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Friday, January 27, 2023

Lucrative times for lithium giant Albemarle


Albemarle, the world’s largest lithium producer, has confirmed the fabulous returns from the current boom that the likes of Allkem and Pilbara Minerals hinted at last week in their latest quarterly reports.

This week, in an update ahead of its 2023 Big Investor Strategy Day, Albemarle released estimated sales and earnings data (unaudited) for the fourth quarter and all of 2022 that confirmed the increase in revenue and earnings evident earlier. of the year, which continued until the end of December.

While Allkem has a lithium hydroxide production part of its business and Pilbara Minerals is (so far) primarily a producer and exporter of spodumene, Albemarle has a ‘full service’ operation producing both metal and minerals, located primarily in Australia, China, USA and South America.

“We delivered record results in 2022, exceeding our previous projections, and our updated outlook and long-term targets reflect further acceleration in growth,” Albemarle Chief Executive Officer Kent Masters said in the statement.

Albemarle said net sales for 2022 will end in the record range of $7.29 billion and $7.35 billion, more than double the previous 2021 annual record of $3.328 billion.

Net income will be significantly higher, in the range of $2.622 million to $2.712 million, many times more than the $123 million in 2021 (which was reduced by a large reduction in the value of other non-products). lithium). assets by the company.

Adjusted EBITDA for 2022 will be in the range of $3.44 billion to $3.49 billion, compared to $871 million in 2021.

Early figures (full audited release due February 15) for the fourth quarter show an increase in net sales of more than 190% from the fourth quarter of 2021 to a range of $2.590 billion to $2.650 billion , net income in the range of $US1.107 to $US1.157 billion, and adjusted EBITDA in the range of $US1.210 billion to $US1.260 billion (or more than 400% better than the same figures for the last quarter of 2021).

No breakdown of where the profits came from was provided in the brief update (Albemarle also produces non-lithium chemicals).

In Australia, Albemarle is involved in a joint venture with Mineral Resources (in WA in the Pilbara) and has interests in the Greenbushes mine near Esperance in South WA and lithium refineries in Kemerton in South WA.

Albemarle’s presence in Western Australia extends beyond the Kemerton Strategic Industrial Area. It also sources lithium through hard rock mining through our 49% interest in Windfield Holdings Pty. Ltd, which directly owns 100% of the share capital of Talison Lithium Pty. Ltd., an Australian incorporated company (“ Talison”).

Talison, through its wholly owned subsidiaries, owns and operates a lithium mine in Greenbushes, Western Australia and extracts lithium ore, which is then milled and processed to separate the lithium concentrate from the rest of the ore. That is in association with IGO Ltd of Perth and Tianqui of China.

In addition, Albemarle has a 60% interest in Mineral Resources Limited’s Wodgina hard rock lithium mine project in Western Australia and has an unincorporated joint venture with MRL, called the MARBL Lithium Joint Venture, for the exploration, development, extraction , processing and production of lithium. and other minerals (other than iron and tantalum) from the Wodgina Project and for the Kemerton operation. The Kemerton 1 and 2 trains are part of MARBL Lithium JV.

IGO publishes its exploration and production figures for the December quarter and half year on January 31, as well as its financial data for the six months of December.

Mineral Resources releases its quarterly data today (Wednesday) for the three months through December and for the half year after.

Albemarle’s statement aired quietly on Business Wire on Monday night and had no impact on share prices.

In Australia, however, UBS went on a rampage over lithium, sending shares of some leading groups soaring. For example, Pilbara shares rose to $5.08, more than 5%, Liontown shares rose 4.7% to $1.76, despite disclosing a nasty cost overrun on its big lithium mining project. of Kathleen Valley, WA, and Allkem shares were up 3.4% at $13.80.

But Albemarle’s early numbers should, like Pilbara Minerals’ quarterly financials last week, are real and underscore how well successful players are doing.






Glenn Dyer

Glenn Dyer has been a financial journalist and television producer for more than 40 years. He has worked for Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.


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