Chris Ellison, CEO of Perth-based Mineral Resources, one of Australia’s top lithium miners, has strongly criticized global automakers for their slow adoption of electric vehicles (EVs). This comes as a sharp decline in lithium prices, driven by a slowdown in EV sales, has pushed the industry into a challenging period.
Ellison, who described the current situation as the "shittiest time" to be running a mining company tied to lithium, revealed that Mineral Resources is slashing costs and has decided not to pay a dividend to shareholders for the first time in over a decade. “Let’s be really, really clear … there are no lithium companies making money,” Ellison stated, emphasizing the harsh financial realities facing the sector.
Despite Australia holding some of the world’s largest lithium reserves, the price of the metal, essential for manufacturing lithium-ion batteries for EVs and renewable energy storage, has nosedived this year. This decline has been attributed to softer consumer demand in China and the impact of global policy changes and higher interest rates, which have made EVs more expensive compared to traditional combustion-engine vehicles.
Ellison specifically blamed First-World automakers for their reluctance to fully commit to electric vehicle production. “Our lazy First-World car manufacturers … all of the leaders of those companies are making great profits out of combustion engines,” he said. “They don’t want to invest the money and waste their profits on developing the electric vehicle.”
However, Ellison remains optimistic about the long-term demand for lithium, predicting that the market will recover by late 2026 or early 2027 as the world continues its push towards reducing carbon emissions. “The world’s not going to stop demanding we get carbon out of the atmosphere,” he noted.
Mineral Resources reported a more than 50% drop in net profit for the fiscal year ending June 30, falling to $114 million. Despite achieving record production of spodumene, a hard-rock lithium source, from its Wodgina operation in Western Australia, the prices earned for its lithium sales fell by over 75% to $US1279 per dry metric tonne.
Ellison acknowledged that the company is bracing for further challenges but expressed confidence in its ability to navigate the downturn. "We manage the business in line with the economic environment that we’re sitting in,” he said.
Following the announcement, Mineral Resources’ shares dropped by over 8%, closing at $40.61. UBS analyst Lachlan Shaw noted that while the company’s results were as expected, capital expenditure and cost forecasts were softer due to the weak commodity price environment and high debt levels.
