Chile’s SQM (NYSE:SQM) posted a greater than 770 % income increase from its lithium enterprise, reaching US$8.15 billion on the again of a optimistic value surroundings in 2022.
The top lithium producer noticed document excessive gross sales volumes of virtually 157,000 metric tons (MT) of lithium final yr, 55 % larger than 2021, with costs reaching a median of practically US$52,000 per MT.
“Fundamentals behind demand progress are robust, with gross sales of electrical autos rising in all of the markets, particularly within the US market, positively impacted by the Inflation Discount Act, letting us consider that demand this yr ought to develop greater than 20 % when in comparison with 2022,” the corporate stated in a press release.
The Inflation Discount Act was signed into regulation final yr in one other transfer by the US authorities to develop its home lithium-ion provide chain. The laws requires automakers to have 50 % of important minerals utilized in EV batteries come from North America or US allies, together with Chile, by 2024.
SQM, which operates its major lithium enterprise within the Salar de Atacama within the South American nation, stated it should make investments roughly US$1.4 billion from 2023 to 2025 to extend the corporate’s lithium capability to 210,000 MT, together with 100,000 MT of lithium hydroxide capability.
“As electrical automobile gross sales proceed to develop, we now anticipate the lithium demand to achieve nearly 1.5 million metric tons by 2025. This robust demand progress expectations give us confidence as we stay targeted on increasing our lithium manufacturing capability,” CEO Ricardo Ramos stated.
Except for its lithium brine operations in Chile, SQM can also be creating the Mount Holland lithium venture in Australia, which is named one of many world’s largest onerous rock mining deposits, in a three way partnership with Wesfarmers (ASX:WES,OTC Pink:WFAFF). Spodumene manufacturing is predicted to start this yr, with hydroxide manufacturing focused for the primary half of 2025. Between 2023 and 2025, the corporate plans to speculate near US$450 million within the asset.
Final month, SQM’s rival Albemarle (NYSE:ALB) published its quarterly results, saying it expects lithium costs to stay excessive. Equally, US-based Livent (NYSE:LTHM) is forecasting costs to remain at elevated ranges in 2023.
Most lithium corporations have seen momentum improve up to now yr, with some lithium stocks within the US, Canada and Australia seeing year-to-date features.
On March 2, shares of SQM had been buying and selling at US$85.68, up greater than 6 % year-to-date.
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Securities Disclosure: I, Priscila Barrera, presently maintain no direct funding curiosity in any firm talked about on this article.
