NYSE- and ASX-listed Arcadium Lithium – the company formed from the merger of equals between Livent and Alkem – has flagged a slowdown in the pace of its expansion plans in light of the current market conditions.

“While lithium and energy storage market dynamics have changed considerably since our merger announcement in May, the underlying merits of the transaction remain compelling,” president and CEO Paul Graves has said.

The all-stock merger, which was completed on January 4, should deliver synergy and cost savings of between $60-million and $80-million this year.

The combined company will increase lithium carbonate and lithium hydroxide volumes by about 40% in 2024 to between 50 000 t and 54 000 t on a lithium carbonate equivalent basis.  This is a result of lithium carbonate expansion ramp-ups at both Olaroz and Fénix (Salar del Hombre Muerto), in Argentina, as well as at downstream hydroxide assets globally. 

Offsetting some of this higher volume in 2024 is a reduction in planned spodumene production at Mt. Cattlin, in Australia, as part of cost optimization efforts at the mine, reflecting the lower price environment.

Arcadium explains that it is growing volumes significantly during 2024 as a result of previous multi-year expansionary investments.  However, in light of current market conditions, the company expects to lower near-term capital spending commitments as it evaluates ways to streamline its project pipeline while still delivering additional volumes within the timeframes needed by customers. 

"It is clear that very few lithium expansion projects make economic sense at current market prices, and the longer prices stay near these levels the greater the impact will be on future supply shortfalls.  As we saw in 2022, this will increase the likelihood of a rapid increase in future lithium prices, although the complexity of the global battery supply chain makes both the timing and extent of such an increase difficult to predict,” says Graves.

He stresses that one of the benefits of the merger is the opportunity to both optimise and de-risk growth projects that have natural overlaps. 

“By slowing capital spending in 2024 we are able to accelerate the work needed to drive capital efficiencies in both Argentina and Québec.  We expect this will ultimately help us realise lower overall capital spending across the Fénix and Sal de Vida projects, as well as between the James Bay and Nemaska Lithium projects. 

“We also expect to improve the operating flexibility of these closely located assets as a result of the revised plans."

Arcadium Lithium expects $450-million to $625-million in growth capital spending in 2024 with an additional $100-million to $125-million of maintenance capital spending.

As of December 31, 2023 Arcadium Lithium had a combined consolidated cash balance of $892-million and cash, net of debt, of $297-million.