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Priscila Barrera
Australian Lithium Miners Post Quarterly Results as Fundamentals Remain Strong
After hitting all-time highs in 2021, lithium prices started to stabilise in 2022's first quarter.
China’s lockdown measures to battle COVID-19 have disrupted the supply chain and impacted domestic demand in recent weeks, but this is expected to be temporary, according to William Adams of Fastmarkets.
“The lithium market is very tight. We don't see that easing anytime soon,” he said during a recent webinar about risks in the battery metals market. “We think the underlying fundamentals and the trends are still very strong.”
During the third quarter of the financial year, Australian lithium miners continued to move ahead with their projects, and despite the increased volatility in the markets, many ASX lithium stocks saw share price gains as well.
Perth-based Pilbara Minerals' (ASX:PLS,OTC Pink:PILBF) production for the quarter was 81,431 dry metric tonnes (dmt), slightly down compared to the previous three months, but within guidance. The company said the main factor impacting output was higher COVID-19 cases, which resulted in staff and contractor shortages.
“COVID-19 has (and may continue in the near term) to cause operational delays, including staffing shortages for both shut-down and operating staff (mining and processing),” the company said in a statement. Even so, Pilbara has decided to maintain its production guidance in the range of 340,000 to 380,000 dmt.
During its fourth battery material exchange auction, the company saw the highest bid ever at US$5,650 per dmt for a cargo of 5,000 dmt of spodumene, showing the critical shortage in lithium raw material supply.
Western Australia-focused Pilbara, which owns the lithium-tantalum Pilgangoora operation, has partnerships with Ganfeng Lithium (OTC Pink:GNENF,SZSE:002460), General Lithium, Great Wall Motor Company (OTC Pink:GWLLF,HKEX:2333), POSCO (NYSE:PKX), CATL (SZSE:300750) and Yibin Tianyi.
Shares of Pilbara were trading at AU$2.53 on May 10, down 28.13 percent year-to-date, but up more than 100 percent compared to this time last year.
For its part, leading Australian lithium and iron ore miner Mineral Resources (ASX:MIN,OTC Pink:MALRF) saw its Mount Marion mine’s production reach 104,000 dmt during the quarter; it also shipped 94,000 dmt of spodumene concentrate. The company is maintaining its full-year production guidance at 450,000 to 475,000 dmt.
In April, Mineral Resources and partner Ganfeng agreed to optimise production and upgrade Mount Marion's processing facilities. Spodumene concentrate capacity at the operation is expected to increase from 450,000 dmt per year to 600,000 dmt annually.
“The decision to upgrade the plant reflects an expectation that the lithium market outlook will remain extremely strong for the foreseeable future,” the company said in a press release. A second stage increase, expected to be completed by the end of 2022, will see capacity rise further to reach 900,000 dmt.
Aside from Mount Marion, the company holds interests in Wodgina in partnership with another top producer — Albemarle (NYSE:ALB). The companies decided to restart Wodgina last year as a result of soaring global lithium demand. The mine produced its first spodumene concentrate on May 12.
“(We have) also agreed to review the state of the global lithium market towards the end of this calendar year to assess timing for the start-up of Train 3 and the possible construction of Train 4,” the company said. Each train has a nameplate capacity of 250,000 dmt of 6 percent product.
Mineral Resources’ share price was down 10.71 percent on May 10, trading at AU$52.71. That said, the stock is up 9.11 percent year-on-year.
During the March quarter, Argentina-focused Allkem (ASX:AKE,OTC Pink:OROCF) outlined its plans to increase lithium production threefold by 2026 and become a top three chemicals supplier.
In Western Australia, the company owns the Mount Cattlin mine, which produced 48,562 dmt of spodumene concentrate and shipped 66,011 tonnes in the March quarter.
“Strong conditions in the spodumene market are supporting advanced discussions for spodumene concentrate pricing in the June quarter of approximately US$5,000 per dmt SC6 percent CIF on sales of approximately 50,000 tonnes,” the company told investors in a note.
