A day after losing 7.5% of its market value, Piedmont Lithium (ASX:PLL)
announced a 27% reduction in its workforce as it grapples with the challenges in the lithium industry.
The shares closed at 18.5 cents on Tuesday, resulting in a market value of approximately $370 million.
The shares have declined by over 55% in the first few weeks of 2024 and more than 81% in the past year, with a 52-week high of $1.08.
Piedmont stated that the job cuts are expected to save $10 million per year. CEO Keith Phillips emphasized that these "cost reductions, while difficult, are necessary to position the company for the long-term."
Piedmont joins a growing list of lithium companies making workforce reductions, suspending mining or exploration activities, seeking funding, or considering mergers in response to the dramatic 98%+ price drop in the key battery metal since November 2022.
Piedmont, an Australian company that relocated to the US in 2018, has been striving to launch its North Carolina lithium project and is awaiting regulatory approval after providing additional data in mid-January.
In January, larger rival Albemarle terminated its North Carolina project and a $1.3 billion lithium hydroxide project in South Carolina. Albemarle will release more details about its cuts, along with its December quarter figures and 2024 outlook next week.
Piedmont also has a joint venture in Ghana that faced criticism from short sellers last year.
The company reported increased production at its North American Lithium (NAL) operations in Quebec.
It also mentioned collaboration with Sayona Mining, its NAL partner, to review the joint venture's operations, which appears to be a response to the current low price environment.
"The objective of the review is to continue to improve NAL’s productivity and operating costs with a view to positioning NAL to operate through the market cycle."
However, the statement did not address what would happen if repositioning was not feasible.
On a positive note, the NAL mine in Quebec is North America's only operating lithium mine, providing strategic value to keeping it operational.
The company reported having $72 million in cash and $38 million in marketable securities at the end of 2023.