Booming prices set up strong year ahead for Allkem
Brisbane based lithium company Allkem has produced a post-merger $US12.9 million ($A17.9) profit for the December half year.
The company, which merged with Galaxy Resources to become the fifth largest lithium producer in the world, said its underlying net profit was about $US57 million.
Its March quarter pricing was up 111 per cent and it had “robust” customer demand.
Its 2022 production forecast was for between 200 and 210 dry metric tonnes with costs of $US400 to $US430 a tonne FOB.
It said demand was outstripping supply which was placing upward pressure on prices.
“Global weighted average prices for lithium carbonate and lithium hydroxide in January 2022 increased by 402 per cent and 297 per cent respectively,” the company said.
“Current spot pricing exceeds forecasts and market researchers are forecasting long-term price growth.”
Managing director Martin Perez de Solay said that post-merger the company achieved record revenue which had been the result of strong prices and meeting customer demand.
The result only includes the resources from Galaxy from August.
The company still holds $US449 million in cash.
“Amid surging demand for lithium products and continued challenges arising from the Covid-19 pandemic, our team also achieved significant advancements at all of our development assets across the globe with both Olaroz stage 2 and Naraha on the cusp of commissioning this year,” he said.
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“With two revenue generating operations and a healthy balance sheet we are in a strong financial position to advance Sal de Vida and the development of James Bay.”
