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Vice President Daniel Jimenez says capacity increases at SQM’s Chile operations, together with new projects in Australia and Argentina, will help put the company in the top slot.
Chile’s SQM (NYSE:SQM) is on track to become the world’s top lithium producer by 2022, increasing output and overcoming competitor Albemarle (NYSE:ALB), the company said on Wednesday (August 8).
According to Vice President Daniel Jimenez, the company’s capacity increases at its Chile operations, together with new projects in Australia and Argentina, will help put SQM in the top slot.
SQM’s current capacity is 23 percent of the world’s total, while US-based Albemarle has the capacity to produce 29 percent. By 2022, the Chilean miner is set to increase that number to 28 percent, beating Albemarle, whose capacity is expected to come in at 16 percent.
SQM’s Jimenez also said that global production capacity for lithium, a key ingredient in electric vehicle (EV) batteries, will more than triple in four years, reaching 735,000 tonnes by 2022 — up from about 212,000 tonnes at present.
Last month, the lithium miner said it was seeking government approval for a US$450-million lithium carbonate plant expansion to be able to supply increasing demand expected from the EV sector.
The plant could boost SQM’s production capacity from 70,000 tonnes to 180,000 tonnes by 2020. The company plans to begin the lithium plant project at the end of this year.
“We believe that with demand growing close to 20 percent this year and next year, the market will be able to absorb this additional supply,” said former CEO Patricio de Solminihac in a statement accompanying the company’s first-quarter results in late May. “Our strategy is to have the installed capacity to react to market demand.”
According to the Chilean miner, Australia will remain the top lithium-producing country, and will increase its percentage of global output from 38 percent to 46 percent by 2022. Meanwhile, Chile’s share will decrease from 37 percent to 30 percent.
On Thursday (August 9), shares of SQM were down 0.37 percent in New York, closing at US$47.91. The company’s share price has declined 21.8 percent year-to-date.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
