Monadelphous (ASX:MND) shareholders were having a bad day on Thursday as the stock tanked more than -6% due to Albemarle downsizing its lithium operations.
Albemarle announced on Thursday it was cutting 300 jobs in Australia on-site its lithium operations as the commodity price remains uneconomical to warrant the current scale of Albemarle’s play.
Monadelphous, a contracted services provider on-site, has fallen among the victims.
“Monadelphous was contracted to construct the front-end pyromet works associated with two new lithium processing trains and a multidisciplinary package for the utilities and reagents scope,” the industrial engineering services provider wrote on Thursday.
“The Company estimates that its contracted construction works are currently 15% – 20% complete.
“The termination of these contracts reduces the Company’s current construction work-in-hand by approximately $200m.”
Monadelphous also wrote it had received “verbal” notification its maintenance services contracts and that for sustaining capital projects were also being terminated.
It’s just the latest lithium miner to hit the brakes in an effort to survive given the glory days of 2022-2023 are now over when it comes to lithium supply and demand.
A huge boost in global supply – and EV demand slowing sharply following the removal of rebates in major economies – are combining to keep lithium prices dramatically lower than where they were in the recent past.
MND last traded at $12.20.