Albemarle Wrestles with Weakening Lithium Trends as Mines Ramp Up

Researched by Industrial Info Resources (Sugar Land, Texas)--Executives at Albemarle Corporation (NYSE:ALB) (Charlotte, North Carolina) are optimistic about the long-term potential for lithium and its byproducts, but voiced concern about a recent weakness in prices and softening demand for electric vehicles (EVs), a crucial part of the rationale for developing high-value projects to extract and process lithium. Industrial Info is tracking nearly $6 billion worth of active and planned projects from Albemarle worldwide, including more than $2.2 billion worth in North America.

Click on the image at right for a graph detailing active and planned projects from Albemarle, by project type.

Assuming recent trends in lithium market pricing will continue through the end of the year, Albemarle now anticipates net sales will total between $9.5 billion and $9.8 billion for 2023, down from the previous range of $10.4 billion to $11.5 billion. Albemarle's capital-expenditure guidance for 2023 remains at $1.9 billion to $2.1 billion, in line with previous forecasts.

"Based on current market prices, we have revised our 2023 outlook, which still contemplates an increase in net sales between 30% and 35% year-over-year," said Kent Masters, the chief executive officer of Albemarle, in a recent earnings-related conference call. "We remain bullish about Albemarle's long-term growth, our role in enabling a more resilient world and our strategy to deliver enduring value."

Earlier this year, Albemarle announced it would develop a lithium hydroxide "Mega-Flex" facility in Chester County, South Carolina. The complex is designed to process diverse lithium feedstock, including lithium from recycled batteries, into about 50,000 metric tons of battery-grade lithium hydroxide from multiple sources, with the potential to expand up to 100,000 metric tons. Albemarle says the Mega-Flex facility would support the production of an estimated 2.4 million EVs annually. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can read detailed reports on the proposed plant and its possible expansion.

Another project in its preliminary stages, the restart of a lithium mine in Kings Mountain, North Carolina, was boosted by a recent agreement with Caterpillar Incorporated (NYSE:CAT) (Deerfield, Illinois). Albemarle aims to revive the 2.7 million-ton-per-year open-pit operation to produce 350,000 tons per year of lithium spodumene concentrate, which would be used to produce up to 50,000 tons per year of lithium carbonate equivalent. Subscribers can learn about more, including a proposed flotation concentrator at the facility, in a detailed project report.

"During the quarter, we signed agreements with Caterpillar to collaborate on solutions to support the full circular battery value chain and sustainable mining operations," Masters said in the conference call. "As part of the partnership, we will purchase an all-electric mining fleet for Kings Mountain and make our North American-produced lithium available for use in Caterpillar battery production. We will also explore opportunities to collaborate with Caterpillar on [the research and development] of battery-cell technology and recycling techniques."

Masters later said Albemarle received a $90 million grant from the U.S. Department of Defense during the third quarter to purchase a fleet of mining equipment for the Kings Mountain restart.

Albemarle already is in the process of nearly doubling production of lithium carbonate at a mine in Silverpeak, Nevada, to about 10,000 tons per year. The expansion, which has been underway since second-quarter 2022, includes the debottlenecking and optimization of existing systems. Subscribers can read detailed reports on the mine expansion and its related pond overhauls.

Bromine, another crucial product Albemarle extracts from the ground, also is set to see more development through the two-phase expansion and modernization of a complex in Magnolia, Arkansas, which started in the spring of 2022 and is expected to run through the end of next year. Albemarle is modernizing the facility's brinefield, brine plant and key pipelines and is developing technology to extract lithium from the same brine. Subscribers can read detailed reports on the Magnolia South and Magnolia West expansions.

"We have a broad [research and development] program, and extracting lithium and converting lithium to salt and other materials is the big part of that," Masters said in the conference call.

Subscribers to Industrial Info's GMI Project Database can click here for a full list of detailed reports for projects mentioned in this article, and click here for a full list of related plant profiles.

Subscribers can click here for a full list of reports for active and planned projects from Albemarle.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).