Monadelphous shares fall as Albemarle halts lithium production at Kemerton
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The news: Shares in engineering group Monadelphous tumbled on the ASX after global lithium miner Albemarle terminated its contract at the Kemerton project in Western Australia.
The numbers: Monadelphous shares were down 5% to $12.33 by 12:20pm AEST.
The group estimates that its contracted construction works on the project are currently 15% to 20% complete, and the termination of the contract reduces the company's current construction work-in-hand by approximately $200 million.
The context: Monadelpous said it had been notified this morning that its contracts at Albemarle's Kemerton project have been "terminated for convenience by Albermale".
The termination follows Albemarle's recent announcement that it will undergo a "comprehensive review" of its asset and cost structure amid tumbling lithium prices globally.
Monadelphous was contracted to construct the front-end pyromet works associated with two new lithium processing trains and a multidisciplinary package for the utilities and reagents scope.
The company said it has been formally notified that the termination of the construction contracts will take effect on and from 12 September. Ambemarle has also terminated Monadelphous' maintenance services and sustaining capital projects contracts, it said.
What they said: Albemarle chair and CEO Kent Masters said: "Given the dynamics of the global markets we serve, we must be able to pivot and pace as necessary to maintain our leading position".
The sources: ASX announcement, Albemarle media release
