Management Accounting Analysis: Talison Lithium Case Study Report

This report analyzes the management accounting problems faced by Talison Lithium, a leading lithium producer. The report, prepared by a student for the ACCM4500 Management Accounting course, examines challenges such as slowing demand, industry diversification, and fluctuating prices. It highlights issues related to production, project delays, and financial uncertainties within the lithium industry. The report provides a memorandum to the Board of Directors, offering recommendations for cost-cutting, strategic project management, and global market competitiveness. It emphasizes the importance of environmental sustainability, efficient operations, and adaptation to the evolving structure of the lithium market. The analysis is supported by references to relevant articles and academic sources, providing a comprehensive overview of the company's management accounting concerns and potential solutions. The report underscores the need for strategic decision-making to ensure Talison Lithium's long-term sustainability and success in a dynamic market.

Running Head: MANAGEMENT ACCOUNTING
MANAGEMENT ACCOUNTING
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction................................................................................................................................2
Reference....................................................................................................................................3

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Memorandum
To: The Board of Director
From:
Cc:
Date: September 9, 2019
Subject: Issues regarding management accounting of Talison Lithium
The aspects of the management accounting problems are analyzed for assisting the directors
of Talison Lithium for focusing on the operations of company. The issues of management
accounting help management of organization for using the provisions of information of
accounting. It helps in better informing themselves prior to decide the matters that are within
the organization and aiding towards performance and management of functions of control.
The analysts of the industry has called for the calm as there has been series of the delays,
layoffs and false starts that looks set for destabilizing the rapidly growing multi-billion dollar
industry of lithium. The article published on Wednesday 4, 2019 has highlighted some of the
serious management issues facing company.
Tailison Lithium Limited is the leading lithium minerals of the world that concentrate
producer as well as supplies the product for the revolution of clean energy. The company is
engaged in mining as well as processing of the lithium bearing mineral translucent, which is
at the operations of Greenbushes Lithium located in Australia. The increase in the demands
of the Lithium has aroused issues of management problems.

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The article regarding Tailison Lithium has identified the slowing down of the demand for the
lithium as the sales of the products such as electric cars as well as batteries are failing for
meeting the globalized projections. There is key uncertainties in the outlook of medium-term
outlook of the lithium are because of the growing diversification of this sector as well as
structure evolving in the sector. Further, industry has gone from the few majors producing of
the battery grade lithium to the low cost ore from Australia’s Greenbushes rock mine to the
much-diversified structure of industry. This new structure is consists of the entrants of the
rock based mining ore.
The chemical element plays important role in the growth of the various industries that
includes electric cars, energy storage system as well as vast deposits, which have been
identified in the Western Australia regional areas. Talison Lithium, which is the largest
producer of the products of the lithium concentrates, has made the announcement that it has
paused the expansion of their project at their mine at Greenbushes in South West after getting
securing environmental approval. The production capacity of the company would ramp up to
1.34 million per year as the company has completed the expansion of the project of Chemical
Grade Plant at Greenbushes. However, the construction activities of Chemical grade plant
project has been paused currently by the company because of the shareholders has reviewed
the timings of the constructions as well as need for the additional volumes of the translucent
concentrate for aligning with converting the capacity additions of shareholders. Greenbushes
is considered and remains one of the most profitable and is provides world-class hard-rock
lithium mine with the long as well as proud history of the operations of safety as well as
supporting communities under which it operates. Analysts are having the view that Western
Australia is still having one of the lithium sources around the world.
It seems that losses in jobs likely appear after the owners of the lithium mine in Goldfiled
region of the Western Australia are placed in voluntary administration as Alita resources,

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which is ASX listed has been collapsed because of the debts of around $42 million. There is
the revelation that on 43 percent of discount, Mount Marion lithium mine nearby Kalgoorlie
Boulder was selling out their product.
The mining analyst has the view that teething problems are not caused because of the
widespread concerns rather there is direct reflection of the global demand for the electric
vehicles at Greenbushes that are not accelerating the away that is as quickly as the people
expect it. The company requires keeping good number of ambitious lithium projects in the
Western Australia, which continues to mothball until the returning of demand. Fluctuations of
the price puts great amount of challenge that is faced by the businesses of lithium mines as
well as refineries. Focusing on the best practices, the country is having low risk of
sovereignty as well as resources of world-class with having three of four hard-rock lithium
best projects around the world. Western Australia is one of leading producer of the lithium
around the world with having 44 percent of the world supply that came from the seven
operating lithium mins of Western Australia.
The opportunities that are available to the Western Australia in this respect are with the
abundance of the battery metals as well as technological know-know, which could be taken
as the advantage of the future opportunities of the future in the emerging industries of battery
related.
Hence, company needs to be in good condition and should have the some ambitious projects
of lithium that would results for meeting the global demands for it. The company should also
to cut their cost so that projects should be executed without incurring any losses and having
debt, while remaining sustainable towards environment. They should hold those projects,
which would be giving good return and should not hold any project that would increase the
costs. Moreover, the company needs to operate in world market as well as it needs for being

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competitive in the structure of their cost for keeping track of their projects. If the company
forms the part of global supply for the processes material there would be less opportunities
for the fluctuations. Moreover, the company should combine lithium hydroxide with the
nickel sulphate as well as cobalt sulphate for forming precursor chemicals. If the company
has the position in precursor chemical industry then it would move further down value chain
for cathode and anode manufacturing.
Therefore, this memo would be useful for the board of directors of the company for
understanding the different issues facing company’s management and understanding of the
solutions of those problems.

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Reference
ABC News. (2019). Lithium's teething troubles put workforce on shaky ground. [online]
Available at: https://www.abc.net.au/news/2019-09-04/lithium-teething-troubles-put-
workforce-on-shaky-ground/11470252?section=business [Accessed 9 Sep. 2019].
Chenhall, R.H. and Moers, F., 2015. The role of innovation in the evolution of management
accounting and its integration into management control. Accounting, organizations and
society, 47, pp.1-13.
Christmann, P., Gloaguen, E., Labbé, J.F., Melleton, J. and Piantone, P., 2015. Global lithium
resources and sustainability issues. In Lithium Process Chemistry (pp. 1-40). Elsevier.
Maas, K., Schaltegger, S. and Crutzen, N., 2016. Integrating corporate sustainability
assessment, management accounting, control, and reporting. Journal of Cleaner
Production, 136, pp.237-248.
Maxwell, P., 2018. The end of the mining boom? A Western Australian perspective. Mineral
Economics, 31(1-2), pp.153-170.
Piantone, P., 2015. Global Lithium Resources and Sustainability Issues. Lithium Process
Chemistry: Resources, Extraction, Batteries, and Recycling, p.1.
Schaltegger, S. and Burritt, R., 2017. Contemporary environmental accounting: issues,
concepts and practice. Routledge.
Talison Lithium. (2019). Talison Lithium. [online] Available at:
https://www.talisonlithium.com/ [Accessed 9 Sep. 2019].