Perhaps the best financial result — in terms of earnings — so far from the embattled lithium sector comes from Arcadium Lithium (ASX:LTM) (the end result of the merger between Livent of the US and Allkem of Australia and Argentina).
But even that hasn’t stopped the company from taking a bigger axe to its projects and costs, halting expansion plans like larger rivals such as Albemarle.
The company revealed a small, 5% drop in quarterly profit on Tuesday for the three months to June, due to weakening metal prices.
Arcadium posted second-quarter net income of $US85.7 million, compared to $US90.2 million a year ago.
And even though CEO Paul Graves described global lithium demand as “robust,” the company announced plans to expand its cost-cutting measures for the year.
The lithium company plans to pause investment in its Galaxy project in Canada and seek a partner for development.
Arcadium has also revised the timing of two lithium carbonate projects at Argentina’s Salar del Hombre Muerto. Rather than executing both simultaneously, the projects will now be completed sequentially.
These moves will cut Arcadium’s capital spending by an estimated $US500 million over the next two years, according to the earnings release.
The company said it has no plans to delay development of its Nemaska Lithium project in Canada.
While Arcadium still sees long-term demand for the metal intact, CEO Graves said in the release, “the market is clearly indicating that the industry does not need to add supply at the same pace as previously expected.”