Lithium miner profits more than triple on demand for EV batteries

Lithium miner profits more than triple on demand for EV batteries

Chile’s SQM, the world’s second-biggest lithium producer, on Thursday reported a fourth-quarter net profit that more than tripled from a year earlier, beating estimates for rising demand and tight supplies for the white metal.

A scramble for lithium – which SQM extracts from brine from South America’s vast salt flats – has driven up prices in recent years. car Manufacturers want to produce more electric vehicles (EVs) to comply with more stringent climate regulations.

SQM posted quarterly net profit of $1.15 billion for the three months to December 31, 2022, beating the average analyst estimate of $1.14 billion polled by Refinitiv.

Revenue for the quarter also nearly tripled to $3.13 billion, pushing core earnings to $1.67 billion, beating the average estimate of $2.99 ​​billion.

chief executive recarRamos said he was “very pleased with the extraordinary results.”

The company said the profit was boosted by record sales volumes for lithium and its derivatives, which SQM ships mostly to Asia. Some sales anticipated this year were brought forward ahead of the expected end of Chinese EV subsidies, it said.

SQM increased lithium volumes 38% year-over-year to 43,000 tons in the fourth quarter, selling at a record average of $59,000 per ton. A year ago, lithium sold for just $14,600 a tonne.

In a separate statement, SQM said it planned to invest approximately $3.4 billion from 2023 to 2025, with a focus on expanding its Chilean lithium capabilities. The roadmap includes an investment of $1.2 billion for this year.

SQM said it expects its lithium capacity to grow from a forecast of 210,000 tonnes this year to 265,000 in 2025, as plants in southwestern Australia and China’s Sichuan come online.

SQM also sells iodine and said prices for the chemical used in X-rays also hit record levels in the fourth quarter, predicting higher sales volumes and prices this year as it looks to expand its capacity. Works.

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