Chemicals maker, Albemarle ALB recently said that its Talison joint venture in Australia has approved the expansion of lithium concentrate production at its Greenbushes mine. Talison is a joint venture between Albemarle and Tianqi Lithium Corporation.
The expansion will more than double the lithium carbonate equivalent capacity at Greenbushes from 80,000 metric tons per year to more than 160,000 metric tons. Commissioning of the expansion is expected to start in second-quarter 2019.
Greenbushes – the world's biggest active lithium mine – has the largest hard rock lithium reserve. It also contains the highest concentration of lithium oxide available of any active mine.
The project is a key part of Albemarle’s lithium expansion plans geared at addressing the growing needs of its customers.
Albemarle remains focused on strengthening its lithium business. The company, earlier this year, also closed the acquisition of the lithium assets of Jiangxi Jiangli New Materials Science and Technology Co. Ltd. for roughly $145 million. The deal includes manufacturing assets and supporting business functions located in Jiangxi and Sichuan, China focused on making battery-grade lithium hydroxide and lithium carbonate.
The acquisition allows Albemarle to supply premium lithium salts to an expanded global customer base and accelerate the company’s ability to meet its goal of capturing 50% of the growth in the lithium industry.
Albemarle, in Sep 2016, also entered into a deal with Bolland Minera S.A. that provided the former exclusive exploration and acquisition rights to a lithium resource in Antofalla (within the Catamarca Province of Argentina), which could prove to be the biggest lithium resource in Argentina.
Moreover, Albemarle, in Jan 2017, agreed to amend its lithium production rights agreement with the Chilean Economic Development Agency to extend the term of the deal and increase the company's authorized lithium quota at its facility in the Salar de Atacama, Chile.
The amended agreement offers Albemarle with adequate lithium to make more than 80,000 metric tons of technical and battery grade lithium salts annually over the next 27 years at the company’s expanding battery grade manufacturing plants in La Negra, Antofagasta.
Albemarle’s shares have gained 72% over a year, outperforming the Zacks categorized Chemicals-Diversified industry’s gain of 19.3% over the same period, partly reflecting its forecast-topping earnings performance over the trailing four quarters.
Albemarle's adjusted earnings of 78 cents per share for fourth-quarter 2016 topped the Zacks Consensus Estimate of 75 cents. Revenues of $696.7 million also beat the Zacks Consensus Estimate of $599.8 million.
The company, in its fourth-quarter, call noted that its performance in 2016 and strategic initiatives have positioned it for strong growth in 2017.
Albemarle currently carries a Zacks Rank #2 (Buy).
Albemarle Corporation Price and Consensus
Other Stocks to Consider
Other well-placed companies in the chemical space include Univar Inc. UNVR, Kronos Worldwide, Inc. KRO and Sinopec Shanghai Petrochemical Company Limited SHI, all holding a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Univar has an expected long-term growth of 9.4%.
Kronos has an expected long-term growth of 5%.
Sinopec Shanghai has an expected long-term growth of 9.6%.
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Albemarle Corporation (ALB): Free Stock Analysis Report
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Zacks Investment Research
March 21, 2017 at 05:52PM
from Zacks Equity Research