Australian lithium miner Galaxy Resources Ltd posted a large annual loss on Friday and warned that sales deals with Chinese customers would be hit this year by the coronavirus outbreak.
The virus epidemic has upended global supply chains and caused widespread disruption to business and factory activity in China, leading the miner to say that it would not provide any sales forecasts until it had further clarity on the situation.
“We reported previously that a number of sales negotiations were in progress,” said Simon Hay, chief executive officer of Galaxy Resources, in a statement.
“This continues to be the case, however, customers are not in a position to conclude purchases due to constraints on many aspects of their businesses.”
The company reported net loss attributable of $283.7 million for the year ended Dec. 31, versus a profit of $150.2 million a year earlier.
The company said a major contributor for the loss was a plunge in prices of spodumene, a hard rock lithium concentrate, which led to a writedown of inventory and impairment of equipment at its flagship mine Mt Cattlin in Western Australia.
Galaxy Resources reported a 22% jump in annual production at its Mt Cattlin mine.
Shares of the company had risen as much as 6% during the session as lithium miners rallied on the prospect of China extending subsidies for electric vehicles amid a downturn in sales.
The sector has faced severe pressure last year as prices plummeted after a cut in electric vehicle (EV) subsidies by China, the world’s biggest electric vehicle market.
(By Shriya Ramakrishnan; Editing by Amy Caren Daniel)
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