In Argentina, Allkem operates the Salar de Olaroz and is developing the Sal de Vida lithium brine. Additionally, in partnership with Toyota Tsusho (TSE:8015), Allkem is building a 10,000 tonne per year lithium hydroxide plant in Naraha, Japan. The company also owns the James Bay lithium pegmatite project in Canada.
On May 10, shares of Allkem were changing hands for AU$10.95, down 2.23 percent year-to-date, but up over 55 percent year-on-year.
Although its main focus is nickel, Independence Group (ASX:IGO) joined the lithium party last year after it bought a stake in Tianqi Lithium’s Australian assets. The companies, in joint venture, now control the majority of the biggest lithium mine in the world — Greenbushes.
Production at the mine was up 5 percent quarter-on-quarter at 270,464 tonnes of spodumene concentrate. By 2025, Greenbushes is expected to add around 800,000 tonnes per year to its output capacity.
IGO has seen its share price decline 4.63 percent year-to-date, trading at AU$11.34 on May 11. However, the stock is up 47.27 year-on-year.
Don’t forget to follow us @INN_Australia for real-time updates!
Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Australian lithium miners continued to move ahead with their projects during the year's third financial quarter.
CRU: Battery Metals in Focus, What to Watch in Pricing and Supply Chains
After 2021's big price increases for raw materials, all eyes are on what may happen next in the electric vehicle (EV) market ― the main driver of demand for battery metals such as lithium and cobalt.
EV sales had a stellar year in 2020, even as the world suffered through the brunt of the COVID-19 pandemic, and 2021 brought strong sales numbers as well.
“EV sales doubled last year alone, and we're expecting them to surpass 10 million this year,” Harry Fisher of CRU Group told the audience at the RIU Resources Round-Up in Sydney last week.
CRU Group is forecasting that EV penetration will reach 20 to 22 percent by 2026 ― that would translate to an additional 17 million in annual sales compared to today.
“Since 2017, we've had more than 50 percent annual growth for EV demand each year, and over the next 20 years EV battery demand will increase by more than 10 times,” Fisher said.
The analyst shared with the audience the main themes he believes will continue to be front and centre in discussions surrounding the battery metals industry.
“We've seen incredible price performance, particularly for lithium, and also for cobalt and nickel, in the last really 18 months, but even more so this year,” Fisher said. “I don't think many of us expected prices to go as high as they have gone, particularly for lithium and nickel.”
Lithium prices have increased north of 400 percent since 2021, with nickel prices on the London Metal Exchange reaching a historical high of more than U$100,000 per tonne earlier this year. These high levels have been hitting EV producers, many of which have increased prices.
“In the last week or so, we've seen that the battery producers' Q1 margins have fallen substantially, so they're really feeling the heat of this, and that is starting to have some tangible effects in the market,” Fisher said.
All in all, CRU is expecting prices to level off the current peak, but to remain strong in the medium term on the back of demand from the EV sector.
Another big theme to keep an eye on is the increasing regionalization of supply chains. Even though EV and battery makers in Europe and North America have made announcements about setting up gigafactories, there has not been a lot of movement in the upstream and the midstream parts of the supply chain.
Around 40 percent of lithium supply comes from South America, with another 45 percent coming from top-producing country Australia. For cobalt, 70 percent of supply comes from the Democratic Republic of Congo. But all that output ends mostly in China ― which controls over 70 percent of the midstream.
“That's obviously not ideal from a supply security perspective, but it also means the supply chains aren't particularly efficient from a cost perspective,” Fisher said. “Also, from a safety perspective, moving around battery chemicals, precursor batteries — it makes a lot more sense to have the upstream and midstream closer to market.”
With EV demand expected keep soaring, there’s a lot more that needs to be done to strengthen supply chains.
“We need to start seeing more investment to support the EV markets, and to prevent them from relying solely on China and Asia for all of their battery materials,” Fisher said.
Don't forget to follow us @INN_Australia for real-time news updates!
Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
At the recent RIU Resources Round-Up event in Sydney, Harry Fisher of CRU Group shared key factors battery metals investors should keep an eye out for.
Australia Battery Metals Update: Q1 2022 in Review
In the last few years, Australia has been positioning itself to take advantage of the green energy transition taking place globally, with plenty of projects focused on battery metals on the horizon.
Prices for raw materials essential to electric vehicle batteries have been on the rise since 2021, with many ASX mining companies in the lithium, cobalt and graphite sectors also posting gains year-to-date.
Here, the Investing News Network looks at what happened so far in 2022 and what could be ahead for Australia’s battery metals market in the second quarter.
Australia battery metals market: Price strength remains
The COVID-19 pandemic brought supply chain problems and uncertainty, disrupting markets globally. Two years later, the world continues to fight the pandemic, and a new set of lockdown measures in China is putting pressure on markets.
However, the economic recovery that started in 2021 as countries reopened will continue in 2022, but at a slower pace, with the overall outlook for Australia’s mineral exports remaining firm.
For battery metals, the first quarter of the year was strong, with lithium and cobalt seeing healthy price environments throughout the period.
Lithium has seen its price increase more than 126 percent year-to-date, with prices climbing more than 480 percent year-on-year, according to Benchmark Mineral Intelligence data.
The main demand driver for lithium and cobalt is the electric vehicle industry, which had a stellar 2021 worldwide, particularly in the US and Europe, but also in Australia. In 2021, sales in the country tripled between 2020 and 2021, jumping from 6,900 electric vehicles sold to 20,665. These sales have also led to an increase in market share from 0.78 percent to 2 percent, according to the Electric Vehicle Council of Australia.
As sales of electric vehicles climb, automakers have been looking for ways to secure supply of raw materials. That’s why it comes as no surprise that in Q1, Australian junior miners Liontown Resources (ASX:LTR) and Core Lithium (ASX:CXO) inked lithium deals with Elon Musk’s Tesla (NASDAQ:TSLA).
In fact, Musk recently said that the “fundamental limiting factor” for EV adoption globally is battery production, and more specifically lithium. With demand for battery metals expected to soar throughout the coming decades, all eyes are on where the supply to meet the needs of the growing EV industry will come from.
Australia hosts the world’s largest lithium mine, Greenbushes, and is also home to key producers, including Pilbara Minerals (ASX:PLS), Allkem (ASX:ALK) and Mineral Resources (ASX:MRL).
In Q4 2021, Australian spodumene concentrate output rose by 33 percent year-on-year, and further capacity coming on stream in 2022 is expected to result in greater increases in production.
In February, Perth-based Pilbara Minerals posted its first half year profit of AU$114 million on the back of a strong lithium market, with shipments of spodumene concentrate reaching 170,228 dry metric tonnes (dmt), compared with 114,239 dmt a year ago.
“The result reflects continued improvement in lithium market conditions over the period, which has continued its strong momentum into the current half,” the company said in a statement.
Pilbara Minerals, which owns the lithium-tantalum Pilgangoora operation, has partnerships with Ganfeng Lithium (OTC Pink:GNENF,SZSE:002460), General Lithium, Great Wall Motor Company (OTC Pink:GWLLF,HKEX:2333), POSCO (NYSE:PKX), CATL (SZSE:300750) and Yibin Tianyi.
Mineral Resources, in a joint venture with Ganfeng, saw Mt Marion’s spodumene concentrate total 207,000 tonnes in the second half of 2021. Meanwhile, the company’s Wodgina asset, which Mineral Resources is developing with Albemarle (NYSE:ALB), is expected to see its first spodumene production in the third quarter of 2022.
Greenbushes, which is operated by Talison Lithium, a joint venture between Albemarle and Tianqi-IGO (ASX:IGO), has three plants in operation that produced a total of 526,300 tonnes of spodumene concentrate in the second half of 2021.
