• Top lithium producer Albemarle's original plans to reopen the Kings Mountain mine in North Carolina as early as late 2026 have been pushed back.
• Eric Norris, president of energy storage at Albemarle, said progress slowed as the company faces headwinds from a collapse in lithium prices, but the project is moving forward.
• The resource-rich mine is crucial to setting up a domestic electric-vehicle battery supply chain.

Albemarle's plans to reopen a resource-rich lithium mine in North Carolina will take longer than originally expected as a collapse in lithium prices weighs on the company.

Albemarle, a top lithium producer, had originally planned to reopen the Kings Mountain mine as early as late 2026 to increase domestic lithium production and support a U.S. electric-vehicle battery supply chain.

"It's going to be a later date," Eric Norris, president of energy storage at Albemarle, told CNBC. "It slowed down a bit given the concerns we have, but we are still progressing it forward. It's not that we've stopped it."

Kings Mountain could produce enough material to manufacture 1.2 million electric vehicles annually. The mine sits on one of the world's richest deposits of spodumene ore, a source of lithium. There is currently only one operational lithium mine in the U.S. in Silver Peak, Nevada, which is owned by Albemarle.

Albemarle does not have a precise date for when Kings Mountain will become operational, Norris said. The company is preparing to start the permitting process, which will take two years to complete. Construction will be a multiyear undertaking before the mine is operational, according to the company.

The Biden administration has made setting up a battery supply chain, supported by domestic lithium production and processing, a top priority to end dependence on China, which dominates the global market. Albemarle was awarded a $90 million grant from the Defense Department to support domestic mining, which the company is using to help reopen Kings Mountain.

Kings Mountain was an operational lithium mine from 1937 until the 1980s when owner Rockwood Holdings ceased operations to focus on resources in Chile. Albemarle acquired Rockwood and the mine in 2015.

Albemarle has come under pressure as global lithium prices have collapsed more than 40% since last year and 81% from 2022 highs, forcing the company to adjust expansion plans. Albemarle put on hold a chemical plant in Richburg, South Carolina, that would have processed the lithium from Kings Mountain.

Albemarle CEO Kent Masters said the industry still needs to add significant capacity as electric-vehicle demand remains strong, with more than 20% global growth so far this year. However, lithium prices have fallen below the marginal cost of production as the supply of the commodity has expanded.

"It's difficult to justify investment projects where the prices are today," Masters said.

Lithium prices need to be at a minimum of $20 per kilogram to justify investments, Masters said. The average price in 2023 was $15 per kilogram. The CEO said he expects lithium prices to become less volatile, with lower highs and higher lows, as the market matures.

Albemarle's profit plummeted 99% to $2.4 million in the first quarter compared with $1.2 billion a year ago. Revenue fell 47% to $1.36 billion, down from $2.58 billion in the first quarter of 2023.

Though Albemarle took a huge hit compared to last year, the company's earnings largely met Wall Street expectations, while revenue came in above forecasts. Investors reacted positively to the results with shares closing more than 5% higher at $125.30 on Thursday. On Friday, shares climbed 3% further.