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Friday, November 20, 2020 - 3:27:21 PM
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Mining News Pro - SQM, the biggest lithium producer after Albemarle, is moving ahead with plans to more than double capacity in a bet that accelerating electric-vehicle demand will tighten an oversupplied market for the battery metal.
Reporting lower-than-expected third-quarter earnings and forecasting flat lithium prices this quarter, the Santiago-based company said its board approved an expansion as part of a $1.3-billion investment plan through 2024.
SQM is looking past the current lithium supply glut that has pushed down prices. In what BMO Capital Markets calls a volume-over-price strategy, the company wants to grow its market share and capitalise on a recovery when demand growth outpaces supply of the key rechargeable battery ingredient as part of a global energy transformation.
Soc. Quimica & Minera de Chile, as the company is known formally, expects lithium sales of 60 000 metric tons this year to increase by 30% next year, it said in an earnings statement late Wednesday.
In terms of lithium carbonate capacity, SQM will expand to 120 000 t from 70 000 t by the end of next year, while its hydroxide capacity will increase to 21 500 t. Its board approved taking carbonate to 180 000 t and hydroxide to 30 000 t by 2023. Right now, it’s producing at a rate of 75 000 t/y.
As part of the investment plan through 2024, SQM will also boost mining capacity for iodine nitrates, develop a seawater pipeline and introduce sustainability measures to halve its use of brine and reduce water use by 40% by 2030.
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