From Mining.com, January 31:
China’s Tianqi Lithium Corp., the
country’s top producer of the battery metal, is facing mounting pressure to
repay over $6 billion in debt that helped it finance an ambitious expansion
overseas in the past two years.
A collapse in prices for lithium, used in the batteries that power
electric vehicles (EVs) and high tech electronics, is mainly to blame,
and it has taken an unexpected toll on the miner and its rivals.
Albemarle (NYSE: ALB), the world’s No. 1 lithium producer, postponed in August plans to add about 125,000 tonnes of processing capacity. It also revised a deal to buy into Australia’s Mineral Resources’
(ASX: MIN) Wodgina lithium mine and said it would delay building 75,000
tonnes of processing capacity at Kemerton, also in Australia.
Chile’s Chemical and Mining Society (SQM), the world’s second largest producer of the metal, has also shown signs of distress, pushing back a key expansion at its Atacama salt flat operations from the end of 2020 to late 2021.
Canadian lithium miner Nemaska Lithium (TSX: NMX), which was backed by Japan’s SoftBank, filed for bankruptcy protection in December.
The main factor behind the price slump has been the avalanche of new supply that
has hit the sector over the past year, triggered mainly by mine
expansions and a cut in government subsidies for purchasers of EVs in
China, the world’s largest market.
While long-term prospects for lithium are positive, with demand for
the commodity expected to more than double by 2025, Tianqi has yet to
find a way to cover a $3.5 billion loan from state-owned Citic Bank,
$2.2 billion of which is due to be repaid in November.
The Chinese miner used most of the loan to buy almost a quarter of SQM in 2018. It also grabbed 51% of Australia’s largest lithium mine, Greenbushes, last year and completed a $400 million lithium hydroxide processing plant outside Perth....
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