Eramet produces first lithium from Centenario plant in Argentina
Eramet becomes the first European company to produce lithium carbonate at an industrial scale.
Australia’s oldest listed investment firm is finding beaten-down lithium shares are starting to look like buys, with the sector’s downturn reminiscent of the hasty selling in healthcare stocks caused by weight-loss drug Ozempic, its top executive said.
Founded in 1928, Australian Foundation Investment Company (AFIC) manages A$9.3 billion ($6.1 billion) and is a top-20 shareholder in blue chips such as Macquarie Group and BHP Group.
AFIC increased its stakes in local healthcare companies CSL and ResMed after a mid-year sell off triggered by the potential impact of Ozempic and other weight-loss drugs, according to managing director Mark Freeman. Since then shares in both companies have rebounded.
The company had an A$728 million stake in CSL as of Dec. 29 and is its 12th largest shareholder, according to LSEG data.
With lithium stocks out of favour due to a sustained fall in prices of the metal used in electric vehicles, Freeman said AFIC is starting to look at the sector and last year bought a small position in diversified miner Mineral Resources, which produces lithium.
“It’s like the weight-loss drug thing, you’re starting to get a lot of negative news, the lithium price has come off, so it’s starting to look a lot more interesting to us now,” he said in an interview after reporting results for the half year.
AFIC reported a 16% return for 2023 versus 14% for the S&P/ASX 200 Accumulation Index. Both figures include the impact of dividend tax credits.
Profit after tax for the half-year ended Dec. 31 fell to A$150.1 million, down 8.3% from the previous year’s A$163.7 primarily due to the decline in dividends from BHP, Rio Tinto and Woodside.
($1 = 1.5225 Australian dollars)
(By Lewis Jackson; Editing by Muralikumar Anantharaman)
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