Albemarle to Idle Remaining Operations at Kemerton Lithium Hydroxide Plant
Albemarle Corporation (NYSE: ALB), a global leader in supplying critical materials that support mobility, energy, connectivity, and health industries, has announced plans to idle the final operating train at its Kemerton lithium hydroxide processing facility in Western Australia. The company confirmed that Train 1 will be placed into care and maintenance effective immediately, marking a significant shift in the plant’s operational status.
This latest move follows earlier actions taken in 2024, when Albemarle placed Train 2 into care and maintenance and halted expansion plans for the proposed Trains 3 and 4. Together, these steps reflect the company’s broader response to ongoing volatility in global lithium markets and the economic pressures facing hard-rock lithium conversion operations in Western regions.
Role of Kemerton in the Global Lithium Supply Chain
The Kemerton facility was designed to process spodumene concentrate sourced from the Greenbushes mine, widely recognized as one of the highest-quality and most productive spodumene resources in the world. Albemarle maintains an ownership stake in Greenbushes through an Australian joint venture and holds rights to half of the mine’s offtake production.
Built using proven lithium hydroxide conversion technology at commercial scale, the Kemerton plant represented a strategic investment aimed at strengthening a localized Western lithium supply chain. The facility was expected to support growing global demand for lithium hydroxide, particularly from electric vehicle battery manufacturers and other advanced energy storage applications.
Despite these strategic advantages, persistent pricing instability and cost pressures have challenged the economic viability of lithium conversion operations in the region.
Market Pressures Drive Operational Decision
Albemarle Chairman and Chief Executive Officer Kent Masters described the decision to idle Kemerton’s remaining operations as difficult but necessary under current market conditions.
According to Masters, the company has spent more than two years implementing cost-reduction initiatives and operational adjustments in response to prolonged lithium price volatility. While recent improvements in lithium pricing provided some relief, they have not been sufficient to fully offset the structural challenges associated with Western hard-rock lithium processing.
Idling the Kemerton facility is therefore intended to:
- Improve Albemarle’s financial flexibility
- Reduce near-term operating costs
- Preserve long-term strategic optionality should market conditions strengthen
This approach allows the company to balance short-term financial discipline with the ability to respond quickly to future demand recovery.
Financial and Production Implications
Albemarle expects the decision to have a positive impact on adjusted EBITDA beginning in the second quarter of 2026. Importantly, the company indicated that the move will not affect its projected lithium sales volumes for 2026.
Customer demand for lithium hydroxide will instead be fulfilled through Albemarle’s other production assets and supply channels. This redistribution strategy enables the company to maintain commercial commitments while reducing exposure to higher-cost processing operations.
The anticipated earnings improvement underscores the company’s broader focus on capital efficiency and disciplined portfolio management during cyclical downturns in commodity markets.
Continued Commitment to Australian Mining Assets
While Kemerton’s processing operations are being idled, Albemarle emphasized that its core mining interests in Australia remain unchanged.
Key assets unaffected by the decision include:
- Ownership and offtake participation in the Greenbushes lithium mine
- Interests in the Wodgina lithium operation
- Ongoing exploration activities across Western Australia
These mining resources continue to play a central role in Albemarle’s long-term global lithium strategy. Maintaining exposure to high-quality upstream supply positions the company to benefit when lithium demand growth resumes, particularly as electrification trends accelerate worldwide.
Alignment With Broader Financial Updates
The Kemerton announcement coincides with Albemarle’s release of its fourth-quarter and full-year 2025 financial results, which were issued in a separate press statement on the same day.
Company leadership is expected to provide additional context regarding:
- Market outlook for lithium and energy storage materials
- Cost management and capital allocation priorities
- Operational strategy across global production assets
These topics will be discussed during Albemarle’s scheduled earnings conference call at 8:00 a.m. EST on Thursday, February 12, 2026.
Strategic Outlook Amid Lithium Market Uncertainty
Albemarle’s decision reflects broader uncertainty across the lithium industry, where rapid capacity expansions earlier in the decade were followed by pricing corrections and margin compression. Producers worldwide have responded with project delays, spending reductions, and operational reviews aimed at preserving balance sheet strength.
By placing Kemerton into care and maintenance rather than fully decommissioning the facility, Albemarle retains the ability to restart operations if:
- Lithium prices recover sustainably
- Conversion economics improve
- Customer demand strengthens beyond current supply capacity
This flexible posture suggests the company continues to view lithium as a long-term growth market, even as it navigates short-term cyclical headwinds.
SOURCE LINK: https://www.albemarle.com/
