Battery Metal Price Plunge Is Closing Mines and Stalling Deals – by Thomas Biesheuvel (Bloomberg News – January 2024)

(Bloomberg) — A meltdown in some of the most-hyped energy-transition metals is wreaking havoc across the mining world, stalling projects, scuppering deals and triggering a scramble for cash that promises to reverberate through the industry for years.

Lithium — the ultra-light metal used in electric-vehicle batteries — has plunged more than 80% from a late-2022 record, as the market whiplashed from shortage fears to a mountain of surplus inventories. Nickel and cobalt have also tumbled, weighed down by an influx of new production amid concerns that the shift to EVs may not be as smooth and quick as predicted.

It’s a dramatic reversal from the ebullience of recent years that sent prices soaring and sparked a rush by some of the auto industry’s biggest players to secure future supply. Now, several carmakers are getting cold feet and abandoning deal discussions, according to mining investment bankers and industry executives.

The low prices are making it harder for mine builders to raise money from more traditional sources as well, at a time when the industry is also grappling with rampant inflation driving up the cost to build new projects.

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