Albemarle to idle lithium hydroxide plant in Western Australia

Albemarle (NYSE: ALB) says it will idle the remaining operating train at its Kemerton lithium hydroxide processing plant in Western Australia and place it into care and maintenance, effective immediately.

The news follows actions in July 2024 to place Train 2 operations into care and maintenance and to cease expansion plans for Trains 3 and 4, part of a broader strategy to reduce costs amid weak lithium prices.

The Kemerton plant processes spodumene from Greenbushes, the world’s biggest hard-rock lithium mine. Albemarle holds ownership interest and half of the offtake rights from Greenbushes through an Australian joint venture.

Kemerton, with its proven technology and commercial scale lithium hydroxide production, was built to enable the development of a Western lithium supply chain, said Albemarle, currently the world’s largest producer of lithium.

“Idling operations at Kemerton was a difficult decision. It follows significant actions we have taken over the past two and a half years to reduce operating costs during an extended period of price volatility in the market,” Albemarle’s CEO Kent Masters said in a news release on Wednesday.

“Unfortunately, recent lithium price improvements alone are not enough to offset the challenges facing Western hard-rock lithium conversion operations,” Masters continued. “This decision improves our financial flexibility and preserves optionality.”

The decision is expected to be accretive to adjusted EBITDA beginning in the second quarter of 2026 with no impact to projected 2026 volumes, Albemarle said, adding that it will meet customer demand for lithium hydroxide through other production channels.

Albemarle’s mining interests in Australia, including Greenbushes and Wodgina, are not expected to be impacted by the decision as they remain core components of the company’s strategy, it added.