Expansions in the next couple of years are expected to come primarily from South America, where a number of key producers, including Albemarle, SQM (NYSE:SQM) and Livent (NYSE:LTHM), have committed to increase supply.
Benchmark Mineral Intelligence senior analyst Daisy Jennings-Gray pointed out that while some lithium assets have been accelerated, potentially bringing extra supply to market in 2022, the project pipeline still faces delays, which underpins the widening deficit.
Going forward, based on current project announcements, Benchmark Mineral Intelligence expects this deficit to widen over the next couple of years as demand continues to outstrip supply. “However, a number of disruptors, such as novel technology breakthroughs, could ease this imbalance,” Jennings-Gray told INN.
Australia, the biggest lithium exporter in the world, is also eyeing the next step in the supply chain — with the production ramp up of two refineries expected between 2022 and 2023. In fact, the Office of the Chief Economist forecasts: "By 2024, Australia may have around 10 percent of global lithium hydroxide refining capacity, rising to 19 percent of global lithium refining by 2027."
Australia battery metals market: Cobalt hit by Russia-Ukraine war
Cobalt, another key battery metal, also experienced a spike in prices in 2021, doubling in value on the back of surging demand for electric vehicles.
During the first three months of 2022, cobalt's performance was mostly as expected, with strong demand continuing from battery markets and tight conditions persisting, Harry Fisher of CRU Group told the Investing News Network (INN).
“Russia’s invasion of Ukraine was of course the key shock which has tightened the screws further on the market,” he said. Russia is the world’s second largest producer of cobalt, with output reaching 7,600 tonnes in 2021, according to the US Geological Survey.
Availability of cobalt has been tight due to supply chain and logistical constraints since the second quarter of 2021, with the Russia-Ukraine conflict putting further pressure on supply.
“Downstream users, especially in Europe, are diversifying away from Russian material, considering logistical and payment challenges and the sustainability of doing business with companies based in Russia, even though there are no explicit sanctions on Russian cobalt or other battery metals, lithium and nickel,” Alice Yu of S&P Global Market Intelligence said.
Australia is currently the third-largest cobalt producing country in the world, after Russia and far behind leading producer the Democratic Republic of Congo.
There are currently four cobalt producing companies operational in Australia: Glencore (LSE:GLEN), BHP (ASX:BHP,LSE:BHP,NYSE:BHP), First Quantum Minerals (TSX:FM) and IGO, with Glencore being the dominant producer in the Australian market and the only company producing refined material. Moreover, there are a few cobalt companies developing projects that could help supply the battery market.
“There is expected to be significant growth in consumption, especially for cobalt chemicals, driven by growth in the battery sector and increased EV manufacturing,” according to a report by the OCE. “Mined cobalt production is expected to more than double by 2030 to meet the increase in demand, however this will require significant additional mine capacity to come online over that period.”
In the first quarter of the 2022 calendar year, Glencore made news headlines when it signed a cobalt supply agreement with US carmaker General Motors (NYSE:GM). The Anglo-Swiss company will provide GM with cobalt from its Murrin Murrin mine in Australia.
In other news, India and the Australian government announced that they will jointly put in $6 million for lithium and cobalt mine exploration in Australia over the next six months. During that period, due diligence processes and further investment decisions are expected to be made.
Australia battery metals market: What’s on the horizon
As the next three months of the calendar year unfold, investors interested in battery metals in Australia wonder what might be ahead for the country.
“Australia’s national export income and stock market will likely be jolted higher in Q2 and for the rest of the year, with the luckily commodity-rich country tipped to come out on top while the world braces for the big three Rs: record inflation, rising interest rates and a possible recession,” Jessica Amir, Australian Market Strategist at Saxo Markets, said.
Prices for lithium hit all-time highs in 2021 and are expected to continue to show strength as demand outstrips supply in the foreseeable future.
“Strong demand is currently resulting in shortages of spodumene, lithium hydroxide and lithium carbonate, which is pushing spot prices for all three commodities to record levels,” according to the Office of the Chief Economist. “Contract prices for spodumene are expected to increase strongly in 2022, driven by rising EV production and short term supply issues.”
