The company said in a press release that it will halt Stage 4A waste stripping, as well as any expansionary investment beyond Stage 3 following a sustained drop in spodumene prices.
Data from S&P Global Commodity Insights shows prices are now at the US$720 level.
The sharp drop has primarily been attributed to oversupply and reduced demand for electric vehicles.
“Production at Mt Cattlin beyond the current stage of the open pit cannot be justified in the current price environment for spodumene,” said Arcadium CEO Paul Graves. “We will maintain open and transparent dialogue with all of our stakeholders while supporting our employees and communities in Western Australia during this transition period.”
Romano Sala Tenna, portfolio manager at Katana Asset Management, told the news outlet that while the suspension of Mount Cattlin is expected to support lithium prices, there will be a delay before any significant impact is felt.
“There will be a lag because there are healthy stockpiles at the mines and in China on the docks,” he said.
Other lithium companies are also adjusting their strategies in response to the price drop.
The firm said it would pause investment in its Galaxy spodumene project in Canada, and would look at bringing in a partner to provide capital. It also said it would revisit the sequencing of its lithium carbonate projects in Argentina’s Salar del Hombre Muerto. These moves are expected to cut capital spending by US$500 million over 24 months.
The company will provide further insight on its strategy and market outlook on its Investor Day on September 19.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
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