Arcadium looks beyond EVs in plan to double lithium output by 2028

Arcadium Lithium PLC plans to more than double its lithium output by 2028 and grow its ability to feed markets outside of electric vehicles.

While S&P Global Mobility forecasts China's EV production to rise through 2028, cooling demand for EVs and abundant lithium supply are driving a prolonged market downturn for the critical mineral.

Despite the current downturn, Arcadium plans to boost lithium production over the remainder of the decade as demand is still growing at 20% a year, including from sectors not often associated with driving demand for the metal, CEO Paul Graves said at the company's inaugural 2024 investor day in New York on Sept. 19.

Paul Graves, CEO of Arcadium Lithium. Source: Arcadium Lithium.

"We are not fully dependent on lithium carbonate or on electric vehicle applications. Our products are used in a much more diverse set of applications than almost any other lithium company. ... There are a number of customers that we sell multiple different lithium products to and have done so for many, many years," Graves said.

"We have almost 75,000 [metric] tons of lithium carbonate equivalent [LCE] production capacity today, all in Argentina," Graves said. "But by 2028, the completion of our four existing projects, which collectively fall under the 'wave one' expansion plans will increase that capacity to 170,000 metric tons per year of LCE."

Arcadium's second wave of expansions, which will begin as the first wave wraps up, will add "at least a further 125,000 [metric] tons of production capacity," the CEO said, allowing Arcadium to "grow faster than the market as a whole."

Flexibility for additional markets

Arcadium's two operating brine assets, Fenix and Olaroz in Argentina, produce battery-grade or technical-grade carbonate, which go either to global customers for battery and nonbattery applications, or to feed its downstream hydroxide network in the US, Japan and China, COO Barbara Fochtman said at the investor day.

Arcadium also has additional brine resources under development at Cauchari and Sal de Vida in Argentina, and hard rock resources under development at Whabouchi and Galaxy in Quebec.

"Hydroxide continues to be one of the most challenging parts of the lithium market," Fochtman said. "If converting carbonate into hydroxide no longer made economic or strategic sense, we would simply choose to sell carbonate."

Arcadium's lithium hydroxide network spans across four locations and seven individual operating lines, with two more lines at its 50%-owned Nemaska Lithium Inc. in Quebec to be added as part of its first wave of expansions, Graves said. Arcadium also operates a lithium chloride processing plant in Argentina, a high-purity metal production facility in the US and three butyllithium plants in the UK, the US and China.

The market for nonbattery applications is "relatively small, with most of the material going into high-performance greases," Fochtman said.

However, Arcadium is still "one of the largest producers of butyllithium and other specialty organic products, with about 75% of the material going into polymers for a wide range of industrial end markets such as high-performance tires, while 25% goes into synthesis processes for agrochemicals and pharmaceuticals," Fochtman said.

All of the company's spodumene concentrate is currently produced at Mt Cattlin in Western Australia — which will go into care and maintenance by mid-2025 — and sold directly to Chinese customers. In the near future, Arcadium's Canadian operations will produce spodumene concentrate, to be converted into lithium hydroxide at a dedicated facility in Quebec, Fochtman said.