This year, prices for spodumene are forecast to rise to an average US$1,300 per tonne, up from around US$660/tonne in 2021, while lithium hydroxide is expected to rise from US$17,970/tonne in 2021 to US$27,000/tonne in 2022.
In terms of Australia’s lithium production, output is projected to more than triple in the next five years, rising from 224,000 tonnes of lithium carbonate equivalent (LCE) in 2020 to 2021 to 692,000 tonnes of LCE in 2026 to 2027.
Meanwhile, Australia’s lithium export earnings are forecast to rise from AU$1 billion in 2020 to 2021 to AU$6.7 billion by 2027 (in real terms), as lithium hydroxide production rises. A further five lithium hydroxide refining operations are projected to start operations in the country by then.
Looking over to lithium stocks' performances, Saxo's Amir believes that in the long run, they are generally expected to be key beneficiaries of increasing demand for green energy. More directly, the ramp up in production of electric vehicles, driven by increased consumer uptake and government green subsidies, would have a hand in driving up lithium prices.
Despite this general trend, the analyst also believes that investors will need to look out for potential pitfalls when investing in lithium stocks.
“Often, the devil is in the details, and like all other commodities, location is key to determining whether a lithium producer holds supercharged prospects — factors such as mining geography, proximity to customers and mining majors are important things to look out for,” she said.
For cobalt, prices are expected to remain high in the next three months.
“They may start to adjust down slightly later this year if supply chains can start to normalize, although we are not anticipating a significant fall,” Fisher said. “Overall, the market is expected to be more balanced than in 2021 with further supply additions.”
A key trend investors continue to be interested in is the increased use of cobalt-free cathodes. Lithium-iron-phosphate (LFP) cathodes have been gaining market share, particularly in standard-range vehicles. In fact, Tesla said it used this type of cathode in nearly half of the models it produced in Q1.
“LFP has built market share in China through 2021 due to the popularity of mini EV models such as the Hongguang Mini ― but nickel-cobalt-manganese cathodes will hold ground for longer-range, larger and higher-performance vehicles,” Fisher said. “We expect that cobalt demand will remain robust for this reason despite LFP’s recent performance.”
Don’t forget to follow us @INN_Australia for real-time updates!
Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
What happened in the battery metals market in Australia in the first quarter of 2022? Find out here.
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Fraser Institute: Western Australia Ranks as Most Attractive Mining Destination
The Australian state of Western Australia has become the new top destination for mining investment, overtaking Nevada to claim first place, according to Canada’s Fraser Institute.
This year’s Annual Survey of Mining Companies ranks 84 jurisdictions around the world based on geologic attractiveness (minerals and metals), and government policies that encourage or deter exploration and investment.
Western Australia, which accounts for about 37 percent of the world’s iron ore production, moved up from fourth place in 2020 to lead the 2021 list; it's followed by the Canadian province of Saskatchewan, which climbed from third to second place, and Nevada in the US, which fell from the top place previously.
Rounding out the top 10 jurisdictions are Alaska, Arizona, Quebec, Idaho, Morocco, Yukon and South Australia.
In 2021, Western Australia’s resource industry achieved record sales of AU$230 billion and accounted for more than half of national goods exports, according to the Department of Mines, Industry Regulation and Safety.
Iron ore sales from the state surged to an unprecedented AU$157 billion given high prices and supply interruptions in competing markets. Meanwhile, the gold industry contributed to more than AU$16 billion in sales, underpinned by strong prices as economic and geopolitical uncertainty continued.
“Western Australia’s resources industry continued to deliver impressive results across key sectors and commodities, despite facing a challenging year,” Bill Johnston, the state's mines and petroleum minister, said in a statement. “(Its) remarkable range of critical and battery minerals, including lithium and nickel, will play a big part in our future success as the world transitions to clean energy.”
