CAPITAL MARKETS

WA labour shortage further delays Kemerton

US lithium major Albemarle Corporation has increased its full-year earnings and cost guidance and reported a net loss due to a recent arbitration decision.

Staff reporter
WA labour shortage further delays Kemerton

The US-based lithium and specialty chemicals company lifted adjusted EBITDA guidance, from US$810-860 million to $830-860 million, based on a strong third quarter which has seen lithium prices continue to rise.

Capital expenditures for the year were revised higher, from $850-950 million to $925-975 million, due to accelerated investments in growth, tight labour markets and COVID-related travel restrictions in Western Australia, Albemarle said.

The company made progress on its Wave 3 lithium expansion projects but said "ongoing labour shortages and pandemic-related travel restrictions in WA" would further delay the finish of the Kemerton lithium hydroxide plant south of Perth.

It said Kemerton I was on track to complete construction by year-end but Kemerton II was now expected to be completed in the second half of 2022, rather than the March quarter.

The two 25,000tpa modules are part of the company's joint venture with Mineral Resources, with the pair announcing last week they would restart their Wodgina hard rock lithium mine in the Pilbara which was mothballed two years ago due to weak market conditions.

Albemarle also recently acquired a lithium converter in China and entered agreements regarding building two new lithium hydroxide conversion plants in China, each initially targeting 50,000tpa.

CEO Kent Masters said the investments would "provide high-return growth opportunities aligned with the increasing demand from our customers".

Albemarle reported an attributable net loss of $392.8 million for the third quarter, which included a $657.4 million charge related to the recent arbitration decision on a dispute regarding Huntsman's acquisition of Rockwood's Pigments & Additives business in 2014.

Albemarle said it was a legacy dispute it had inherited when it purchased Rockwood in 2015, acquiring assets unrelated to the Huntsman dispute to make it a lithium market leader.

Albemarle had said on Friday it was "shocked" by the arbitration panel's decision, which awarded Huntsman more than $600 million.

It said yesterday it continued to assess its legal rights and options but was now in talks with Huntsman.

The company ended the quarter with estimated liquidity of $2 billion, including $595 million in cash and equivalents.

Adjusted diluted earnings per share of $1.05, which excluded a $4.29 per share charge for the arbitration decision, was above analysts' expectations of 77c.

Albemarle shares are up 180% over the past 12 months in New York and closed up 0.7% overnight to $261.95, valuing the company at $30.6 billion.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining News Intelligence team.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining News Intelligence team.

editions

Mining Journal Intelligence Investor Sentiment Report 2024

Survey revealing the plans, priorities, and preferences of 120+ mining investors and their expectations for the sector in 2024.

editions

Mining Journal Intelligence Mining Equities Report 2023

Access an exclusive, inside look on the quarterly mining IPOs and secondary raisings data and mining equities performance tables with an annual Stock Exchange Comparisons supplement.

editions

Mining Journal Intelligence World Risk Report 2023 (feat. MineHutte ratings)

A detailed analysis of mining investment risks across 121 jurisdictions globally, built on 11 ‘hard risk’ metrics and an industrywide survey.

editions

Mining Journal Intelligence Global Leadership Report 2023: Social licence

Gain insights into social licence trends and best practices from interviews with 20+ top mining company executives and an industrywide survey.