Strong lithium prices boost Albemarle’s 2017 earnings

By Michael Greenfield
Published: Thursday, 29 March 2018

Albemarle plans continued growth in 2018 after raising earnings by 17% last year.

Higher lithium prices were a key driver behind a 17% year-on-year increase in earnings before interest, taxes, depreciation and amortization (Ebitda) at Albemarle Corp in 2017 to $885.5 million.

Albemarle’s lithium business grew by 56% in 2017 from the previous year, contributing $137 million to its Ebitda figure in the fourth quarter alone, the producer said.

Industrial Minerals assessed the spot prices of lithium carbonate min 99.5% Li2CO3 battery grade, DDP Europe and United States,* at $17.50-19.50 per kg on February 22 this year. This was up from $13.00-17.50 per kg on August 17 last year.

"We made progress on our lithium capital projects consistent with our plans," Albemarle chairman, president and chief executive office Luke Kissam said.

An expansion project at the Greenbushes spodumene mine in Australia is scheduled to come on stream in the second quarter of 2019. Greenbushes is owned by the Talison Lithium joint venture which Albemarle has with Chinese producer Tianqi Lithium Corp.

This will increase production of lithium carbonate equivalents (LCEs) to more than 160,000 tonnes per year from 80,000 tpy at present.

"Our goals for 2018 are clear: deliver the cash flow needed to fund growth, and execute on our capital plan to meet the increasing needs of our customers," Kissam said.

The company is also planning to increase its production in Chile to 80,000 tpy of LCEs by 2020.

Demand remains strong for lithium concentrates, primarily due to the lithium-ion battery boom that is being exacerbated by tight supply and a lack of processing capacity.

Albemarle expects net sales of $3.2-3.4 billion and adjusted Ebitda of $955 million-1.005 billion this year, it added.

The company is active in the lithium and bromine markets and has lithium production sites across North America, South America and Australia.

*All lithium carbonate and hydroxide prices are available in the Industrial Minerals’ Battery Price Report. Lithium technical and industrial grade prices are available on the Industrial Minerals Pricing Database.