SQM, one of the world’s top lithium miners, saw a near-tenfold rise in June quarter net profit, joining the likes of Albemarle, Pilbara Minerals, Allkem and IGO in showing there’s huge money to be made in lithium, no matter the starting point or production method.
SQM is a major brine-based lithium miner and fertiliser producer based in Chile, but with growing interests elsewhere, such as in WA where it partnering with Wesfarmers in the $1.9 billion Mount Holland lithium mine and lithium hydroxide processing operation expected to start operations from 2024.
SQM said net profit for the June quarter was $US859.3 million up from $US89.8 million a year earlier.
SQM’s revenue for the quarter more than quadrupled to $US2.60 billion.
EBITDA jumped to $US1.30 billion, from $US200 million a year earlier.
The miner reported $US1.85 billion in lithium sales in the second quarter, against $US163 million a year earlier.
For the six months to June, the company reported net profit of $US1.655.4 billion, up 940% from $US157.8 million in the June 2021 half.
Revenues of $US4.618 billion up 314% from $US1.116.5 billion a year ago.
“We believe lithium demand will grow at least 35% this year compared to last year,” SQM said in the filing to Chile’s stock exchange.
The company expects lithium sales of at least 145,000 tonnes this year, up from its previous forecast for 140,000.
The second quarter performance was after SQM reported a March quarter profit of $US800 million on a 59% increase in sales.
SQM and its competitor American-owned Albemarle Corp have major projects in the works in the Atacama salt flats, used to extract lithium from the ground through brine pools.
SQM’s shares have more than doubled over the past year, reflecting a boom in demand from an auto industry that has begun to pivot its manufacturing base toward EVs.
SQM CEO Ricardo Ramos said in a statement with the results, “These results were related to favourable market conditions related to fertilisers, iodine and lithium and decades of investment, hard work, R&D and know-how.
“We are close to reaching 180,000 metric tons of lithium carbonate capacity and as mentioned previously, we are not stopping there.
“Today, we are working to complete a lithium carbonate capacity of 210,000 metric ton of sought after, top quality, value-added product which will be produced right here in Chile. We remain committed to reducing our usage of brine and water through technology and continuous innovation.
“This new capacity will let us produce high value-added lithium products to power more than 5 million electric vehicles,” he added.
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Australian investors will find out how well local companies did in the year to June from riding the lithium boom.
Pilbara Minerals releases its full year results next Tuesday, Allkem will reveal its 2021-22 performance this Thursday, August 25, Mineral Resources on August 29 and IGO the day after that. Wesfarmers, meanwhile, releases its results with an update on Mount Holland next Friday.
