Battery Metals

Lithium Investing

Albemarle says it has developed new technology that could allow it to increase its Chilean lithium output by over 50 percent.

Lithium giant Albemarle (NYSE:ALB) will seek to raise its production limit in Chile, the company said on Friday (September 15).
The US-based company said it has developed new technology that could enable it to increase its total lithium output in the country from 80,000 MT to 125,000 MT of lithium carbonate equivalent. That would be a 56.25-percent increase from its current level.
“With the understanding that this new technology is commercially viable, Albemarle will build a new lithium carbonate production plant at the beginning of the next decade,” the company said in a statement.

Albemarle’s share price has been on the rise since the beginning of the year, and at close of day Monday (September 18) it was up over 50 percent year-to-date. It was also up just under 4 percent since Friday’s production announcement.
That said, not everyone is optimistic about the company’s news. In a recent interview with Epstein Research, lithium expert Joe Lowry questioned the feasibility of Albemarle’s new technology. “Their announcement on September 15th about new technology was a typical PR move, but likely lacks substance — they highlighted a technology that even they say is not ready for commercial use,” he said.
The company will also have to seek approval from the Chilean government if it wants to increase its lithium output. Albemarle operates in the Atacama salt flat in Chile, which hosts roughly 37 percent of the world’s entire lithium production.
The South American country classifies lithium as a “strategic” material on the ground, as the metal can be used in nuclear fusion power plants. It controls output of the metal for commercial and environmental reasons, which means producers need authorization from the Nuclear Energy Commission — operating conditions are set directly with the government on a case-by-case basis.

If Albemarle’s expansion plan is approved, the company’s investment in top lithium producer Chile will reach $1 billion over the next five years.
Lithium is a key element in the batteries used to power electric cars, and demand for the metal is expected to surge as these vehicles become more popular. Roskill estimates that 785,000 tonnes of lithium carbonate equivalent a year will be needed by 2025, amounting to a 26,000-tonne shortfall from anticipated supply.
Meeting the world’s growing lithium supply needs continues to be a challenge for producers, as bringing projects into the market is not as easy. In fact, processing battery-grade lithium can take anywhere from three years to seven years or more, depending on the project.
Because of those market dynamics, lithium prices and stocks have been on an uptrend. Most recently, analysts at Eight Capital shared their four lithium stocks to watch. Click here to read more.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.


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