South African mining firm, Sibanye Stillwater, has withdrawn from its planned investment in the Rhyolite Ridge lithium project in Nevada, citing falling lithium prices and unfavorable investment conditions.
This was disclosed in a statement by the company on Wednesday, noting that after reviewing updated studies on the project, the decision was made to halt additional investments.
Sibanye initially agreed to invest $490 million in 2021 for a 50% stake in the lithium mine, partnering with Australian listed Loneer as part of its expansion into battery metals.
The company also holds a 6% stake in Loneer following a $70 million strategic investment.
However, the sharp decline in lithium prices down more than 80% from their peak in November 2022 has forced several mining firms to pause or abandon projects.
Sibanye said the Rhyolite Ridge project no longer met its investment criteria under current market conditions.
“The project did not meet our investment hurdle rates at prudent pricing assumptions,” Sibanye stated, without providing further details.
Lithium, a key material used in batteries for electric vehicles, has seen a supply glut in recent years.
While demand remains high, the oversupply has driven prices down, affecting investment decisions across the industry.
Several companies have been forced to suspend projects, delay expansion plans, or seek alternative financing options.
Loneer moves forward with new funding
Following Sibanye’s exit, Loneer confirmed that it remains committed to advancing the fully permitted lithium project.
The company secured a $996 million loan from the U.S. Department of Energy and is now looking for a new equity partner.
“Loneer’s focus remains on bringing this world-class project online, and we will move forward with a strong partner who can help see the project into production,” the company said in a statement.
The Rhyolite Ridge mine is expected to play a key role in boosting U.S. lithium production, a critical element in the global electric vehicle supply chain.
Meanwhile, experts suggest that despite the current downturn, lithium demand could rebound in the coming years as EV adoption grows worldwide.
