Tesla Inc. TSLA,
he is reportedly on the lookout for his own lithium mining company, and losses are piling up for shares of lithium producers.
Albemarle Corp. ALB Stock,
they were down more than 4% on Tuesday, after a nearly 10% drop on Friday. Livent Corp. LTHM,
The shares extended their losses for a third day, falling more than 3% on Tuesday after a 9% drop on Friday.
Bringing together the major publicly traded lithium producers in the US, Piedmont Lithium PLL,
it fell more than 2% after a 12% drop on Friday.
According to a Bloomberg report late Friday, Tesla is considering a possible offer for Canadian miner Sigma Lithium Corp. SGML,
Sigma Lithium is one of “multiple mining options” being explored, according to the report.
Tesla longed to mine his own metal, a key component in electric vehicle batteries.
In September, the electric vehicle maker filed documents related to a proposed lithium refinery in Texas, adding to Tesla’s presence in the state. That would also be following the advice of its chief executive, Elon Musk, who compared lithium mining to “printing money.”
The Financial Times reported in October that Tesla was in talks to buy a stake in commodities giant Glencore PLC GLEN,
but those talks failed.
Lithium prices peaked about a year ago and have since dipped from those highs. The Benchmark Mineral Intelligence Lithium Price Index is down 1.7% this year, but is up 34% year-over-year.
The index is linked to the weighted average price of lithium carbonate and lithium hydroxide, the two main lithium chemicals.
Tesla’s proposed lithium facility, near the Port of Corpus Christi, would be the first of its kind in North America, Tesla said.
Construction could reach “commercial operations” by the end of 2024, Tesla said in a request for tax breaks filed with the Texas Comptroller’s Office.
Last month, General Motors Co. GM,
announced a $650 million investment in Canadian miner Lithium Americas Corp. LAC,
Also weighing on shares of lithium miners is the news that Chinese battery maker Contemporary Amperex Technology Co. Ltd. 300750,
or CATL, is reported to offer discounts mainly to local EV makers on its batteries “to win more orders as lithium prices slowly decline,” Deutsche Bank’s Emmanuel Rosner said in a note.
Despite recent losses, shares of the three lithium miners have outperformed the broader market index in the one-year and year-to-date periods.
In the past 12 months, Albemarle and Piedmont are up 30%, while Livent is up just over 3%. That contrasts with losses of about 8% for the SPX S&P 500 Index,
in the same period.
The outperformance remains year-to-date, with Albemarle up 14%, Livent advancing 18% and Piedmont gaining 43%. That compares with gains of around 5% for the S&P.