Lithium sales in Western Australia soared to an all-time high of AU$2.6 billion last year — a threefold increase — while nickel sales grew to AU$3.7 billion, the highest value since 2012.
In 2020 to 2021, investment in Western Australia’s mining and petroleum sector hit almost AU$21 billion, up from AU$19 billion in 2019 to 2020. Meanwhile, mineral exploration expenditure was AU$2.1 billion in 2020 to 2021 — that was its highest level since 2012, as well as a 21 percent increase from AU$1.7 billion in the preceding period.
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Securities Disclosure: I, Priscila Barrera, currently hold no direct investment interest in any company mentioned in this article.
Western Australia has climbed to first place in the Fraser Institute's annual report, up from fourth place the previous year.
Lake Resources Inks Lithium Deal with Ford, Shares Surge
Australia’s Lake Resources (ASX:KLE,OTCQB:LLKKF) kicked off the week by signing a deal with US carmaker Ford (NYSE:F) for a potential lithium offtake from the Kachi project in Argentina.
The non-binding memorandum of understanding is for approximately 25,000 tonnes per year of lithium, an essential raw material used in electric vehicle (EV) batteries.
“Both Lake and Ford see this as an opportunity for a potential long-term agreement with the ability to scale up environmentally responsible production and participate in Lake’s other projects to ensure high-quality lithium products are available to Ford,” Steve Promnitz, Lake’s managing director, said.
Ford’s move comes at a time when carmakers are trying to secure supply of lithium, which has seen its price increase over 480 percent in the past year. The Michigan-headquartered company expects half of its vehicles to be electric by 2030, and it’s looking to sell more than 2 million EVs worldwide by 2026.
“As we’ve shared, Ford is sourcing deeper into the battery supply chain,” said Lisa Drake, Ford’s vice president, EV industrialization, in Monday's (April 11) press release. “This is one of several agreements we’re exploring to help us secure raw materials to support our aggressive EV acceleration.”
Following the news, shares of Lake jumped more than 14 percent, climbing to AU$2.11 on Monday from a closing price of AU$1.85 this past Friday (April 8).
This is the second non-binding agreement for Kachi, which is expected to produce 50,000 tonnes per year, according to a 2022 definitive feasibility study. On March 29, Lake inked a similar deal with Japanese trading company Hanwa (TSE:8078) for 25,000 tonnes of lithium carbonate per year over a 10 year period. These two agreements further de-risk the project for financiers and investors.
Lake Chairman Stu Crow said that the offtakes, together with an indicative provision of debt finance for around 70 percent of the Kachi project’s capital requirements, provide a framework of support for Lake’s Target 100 program. The program's goal is annual production of 100,000 tonnes of high-purity lithium chemical by 2030.
Aside from its flagship Kachi project, Lake’s other projects include the Olaroz and Cauchari brine projects, which are located within the Lithium Triangle, where 40 percent of the world’s lithium is produced at the lowest cost.
The company’s technology partner is California-based Lilac Solutions, whose technology has been backed by the Bill Gates-led Breakthrough Energy Fund and the Engine Fund at the Massachusetts Institute of Technology.
Don’t forget to follow us @INN_Australia for real-time updates!
Securities Disclosure: I, Priscila Barrera, currently hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Lake Resources is a client of the Investing News Network. This article is not paid-for content.
The lithium junior saw its share price spike more than 14 percent following the news.
Australian Lithium Producers Post Half-year Results as Prices Soar
Lithium prices have been on the rise for the past year, hitting all-time highs in 2021.
Continued strength is expected with demand set to outstrip supply in the foreseeable future, and ASX-listed lithium producers are seeing revenue increases on the back of this strong market.
In 2022, prices for spodumene are forecast to rise to an average US$1,185 per tonne, up from around US$720 in 2021, while lithium hydroxide is expected to rise from US$7,300 per tonne in 2020 to US$18,940 in 2023, according to a December report from the Office of the Chief Economist.
