Eramet produces first lithium from Centenario plant in Argentina
Eramet becomes the first European company to produce lithium carbonate at an industrial scale.
Miner and lithium supplier AMG Critical Materials on Wednesday cut its core profit guidance for 2024, as it expects a bigger hit from “unprecedented”, “unsustainable” low prices of lithium and vanadium.
The group now expects adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of around $130 million for the full-year compared with $200 million it expected previously.
The cut was due to lower prices of metals used in batteries, lithium and vanadium, with profits from each expected to drop this year by $60 million and $10 million respectively.
AMG has been betting on lithium production and is developing its supply chain of the key metal for electric vehicle (EV) batteries but glut of global inventory has weighed on prices.
The group also plans to reduce headcount by around 200 full-time employees as part of its ongoing cost reduction program, around 5.6% of its staff.
The reductions will be offset by new hires at sites in Germany and Brazil as the group ramps up expansion of its two main lithium projects, and growth in its LIVA batteries and engineering businesses, it said. AMG expects staffing in 2024 to be unchanged from last year.
AMG also plans to spend around $125 million in 2024, mainly on these two plants, while it is reviewing its resource development and all other expansion activities.
“Our benchmark is our own low cost production in Brazil and we do not want to dilute that. So each of the resource projects is being reviewed whether it meets that standard another time… We are sort of more selective than we have been before, the group’s CEO Heinz Schimmelbusch said in a call.
For 2023, the group posted EBITDA of $350.5 million, against guidance of around $320 million.
This was helped by a one-off $10 million dividend from a minority investment, an extra $6 million benefit from the US Inflation Reduction Act (IRA) tax law, and variances in lithium concentrate in the shipping schedule, the group said.
Its vanadium unit should continue to receive at least $6 million subsidy every year under the IRA, as “it would require a new law from Congress to cancel it,” AGM added.
(By Dagmarah Mackos; Editing by Philippa Fletcher)
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