Santiago, Chile — Chile's SQM is racing to expand lithium production despite a sharp drop in prices, CEO Ricardo Ramos said Thursday.
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"I want to be clear we are the lowest cost producer and will expand and will continue moving as fast as we can," the executive told analysts on a conference call.
The company is currently ramping up production from a recent capacity expansion to 70,000 mt/year of lithium carbonate and aims to complete a second expansion to 120,000 mt/year in late 2021.
Meanwhile, it has begun an engineering work on a third expansion to 160,000 mt/year, scheduled to come online by the end of 2023.
Ramos said that the expanded lithium carbonate capacity is now running at close to full capacity and is expected to produce more than 70,000 mt next year when the company plans to sell 65,000 mt.
"We want to continue to expand capacity every two years by around 40,000 mt/year," Ramos said.
Despite booming demand for lithium from the growing electric vehicles industry, prices have fallen sharply since last year as new mines, mostly in Australia, come into production.
SQM's profits fell 39% to $151 million in the first six months of the year largely on lower lithium prices.
Ramos said that SQM sold lithium products at a lower average price in the second quarter of the year and prices are expected to average around $10,000/mt during the third quarter.
Change to Chinese government subsidies for electric vehicles is likely to reduce lithium demand there by around 3,000-4,000 mt this year, he said.
But he dismissed claims that the lithium carbonate prices had fallen to as low as $6,000/mt.
"We are not selling at $6,000/mt in China today," Ramos said.
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