European lithium miner Critical Metals Corp. (NASDAQ:CRML) fell 30% after it began trading following the combination of SPAC Sizzle Acquisition Corp. and European Lithium Ltd. Sizzle shares skyrocketed 120% on Tuesday.
The public debut of Critical Metals (CRML) comes after a unit of Australian miner European Lithium first announced it agreed to go public on Nasdaq through SPAC Sizzle in October 2022. That announcement came after European Lithium earlier that year said it had an agreement with BMW AG to supply battery-grade lithium hydroxide to the vehicle maker.
Critical Metals owns Wolfsberg Lithium Project located in Wolfsberg, Austria.
"It's a relief" to finally go public, Tony Sage, Executive Chairman of Critical Metals, told Seeking Alpha in an interview Friday. "This has been the longest process ever."
Critical Metals (CRML) first day of trading comes as lithium has plunged in recent months as demand for electric vehicles appears to be less than expected, especially in the U.S.
Albemarle (ALB), the world's biggest lithium producer, reduced its 2030 demand forecast for the crucial battery ingredient as the shift to electric vehicles in the U.S. and Europe is moving slower than expected, according to a Financial Times report earlier this month, which cited an interview with Eric Norris, Albemarle’s president of lithium. Albemarle forecast 3.3 million tonnes of lithium carbon equivalent to be needed globally by 2030, a 10% cut from its previous forecast of 3.7 million tonnes.
"If you're a producer now, you've got a bit of pain because you are overproducing," Sage said. "The beauty of our product is that we don't come with our product out until 2027."
"I think they've (prices) have bottomed," Sage said. "I think it's a small rise for the rest of this year and it starts to pick up the year after and then it really zooms up in 2027 and 2028."
Sage highlighted that while the U.S. electric vehicle market is adopting the technology at a slower-than-expected pace, there are requirements for many countries in Europe that got into effect in 2030. He also said lithium is also needed for many other items besides EVs, such as battery-powered tools, scooters, electric bikes, and battery storage facilities.
"I'm very bullish," Sage added. "We will come out with our product when it's needed, but we don't have to search for a buyer with all our product going to BMW."
Sage said he expects there will be some "rationalization" in the lithium mining sector in the next three to six months and he believes merger & acquisition activity will increase, though Critical Metals is not a seller itself anytime soon.
"I'm going to resist any opportunity for us to be taken out until we get all the construction contracts in place, the financing in place, etc. etc.," Sage said. "Probably companies like mine will be ripe for a takeover just before the commissioning of plants and that's a couple of years away for us."