Albemarle to kick off Kemerton expansion in 2021

Albemarle's Greenbushes mine (pictured) will supply lithium concentrate to the Kemerton plant.

American lithium producer Albemarle is expecting to commission the expansion of the Kemerton lithium plant in Western Australia next year, with sales production starting in 2022.

The development of the project, along with the La Negra mine in Chile was slowed down earlier this year due to the COVID-19 pandemic but Albemarle said it was planning for a “wave of operational improvements” with the $80 million saved in costs this year.

Albemarle anticipated that its 2020 performance would be lower compared with the previous year due to COVID-19 interruptions but noted that its plants have continued to operate without material impact.

During the September quarter, the company achieved net sales of $265 million of lithium, which was $64.7 million lower than the corresponding 2019 quarter.

This was due to lower contract and market pricing for the battery metal, reflecting battery-grade price adjustments that were agreed to during late 2019.

In the December quarter, Albemarle anticipates the adjusted earnings before income tax, depreciation and amoritisation (EBITDA) to be up between 10 and 20 per cent as customers continue to meet planned volume commitments.

Albemarle also expects volumes to be relatively flat as plants are effectively sold out due to the volume constraints.

Chief executive officer Kent Masters said despite the drop from 2019, Albemarle still reached sales in the upper end of its outlook range for the period.

“Our performance was driven by operating teams committed to running our businesses safely and efficiently in the face of pandemic-related economic weakness and to our successful sustainable cost savings initiative,” Masters said.

“We now expect to realise approximately $80 million of cost savings this year and to reach an annual savings rate of $120 million or more by the end of 2021.”

Once fully operational, Kemerton is expected to have an initial capacity of about 50,000 tonnes of lithium carbonate equivalent (LCE) with the ability to expand to 100,000 tonnes over time.

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