After borrowing billions to fund an overseas expansion to ride a lithium boom, a collapse in prices has left one of the world’s top producers straining under a mountain of debt.
Valued at more than $6-billion, Tianqi Lithium’s predicament highlights the risks of boom-and-bust cycles in commodity markets that can punish mistimed or over-extended ventures, even in sectors fated to become dominant.
While long-term prospects for lithium are bullish as demand for electric-vehicle batteries booms, the sector is reeling from a prolonged price slump triggered by an explosion in supply and reduction of EV subsidies in China, the biggest auto market.