excited because (nickel) had found a home (in batteries needed for the EV boom”,” Peter Craig, who runs a contracting business that offers garbage removal and other services from an Australian nickel-mining town told The Wall Street Journal. “We thought, here’s the future for nickel for the next 25 years. But, you know, nobody can predict these things.”
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