Other battery recycling investments continue
By Jessica Holdman
SCDailyGazette.com
RICHBURG — Less than a year after announcing plans for a major refinery in rural Chester County, the world’s largest producer of lithium for electric vehicle batteries hit pause on the project that would have brought 300 jobs with wages nearly twice the county average to a tiny town near the North Carolina border.
Albemarle Corp. was supposed to break ground this year on what it was calling its $1.3 billion lithium “Mega-Flex” processing plant near Richburg, 40 miles south of the company’s Charlotte headquarters.
Instead, the company told investors last month it would hold off building the facility, large enough to produce lithium for roughly 2.4 million electric vehicles annually, as prices for the battery metal have tanked from highs in 2022.
“Lithium prices have fallen a lot, and we are seeing supply project delays all over the world,” said Joel Jackson, an analyst with BMO Capital Markets Equity Research.
It puts a damper on South Carolina’s parade of economic development wins, which for the last couple years have been heavily centered around electric vehicles and batteries. It also suggests a setback in the United States’ efforts to build its own supply chain for critical battery metals and move away from reliance on China, which refines more than half the world’s lithium.
Of the Palmetto State’s other lithium-related projects, one has yet to break ground while another is progressing as planned, at least for now.
Lithium prices dropped 80% in the past year, according to data from Benchmark Mineral Intelligence. But the commodity has recently rallied slightly, up 12% from the rock-bottom price of $13,200 per metric ton at the end of February, the lowest prices had been in three years.
“We’ll see what happens next,” Jackson said.
Electric vehicle demand slows
The decline in lithium prices is directly tied to the electric vehicle market.
Demand for electric vehicles, while rising, has not grown as quickly as the industry originally predicted, particularly in the United States. While a record 1.4 million electric and plug-in hybrid vehicles were sold in the U.S. in 2023, analysts had projected sales to reach 1.7 million.
In response, American automakers, including Tesla and Ford, have cut prices and scaled back production plans.
For example, premium models of Ford’s 2023 Mustang Mach-E are selling for under $40,000, representing a roughly $8,000 cut. Tesla lowered the price of its 2023 Model 3 by $1,250 to $38,990 and Model Y by $3,750 to $43,990.
Most of South Carolina’s vehicle manufacturers export the majority of the vehicles made here, making them less susceptible, but even the fast-growing China market has slowed. This has created a global glut of lithium and other metals used to make battery cells, which is particularly hard on the United State’s fledgling lithium industry.
“Prices today are unsustainable,” Albemarle CEO Kent Masters told investors.
He said the company is delaying — not canceling — the South Carolina project, though the company isn’t doing any engineering or other preparation work for the site.
For the construction process to restart, Masters said, lithium prices will need to stabilize from the volatile price swings of the past year.
Chester County Economic Development Director Robert Long is optimistic. Albemarle executives have told him the project is still a priority for the company.
Even if the plant doesn’t work out, it won’t be as devastating as losing an existing employer, Long said. The county would likely find another company to take the 700-acre site, located just 4 miles from Interstate 77.
But whether that new company could promise the $93,000 average annual wages Albemarle said it would offer is another matter.
The fall in lithium prices has produced one benefit — cheaper batteries — which has lowered the price of certain electric vehicles and could help spur demand.
But it’s a bit of a double-edged sword. If demand for electric vehicles rises, after lithium companies have pulled back on investments, automakers will again be scrambling for supplies.
Other plans for lithium batteries also seem to be on pause.
Charlotte-based Cirba Solutions, which also has battery recycling plans in South Carolina, was supposed to break ground in 2023 on a $300 million facility south of Columbia and begin operations later this year.
So far no construction has taken place but a spokeswoman for the company said it remains committed to the project.
Battery recycling project continues
In rural Berkeley County, a company founded in 2017 by a former Tesla executive continues with construction of its second U.S. battery recycling facility.
Redwood Materials broke ground in January and has started construction on the site’s first processing buildings, where it will refine the lithium and other metals it salvages from used batteries. It plans to start taking in used batteries later this year, according to a company spokeswoman.
Redwood calls its business model unique. It recycles not just lithium, but cobalt, copper and nickel, and remanufactures them into new battery components to sell back to U.S. battery manufacturers. The company did not go into further detail about how much the low price of some of those metals might factor into the profitability of the business.
The $3.5 billion investment by the Carson City, Nevada-based company marks the largest single economic development project in the state’s history. It plans to eventually hire 1,500 workers and will pay some of the highest wages in Berkeley County — between $27 and $75 per hour.
Redwood is valued at $5 billion and has been earmarked for a $2 billion loan from the U.S. Department of Energy.
Editor’s Note: This story was updated with comments from Cirba Solutions on the status of its Richland County project.
Jessica Holdman writes about the economy, workforce and higher education. Before joining the S.C. Daily Gazette, she was a business reporter for The Post and Courier.
