For a long time, most of the world’s lithium was produced by an oligopoly of producers often referred to as the “Big 3”: Albemarle (NYSE:ALB), Sociedad Quimica y Minera de Chile (NYSE:SQM) and FMC (NYSE:FMC).
Rockwood Holdings was on that list too before it was acquired by Albemarle several years ago, making Albemarle that much bigger.
However, the list of the world’s top lithium-mining companies has changed in recent years. The companies mentioned above still produce the majority of the world’s lithium, but China accounts for a large chunk of output as well. The Asian nation was the fourth-largest lithium-producing country in 2016 in terms of mine production, according to the US Geological Survey — behind Australia, Chile and Argentina.
What’s more, Australia’s largest lithium mine, called Greenbushes, is majority controlled by China’s Tianqi Lithium (SZSE:002466). Tianqi owns a 51-percent stake in Talison Lithium, which runs the mine, while Albemarle owns a 49-percent stake in Talison via its acquisition of Rockwood Holdings.
All in all, the market share for the “Big 3” lithium producers has dropped from about 85 percent to 53 percent, while China now has about 40 percent of the world’s market share. In the future, China is expected to fuel lithium-ion battery production, which is set to increase substantially in the coming years.
In other words, lithium investors need to be keeping an eye on lithium-mining companies in China in addition to the New York-listed chemical companies that produce the material. Indeed, lithium expert Joe Lowry has written extensively about China’s rising share of the lithium market. See below for his October 2017 Investing News Network interview on the topic.
As the landscape of lithium-mining companies continues to change, investors would do well to keep an eye on major players — Lowry has suggested that there could be an alliance forming as they try to ensure they are able to meet rising demand from the electric vehicle sector. Read on for an overview of the current top lithium-producing firms by market cap. Data was current as of January 24, 2018.
1. SQM (NYSE:SQM)
Market cap: US$14.89 billion
SQM claims to be the world’s largest lithium producer, with offices in over 20 countries and customers in 110 nations across the globe. The firm has five business areas, ranging from lithium and derivatives to potassium to specialty plant nutrition.
The lithium producer faced some challenges in 2015. It spent plenty of time butting heads with Chile’s Corfo over its leases in the Salar de Atacama, where the company’s brine operations are located. After many failed meetings, SQM and Corfo came to a resolution in mid-January 2018.
In addition to its Chilean operations, SQM has a joint venture with Lithium Americas (TSX:WLC). The two companies announced in 2016 that they would develop the Cauchari-Olaroz lithium project in Argentina, marking SQM’s first investment in lithium outside of Chile. Work continues to move forward at Cauchari-Olaroz — most recently, Lithium Americas and SQM said first production is targeted for 2020.
2. Albemarle (NYSE:ALB)
Market cap: US$12.84 billion
Albemarle is one of the largest lithium producers in the world, employing 5,000 people and with customers in 100 different countries worldwide. Besides lithium, Albemarle produces bromine and provides refining solutions and chemistry services for pharmaceutical firms.
When Albemarle closed its acquisition of Rockwood Holdings in early 2015, it became a heavyweight in the lithium space. The company owns lithium brine operations in the US and Chile and, as mentioned above, it owns a 49-percent stake in the massive hard-rock Greenbushes mine Australia. In March 2017, Albemarle announced plans to double production at Greenbushes. It’s expected that capacity will reach 1.34 million tonnes of lithium concentrate per year once a second production facility at Greenbushes is completed in 2019.
Then, in September 2017, Albemarle announced the development of a new technology that would enable it to increase production at its lithium mine in Chile by as much as 125,000 metric tons of lithium carbonate equivalent each year. This technology will allow Albemarle to produce this excess without the need for further brine pumping. In light of this discovery, Albemarle has requested an increase in its lithium quota from Corfo.
3. FMC (NYSE:FMC)
Market cap: US$12.06 billion
FMC is the third-largest player on our top lithium-mining companies list. FMC operates its lithium business in the Salar del Hombre Muerto in Argentina. In October 2016, FMC signed a long-term lithium carbonate supply deal with Nemaska Lithium (TSX:NMX), wherein Nemaska would supply FMC with 8,000 metric tons of lithium carbonate per year, beginning in mid-2018.
The company’s latest quarterly report shows consolidated revenue of $646 million, a 3-percent increase from the same period a year prior. Of that amount, FMC’s lithium division reported $94 million in revenue, which is a 35-percent increase compared with the same quarter in 2016. The firm attributed the growth to higher volume due to its new hydroxide operations in China and higher market prices.
In early January 2018, FMC announced that it would be expanding production in Argentina over the next few years, with annual output expected to exceed 40,000 metric tons of lithium carbonate equivalent. The announcement also states that FMC will be moving towards separating its lithium business, with more information on these plans to be revealed in an upcoming 2018 earnings conference call.
4. Tianqi Lithium (SZSE:002466)
Market cap: US$9.27 billion
Lithium producer Tianqi Lithium is a subsidiary of Chengdu Tianqi Group, headquartered in China. The company is focused on advancing its entire lithium processing chain in regards to securing a large share of the lithium battery market. It is the world’s largest hard-rock-based lithium producer.
In 2012, Tianqi beat out Rockwood Holdings to take control of Talison Lithium, which controls the Greenbushes mine in Australia. However, it subsequently sold a 49-percent interest in Talison to Rockwood Holdings, which as mentioned is now owned by Albemarle. Tianqi paid $209.6 million for a 2.1-percent stake in SQM in September 2016.
Last June, Tianqi announced plans to expand Greenbushes. However, this news was met with a lawsuit from Global Advanced Metals, which claimed the expansion would “effectively waste its tantalum resource.” Tianqi responded by saing, “it’s not stopping us,” and plans to continue business as usual. In October, the firm revealed that its board had approved $300 million for a second-stage expansion of its Australian processing plant. This expansion is expected to double annual capacity to 48,000 tonnes.
5. Jiangxi Ganfeng Lithium (SZSE:002460)
Market cap: US$7.04 billion
Jiangxi Ganfeng Lithium is another important Chinese lithium producer that investors should be keeping an eye on. The company is China’s second-largest lithium producer, and like Tianqi, Ganfeng is also buying up interests in lithium companies outside of China. It owns a 14.7-percent stake in lithium junior International Lithium (TSXV:ILC), and in July 2015 it signed a memorandum of understanding for an offtake agreement with Australia’s Reed Industrial Minerals, owned by Neometals (ASX:NMT) and Mineral Resources (ASX:MIN).
In early January 2018, Ganfeng announced plans to invest RMB 277 million in a battery project to develop high-capacity lithium-ion battery technology. The project is expected to reach annual production of 600 MWh. A few days later, International Lithium announced a joint venture with Mariana Lithium, a subsidiary of Ganfeng. The two firms will be contributing an approved budget of US$17 million toward the ongoing exploration and evaluation work at the Mariana lithium brine project in Argentina.
Other lithium-mining companies
Aside from the world’s top lithium producers, a number of other lithium companies are producing alongside the giants. These include: Jiangxi Special Electric Motor (SZSE:002176), Sichuan Yahua Industrial Group (SZSE:002497), Galaxy Resources (ASX:GXY), Neometals (ASX:NMT), Orocobre (TSX:ORL) and Youngy (SZSE:002192)
This is an updated version of an article originally published by the Investing News Network in 2016.
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Securities Disclosure: I, Amanda Kay, currently hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Nemaska Lithium is a client of the Investing News Network. This article is not paid-for content.