Piedmont Lithium’s Plan of Action: Navigating Market Struggles
By: Grace Smith – Wise News Network
BELMONT, NC (WNN) – Amidst market uncertainties, Piedmont Lithium revealed its financial results for Q4 2023 and the full year. Despite challenges and less-than-ideal trends in the lithium market throughout the year, Piedmont remains hopeful about its future projects.
According to a press release, in 2023 Piedmont achieved a milestone with the commencement of operations at North American Lithium (NAL) in Quebec, a joint venture with Sayona Mining. This marked the company’s first-ever revenue generation.
NAL is currently the largest lithium operation in North America. In 2023, NAL produced approximately 34,200 dry metric tons (DMT) of lithium. Approximately 14,000 dmt were sold to Piedmont.
In the press release, Piedmont’s CEO, Keith Philips, expressed confidence about NAL’s long-term prospects despite challenges in the lithium market in 2023.
“We are pleased with the production ramp-up and prospects for long-term operations at NAL; however, our 2023 financial results were adversely impacted by the sharp downturn in lithium prices that occurred during the year and into 2024.” said Philips.ย
Piedmont wants to move to long-term customer agreements, diverting from short-term spot sales agreements. This change is meant to make Piedmont’s income more predictable by lessening its exposure to market fluctuations.
“We plan to shift our off take volumes towards our multi-year customer contracts and reduce shipment volumes under spot sales agreements. We expect this strategy to result in less volatility and higher average realized prices.” stated the press release.ย
Although NAL is Piedmont’s first revenue-producing venture, the company is confident in its overall project portfolio. Piedmont and Atlantic Lithium partnered together to open Ghana’s first lithium mine with the Ewoyaa Lithium Project.ย
In October 2023, the Ghanaian government approved Atlantic Lithium’s project with a 15-year mining lease. Subsequently, in January 2024, Ghana’s sovereign wealth fund, the Minerals Income Investment Fund, invested $5 million in Atlantic Lithium through a subscription of common stock.
This means that the sovereign wealth fund received Atlantic Lithium shares as a part of its financial commitment.
Patrick Brindle, Piedmont’s Executive Vice President and Chief Operating Officer, previously served on Atlantic Lithium’s board of directors. He stepped down because Piedmont reduced its ownership stake in the company.
In January 2024, Piedmont sold 24.3 million shares of Atlantic Lithium stock to Assore, Atlantic’s largest shareholder. Following the transfer of these shares Piedmont still owns approximately 5% of Atlantic.ย
Piedmont emphasizes that the sale of these shares does not impact any of its projects, including the Ewoyaa venture.
Additionally, in 2023 Piedmont continued working towards receiving its mining permits for the Carolina Lithium Project. This undertaking involves the construction of a lithium mine in Gaston County.
According to the press release, Piedmont is addressing concerns from the North Carolina Department of Environmental Quality Division of Energy, Minerals, and Land Resources (DEMLR).
“We continue to make advances towards our mining permit in North Carolina for our Carolina Lithium Project, with the most recent set of questions from the state indicating that the review process for this important milestone could be approaching its conclusion.” stated Philips in the press release.ย
Piedmont has been securing mining permits for the Carolina Lithium project since 2021. The state granted the company multiple extensions, including a recent one in 2023 for its waste rock plans.
The proposed mine in Gaston County could be the largest lithium mine in the United States. Sentiments from the community reflect mixed emotions about the project.
On the one hand, Piedmont has donated hundreds of thousands of dollars to the surrounding community. The proposed mine is merely miles away from the City of Cherryville. Piedmont has pledged $10 million over the next 20 years towards Cherryville’s Recreation Department.ย
However, many community members are wary of the proposed mine. Residents have expressed concerns about the local environment and projections in the lithium and electric vehicle markets.
The stock prices for lithium companies across the globe plummeted in 2023. In January 2023, Piedmont’s stock rested at approximately $50 a share. It is currently at $13 a share.ย
Similarly, the Albemarle Corporation started 2023 with approximately $220 a share, while its current stock price sits at $130 a share. However, Albemarle’s stock is on an uptrend while Piedmont’s is not.
According to theย National Association of Securities Dealers Automated Quotations (NASDAQ)ย website, the lithium market is in surplus because of over saturation. Lithium mining companies are reducing production to address over saturation.
Experts expect the lithium market to remain in surplus in 2024.
The City of Cherryville has come to rely on Piedmont to fund its recreational department. The $500,000 annual donations will fund Lance Hudson’s, the recreational director, salary and the incoming splash pad.ย
Some of the community’s concerns stem from Piedmont recently laying off 27% of its workforce in 2024. The company said these cutbacks were routine and although unpleasant, they will not impact Piedmont’s projections.ย
However, some community members are worried that Piedmont’s cutbacks across the board indicate bigger issues at hand.ย
Between the company’s share sales, mining permit extensions and workforce reduction, members of the Stop Piedmont Lithium group express concerns on Facebook.
The advocacy group often posts stock updates and projections for the company while voicing general community concerns. Stop Piedmont Lithium did not respond to immediate attempts of contact regarding Piedmont Lithium’s recent standings.
Despite the projections of the lithium market, Piedmont is still positive about its future endeavors.
“Lithium has been a cyclical business for the past decade with trough markets in pricing generally followed by new record high.” said Philips.ย
Piedmont wants to strengthen its financial position by selling non-essential assets, slowing down capital expenditures and implementing cost-saving measures to reduce corporate overhead.
In anticipation of 2024, Piedmont focuses on strategies to address the lithium market’s projections. Despite the company’s optimism, the surrounding community remains wary, expressing concerns about the company’s ability to fulfill its obligations.
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