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Livent to Obtain US$198 Million Prepayment from GM, Ups Steerage on Larger Lithium Pricing

Lithium miner Livent (NYSE:LTHM) inked a long-term lithium provide cope with Common Motors (NYSE:GM) final week, with the carmaker set to prepay US$198 million to the corporate.

The six yr settlement will see Livent provide lithium hydroxide to GM beginning in 2025, with the upfront cost anticipated to be acquired later this yr.

“By making the superior cost, they’re clearly giving us the dedication that we have been on the lookout for,” Paul Graves, president and CEO of Livent, stated at a Tuesday (August 2) convention name concerning the firm’s Q2 outcomes.

The transfer by GM, which is aiming to supply 1 million electrical autos (EVs) yearly in North America by 2025, exhibits the rising want for automakers to safe long-term provide of lithium.

“The challenges are rising for the lithium business to develop battery-grade lithium hydroxide and carbonate provide sufficient to maintain up with vital annual demand will increase,” Graves added. “In consequence, auto OEMs have gotten extra targeted on securing dependable lithium provide to assist their very own aggressive electrification plans.”

Livent launched its second quarter outcomes on Tuesday, displaying that income hit US$218.7 million, up 114 % year-on-year. Adjusted earnings earlier than curiosity, taxes, depreciation and amortization (EBITDA) have been US$95 million, about six occasions greater than the prior yr.

“Lithium demand was exceptionally robust by way of the primary half of 2022. Revealed lithium costs in all types moved greater within the second quarter amid tight market situations,” Graves stated. “We proceed to realize greater realized costs throughout our complete product portfolio.”

Final yr, lithium costs climbed on the again of robust demand from the EV business. To this point in 2022, costs have elevated greater than 123 %, in keeping with Benchmark Mineral Intelligence knowledge.

Because of improved pricing, the lithium firm has as soon as once more revised its forecast income, which is now anticipated to be within the vary of US$800 million to US$860 million for 2022; its adjusted EBITDA is anticipated to span from US$325 million to US$375 million.

The Argentina-focused firm stays on observe to ship on all its beforehand introduced capability expansions. The primary 10,000 metric ton enlargement of lithium carbonate in Argentina can be mechanically full by the tip of 2022, and in business manufacturing by the primary quarter of subsequent yr. Moreover, the 5,000 metric ton enlargement at Bessemer Metropolis can be accomplished by the third quarter of 2022 and in business manufacturing by This autumn.

By the tip of subsequent yr, Livent is anticipating so as to add one other 10,000 metric tons of lithium carbonate capability in Argentina — this may almost double the corporate’s lithium carbonate capability from 2021 ranges.

Lithium hydroxide capability can also be forecast to extend, because the miner stated it expects so as to add one other 15,000 metric tons of lithium hydroxide capability at a brand new location in China by the tip of 2023.

Livent additionally owns 50 % of Nemaska Lithium, which is anticipated to finish all remaining work on its building plan by the tip of the third quarter of this yr. First manufacturing from the Quebec venture, which has 34,000 metric tons of nameplate capability for battery-grade lithium hydroxide, is anticipated within the second half of 2025.

Philadelphia-based Livent operates its lithium enterprise within the Salar del Hombre Muerto in Argentina, the place it has been extracting lithium for greater than 20 years. The lithium carbonate produced serves because the feedstock for the corporate’s downstream lithium hydroxide manufacturing. Livent can also be presently producing certified battery-grade lithium hydroxide in each the US and China.

The corporate’s share value jumped virtually 7 % following its Q2 outcomes, up virtually 30.37 % year-on yr. Different US, Canadian and Australianlithium shares have additionally seen year-to-date good points.

As of 12:00 p.m. EST on Wednesday (August 3), shares of Livent have been buying and selling at US$25.93.

Remember to observe us @INN_Resource for real-time updates!

Securities Disclosure: I, Priscila Barrera, maintain no direct funding curiosity in any firm talked about on this article.


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