Arcadium Lithium jumps on pause in expansion plans, cost cuts

The news: Shares in Arcadium Lithium have jumped after the dual-listed lithium producer said it would defer two of its four current expansion projects and lifted its cost savings estimate.

The numbers: The ASX and NYSE-listed company posted a 5% drop in June quarter profit, with second-quarter net income of $85.7 million. It plans to expand its cost-cutting plans for the year, with cost savings now expected at the higher end of its USD60 to USD80 million guidance range. Arcadium also said it will reduce capital expenditure by USD500 million over the next 24 months, with spending deferred at two of its four projects.

Shares in Arcadium were up 8% at $4.34 in early trading on the ASX.

The context: The US lithium major said average realised pricing during the June quarter was higher for spodumene concentrate but lower across other lithium products. It is on course to increase lithium hydroxide and lithium carbonate sales volumes by 25% for 2024, and a similar proportion in 2025 on the back of already-completed expansions in Argentina. It now plans to pause investment in its Galaxy lithium project in Canada and the Salar del Hombre Muerto project in Argentina amid sliding prices for the metal used to make electric vehicle batteries.