Albemarle's stalled plans to build the largest US lithium refinery remain on hold due to the ongoing global glut of the battery metal that has dragged down market prices, the company's CEO told Reuters on Thursday.

That market malaise leaves the US without a major site to process lithium - the cornerstone metal of the energy transition - and essentially dampens efforts by US President Donald Trump and other Washington officials to bolster the country's minerals supply chain and curb its reliance on China.

The US refines only small amounts of the ultralight metal and has only one lithium mine, in Nevada, controlled by Albemarle. Last year, the company paused plans to build a $1.3-billion processing plant in South Carolina due in part to overproduction from Chinese rivals.

While lithium prices can vary by region and type, an index of prices tracked by Benchmark Mineral Intelligence has dropped by 74% in the past two years.

"We've been wanting to build this Western supply chain. The economics just aren't there to build that plant out in South Carolina," Albemarle CEO Kent Masters told Reuters. "The math doesn't work today."

The company, which posted better-than-expected quarterly results on Wednesday, has a lithium price at which it would resume the project's development, but Masters declined to name it.

"We don't have the confidence to say where (the lithium price) is or where it's going, which is why we've kind of gone to the strategy we have of making sure that we can compete at the bottom of the cycle," said Masters.

Western minerals supply chains may need some kind of government support in order to develop projects and offset global competition, he added.

"I don't think private companies are going to be able to do it on their own," Masters said.

M&A

While Rio Tinto RIO.L and other rivals have been buying lithium assets during the downturn, Masters said that Albemarle has yet to find an interesting target.

"We don't have that war chest to go out and look at M&A activity the way we might have if prices were at a different level," he said. "If we saw some super quality resources we could go after, that might be a little different."

In Chile, Albemarle is "pretty focused" on its work in the Salar de Atacama and while it considered bidding to access other salars, the company "didn't find them interesting," Masters said.

Albemarle also is investing in direct lithium extraction projects in Chile and the United States, but Masters declined to say when either might progress.

Amid the market turmoil, Albemarle held auctions for the battery metal as part of a bid to generate higher returns. Those auctions were paused while the company prepared for its quarterly earnings and may soon resume, Masters said.

"We kind of like the idea of understanding pricing better and getting more transparency in the market," he said.