Critical minerals whiplash
The crash in prices for metals that are crucial to the energy transition is testing the fortitude of Australian miners.
Even in the fast-moving realm of critical minerals, the pronounced whiplash from shortage fears to supply glut for some of the metals most crucial to the energy transition has been dramatic.
Lithium prices have plunged more than 80% from record highs in late 2022, and nickel more than 40%, amid a flurry of new production hitting the market just as electric vehicles sales growth slows in key markets like China. It’s already delaying projects and triggering a scramble for cash in Australia and across the mining world, despite the strategic imperative governments are placing on securing future supply.
Arguably no company encapsulates the sector’s rapidly shifting fortunes more than Liontown Resources. The lithium play, which acquired the rights to its Kathleen Valley tenement for a mere $500,000 in 2016, had looked set to cash out to American giant Albemarle’s $6.6 billion takeover offer, before Gina Rinehart swept in to play spoiler.
On Monday, Liontown said its lenders had withdrawn $760 million in debt funding due to the tanking spodumene prices. Its shares have retreated some 70% since the failed takeover bid. Albemarle, meanwhile, has curtailed its Australian expansion plans as part of a global austerity campaign.
