Albemarle is the largest producer of lithium, a critical metal necessary for electric vehicles and other rechargeable batteries. Understanding the company’s approach to hard rock and DLE (direct lithium extraction) for both new and old lithium investors is essential to forecasting potential winners and losers. Albemarle operates mines in Australia, Chile and the only active lithium mine in the United States. What’s more, on July 31st, Patriot Battery Metals (TSXV: PMET) announced entering into a subscription agreement with respect to a private placement of approximately C$109 million in Patriot by Albemarle Corporation (NYSE: ALB).
Albemarle Invests in Canada and Targets Recycled Batteries to Boost Supply
So, Albemarle is hedging its bets by acquiring significant exposure in Canada as the race to bring on new supply continues. For investors, following Albemarle is necessary as they continue leading the global production industry. The company plans to bring another domestic lithium mine online by 2027 — Kings Mountain in North Carolina.
Matthew Hastings, group geologist for Albemarle, stated, “That concentrate will run about 6% lithium oxide, so the intent there is to produce that concentrate, that will be what we give to conversion facilities.”
That concentrate will likely end up in Albemarle’s soon-to-be-built $1.3 billion processing facility in South Carolina, turning it into battery-grade lithium hydroxide. The plant will support the manufacturing of 2.4 million electric vehicles annually and be able to process lithium from recycled batteries. Albemarle has more than a dozen processing plants across the world. And governments want in on the action. According to the company, Albemarle will have paid the Chilean government over $600 million in annual royalties in 2022.
Processing lithium from recycled batteries, like the copper and silver industry, will add a new supply channel to the sector. In effect, Albemarle ensures it continues to lead production, not just from raw materials in new mines, but from recycled batteries. For Albemarle, producing battery-grade lithium carbonate as cheaply as possible is what matters most. The same should be true for retail investors looking at new offerings.
