US lithium producer Albemarle plans to reduce its annual costs by about $95 million, responding to changes in the lithium market and value chain.

The company announced the move Wednesday, noting that these cost reductions are primarily related to sales and administrative expenses. While Albemarle will also reduce its headcount and lower spending on contracted services, it did not say how many workers would be affected.

Per the company’s announcement, it expects to realise more than $50 million of these savings in 2024. Capital expenditures for 2024 are now expected to range between $1.6 billion and $1.8 billion, Kallanish reports, down from 2023’s capex of $2.1 billion.

“The actions we are taking allow us to advance near-term growth and preserve future opportunities as we navigate the dynamics of our key end-market,” says Albemarle ceo Kent Masters. “The long-term fundamentals for our business are strong and we remain committed to operating in a safe and sustainable manner.”

Lithium prices fell by roughly 80% in 2023, down from a record high in November 2022. In light of these changes, the North Carolina-based company says it will be re-focusing spending on larger, near-term projects.

For instance, Albemarle has decided to commission its lithium conversion facility in Meishan, China, which reached mechanical completion at the end of 2023. Similarly, the firm also intends to finish commissioning activities at a conversion facility in Kemerton, Western Australia.

Additionally, it will prioritise permitting activities at its 700-acre spodumene resource in Kings Mountain, North Carolina. As the company must submit several permit applications to federal, state and local agencies, this process could take years. However, Albemarle hopes to begin construction on the mine in late 2025.

To curb its expenditure, Albemarle will also defer spending on two US projects: the Richburg “mega-flex” facility in South Carolina, and the Albemarle Technology Park in North Carolina. The firm is said to be also looking to divest its 4% stake in Australia's Liontown Resources (see related story).

With these operational changes, the company expects to record a charge in Q1 2024. Full-year results for 2023 will be released on 15 February.