It wasn’t that long ago that newsfeeds were full of announcements of lithium mine cutbacks or closures and the deferment of downstream plans as EV sales didn’t grow at breakneck speeds and the price of lithium returned back to earth. Investors ran for the hills as lithium company share prices followed suit and retreated from lofty highs.
With many car companies nearly fully committed to the electrification of their offering (regardless of Donald Trump’s musings), lithium bulls insisted that the weakness would be short lived and solid increases in demand were just around the corner.
Judging by just the first few weeks of 2025, might they be right? Following the money trail tends to lend to the argument. Whilst the lithium price movements in the past month haven’t set the world on fire, some corporate actions by the big players could foreshadow change in the air.
Rio Tinto’s US$6.7 billion takeover of Arcadium Lithium is expected to complete in the first half of 2025, with a new division, Rio Tinto Lithium, to be created for the Arcadium and Rincon assets, to be managed by Arcadium CEO, Paul Graves.
Pilbara Minerals $560 million Scheme of Arrangement with Latin Resources, owner of the Salinas Lithium Project in Brazil, caught some analysts off guard when announced. However, this deal has now been approved by both shareholders and the Supreme Court of WA and will be closing soon.
In November, Sayona and Piedmont Lithium announced a ‘merger of equals’ bringing together their North American lithium businesses into a $623 million deal under the Sayona banner. Investors liked it, tipping in US$99 million in an associated capital raising.
Ioneer appears to have timed its run perfectly, closing a US$996 million loan with the US Department of Energy just prior to the changes in the White House. The construction ready project is awaiting an investment decision by proposed JV partner, Sibanye-Stillwater, on US$490 million in equity financing before a final investment decision on the Rhyolite Ridge Lithium-Boron Project in Nevada.
Also announced this week, Patriot Battery Metals closed the C$69 million Strategic Investment with top global car manufacturer, the Volkswagen Group.
On the production front, Liontown Resources, previously in Albermarle’s sights with a $3 a share takeover, reported its first net positive operating cashflow from Kathleen Valley of A$16.7 million for the December quarter, as it works to build production and lower costs over the next six months.
Not everyone is feeling the love though. IGO is looking at an impairment of its Kwinana lithium hydroxide plant as product stockpiles grow and cost pressures make it a challenge to generate cash.
Time will tell whether the corporate actions were well timed, however there are now several quality projects sitting in well capitalised entities that have the capacity to move quickly as prices rebound.
Photo by Priscilla Du Preez 🇨🇦 on Unsplash