The “hockey-stick” portion of the demand for lithium is barely getting started the company said. Demand for lithium totaled about 500,000 tonnes in 2021. Albemarle expects that to triple by 2025 and to reach 3.2 million tonnes by 2030. Electric vehicle (EV) production is expected to rise from 6.3 million units last year to 21.7 million in 2025 and 40.6 million in 2030.
In its presentation accompanying the earnings release, Albemarle estimated 2022 capital spending of $1.3 billion to $1.5 billion, up from $954 million in 2021. The company plans to continue paying its annual dividend of $1.58 (yielding 0.65%) and forgo any 2022 share buybacks. With a decent, if not outstanding dividend, Albemarle is going to have to continue showing share price growth from its planned investments in more production to accommodate all those new EVs that will hit the road.
Sociedad Química y Minera de Chile S.A. (NYSE: SQM) is typically referred to by its ticker and has a market cap of around $21.5 billion. SQM reported a year-over-year sales increase of 57.5% in fiscal 2021, and analysts are forecasting a jump of 96.5% in 2022. Per-share earnings rose 161% last year and are pegged to jump another 213% this year.
Over the past weekend, Chile’s constitutional assembly, which is currently rewriting the country’s constitution, rejected a proposal that would have given the government exclusive mining rights over a variety of minerals, including lithium. The mining industry, predictably enough, did not support the proposal. National copper miner Codelco produced 1.73 million metric tons of copper last year, the most of any copper miner in the world. Chile’s estimated copper reserves are the largest in the world at around 200 million tonnes, more than double the 93 million tonnes in Australia.
When SQM reports March quarter results (expected by the end of May), analysts expect a sequential revenue boost of 36.3% to $1.48 billion and a 33.7% sequential increase in EPS. Of 14 analysts covering the stock, eight have a Buy or Strong Buy rating and another four rate the shares at Hold. In addition to its outlook for share price growth, SQM pays a dividend yield of 2.61%.
Livent Corp. (NYSE: LTHM) was spun out of FMC in 2018 and currently has a market cap of around $4 billion. Since reporting March-quarter results last week, the company’s stock has been upgraded from Market Perform to Outperform at Cowen, which also raised Livent’s price target from $25.00 to $33.00.
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