SQM, the world’s No.2 lithium producer, said on Thursday it hoped to soon double its goal of expanding production of lithium hydroxide from 30,000 to 60,000 tonnes as demand for the electric vehicle battery metal soars.
CEO Ricardo Ramos said in a call with analysts that the company’s already announced intentions to expand production capacity to 30,000 tonnes of lithium hydroxide was “not enough.”
He said the company now had the technology to produce “very low cost” and “high quality” product.
The company posted record lithium sales in the last quarter of 2020, although floundering prices for the ultralight metal continued to weigh on the company´s profits.
After the coronavirus pandemic dented earnings last year, SQM and peers like Albemarle are expected to cash in on surging demand for battery metal lithium.
SQM said its lithium sales volumes in the fourth quarter jumped 50% from the previous quarter, hitting a three-month record of more than 25,000 tonnes. But prices stagnated at $5,300 per tonne, the company said, leaving net income on par with the same quarter of 2019.
“We believe that this could be the bottom of the decreasing pricing trend and that we could see higher prices during the first half of 2021,” the company said in a statement.
The company added that booming growth in electric vehicle sales in the fourth quarter of 2020 was fueling optimism for higher prices and volumes in the coming months.
“We expect this momentum to continue into 2021 and believe that lithium demand growth will reach almost 25% this year,” the company said.
SQM last month announced it would go forward with its Mt. Holland lithium project in Western Australia, a joint venture with Wesfarmers Ltd. The project is expected to come online by the second half of 2024, with an initial production capacity of 50,000 tonnes of battery grade lithium hydroxide.
The company said it produced more than 70,000 tonnes of lithium carbonate from its operations in Chile´s Atacama salt flat in 2020.
(By Dave Sherwood; Editing by Jane Wardell)