(Reuters) - Canada’s Nemaska Lithium Inc said on Monday it would seek creditor protection in the latest sign of turbulence to hit the fast-growing industry.
The move comes as oversupply of the battery metal this year has prompted major producers to cut back and forced some smaller miners out of the business.
Nemaska, whose largest shareholder is the government of Quebec, had been in talks with mine financier the Pallinghurst Group to secure a potential C$600 million equity investment but had yet to announce a deal.
The company in October suspended operations and laid off employees after announcing cost overruns of more than $300 million at its flagship Whabouchi project.
Lithium is expected to be in hot demand in the early years of the next decade, but top producer Albemarle Corp warned last month that challenging market conditions could persist for up to 18 months.
Nemaska is the second miner backed by the Canadian province of Quebec to succumb to weak prices for the white metal.
Chinese battery firm Contemporary Amperex Technology’s North American lithium unit obtained creditor protection earlier this year. Bids for its mothballed Quebec mine and plant are due by January.
Reporting by Jeff Lewis; Editing by Nick Macfie and Steve Orlofsky