SQM (NYSE: SQM), the world’s no. 2 producer of lithium, doesn’t seem worried about potential higher taxes for miners in Chile, as it is pushing ahead with planned expansion plans in the nation, which is also the world’s top producer of copper.
As the market is growing faster than expected, the company said it was fast-tracking existing expansion plans in Chile’s lithium-rich Atacama salt flat.
SQM’s new target is to reach 180,000 tonnes of lithium carbonate and 30,000 tonnes of lithium hydroxide in Chile by the end of 2022.
The Santiago-based company also plans to develop a 50,000-tonne lithium hydroxide joint venture project in Australia as demand for the electric vehicle battery metal soars.
“We saw strong demand growth for electric vehicles during the first quarter, more than double compared to last year, making us believe that annual demand for lithium chemicals could grow more than 30%,” chief executive Ricardo Ramos said in the company’s first-quarter earnings statement.
Soaring demand for lithium is fuelling prices for the commodity. MINING.COM’s EV Metal Index shows the metal use was up 12% in March, when compared to the same month last year, while total material deployed was up an impressive 94% month on month.
Lithium prices continued to recover, topping $10,000 per tonne in March for the first time since August 2019, and SQM said expects prices to keep climbing through the end of the year.
The Chilean company said its lithium sales volumes in the first quarter had jumped 180%, compared to the same period last year, on rising demand from the electric vehicle (EV) industry.
The miner noted it is expected that demand growth to boost its sales of lithium carbonate equivalent to more than 85,000 tonnes this year, compared to a 30% increase in 2020.
SQM shares are 14% down since the beginning of the year, but the stock has climbed more than 76% in the last 12 months, leaving the miner with a market capitalization of $12.2 billion.