“Contract prices can be expected to rise in the wake of the spot prices, which should boost production at operations using long-term contracts,” the organisation states in the document.
As a result of the increase in spodumene prices, Australia is forecast to see its export revenue from lithium rise from AU$1.1 billion in 2020/2021 to AU$3.3 billion in 2021/2022.
In late February, most Australian lithium miners reported their half-year results, with all sharing optimistic outlooks on the market as the year continues to unfold.
Perth-based Pilbara Minerals (ASX:PLS,OTC Pink:PILBF) posted its first half-year profit of AU$114 million on the back of a strong lithium market, with shipments of spodumene concentrate reaching 170,228 dry metric tonnes, compared with 114,239 dry metric tonnes a year ago.
“The result reflects continued improvement in lithium market conditions over the period, which has continued its strong momentum into the current half,” the company said in a statement.
Pilbara Minerals, which owns the lithium-tantalum Pilgangoora operation, has partnerships with Ganfeng Lithium (OTC Pink:GNENF,SZSE:002460), General Lithium, Great Wall Motor Company (OTC Pink:GWLLF,HKEX:2333), POSCO (NYSE:PKX), CATL (SZSE:300750) and Yibin Tianyi.
Shares of the Western Australian miner are up more than 170 percent year-on-year, but have declined by over 20 percent since the beginning of 2022.
Similarly, leading Australian lithium and iron ore miner Mineral Resources (ASX:MIN,OTC Pink:MALRF) has seen its share price fall more than 22 percent year-to-date. The company’s current lithium projects include Mount Marion, in joint venture with Ganfeng, and Wodgina, in partnership with another top producer — Albemarle (NYSE:ALB).
Mineral Resources posted a half-year loss, which it attributes to the steep fall in iron ore prices. In terms of its lithium assets, Mount Marion revenue was 207 percent higher than the previous corresponding period, hitting AU$67 million in earnings, reflecting a rebound in the lithium market, the company said.
Meanwhile, Wodgina is expected to see its first spodumene production in the third quarter of 2022; Mineral Resources is also looking to potentially increase its ownership in the mine to 50 percent from 40 percent.
Another ASX-listed lithium miner, Allkem (ASX:AKE,OTC Pink:OROCF), born from the merger of Orocobre and Galaxy Resources last year, delivered US$192.3 million in revenue for the first half of the year, including US$114.9 million from Mount Cattlin and US$65.6 million from Olaroz.
Shares of Allkem jumped about 10 percent after releasing these results, which came on the back of improved product prices, and are up 113 percent year-on-year. That said, shares are down over 13 percent year-to-date.
Allkem operates the Salar de Olaroz in Argentina and, in partnership with Toyota Tsusho (TSE:8015), is building a 10,000 tonne per year lithium hydroxide plant in Naraha, Japan. It also owns the Sal de Vida lithium brine and potash project in Argentina, with first production expected next year. Aside from that, the company has the Mount Cattlin mine in Western Australia, which is currently producing spodumene and tantalum concentrate, as well as the James Bay lithium pegmatite project in Canada.
Although its main focus is on nickel, Independence Group (ASX:IGO) joined the lithium party last year after it bought a stake in Tianqi Lithium’s (SZSE:002466) Australian assets. Through a joint venture the companies now control the majority of the biggest lithium mine in the world, Greenbushes.
Shares of Independence have not been hit as hard so far this year, down only 1.98 percent year-to-date, but are up over 70 percent year-on-year. The company’s revenue from continuing operations, which include its Nova nickel mine, increased 21 percent year-on-year to AU$378 million.
In 2021, many lithium companies saw impressive share price gains — and that was not only true in Australia, but also for lithium stocks on Canadian and US exchanges. So far, 2022 has seen volatility dominate, with uncertainty increasing in global markets due to inflation and following the recent Russian invasion of Ukraine.
All data was accurate as of March 1, 2022.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
In late February, most Australian lithium miners reported their half-year results, sharing the news in a market where prices for the commodity are on the rise.
