Tianqi Lithium returns to annual profit thanks to battery boom

It cited capacity expansions by battery manufacturers, higher lithium product prices and sales volumes, and improved investment income from miner Sociedad Quimica y Minera de Chile as reasons for the result. The official figures are likely to be released in late April.

Chinese lithium carbonate prices have been on a tear, jumping by almost a third this year after surging more than 400% in 2021. The global push toward an electrified transport fleet has fired up consumption of the battery material and supplies are struggling to keep pace. 

The resurgence in demand helped Tianqi make a profit for three quarters in a row last year, after suffering seven consecutive quarterly losses. It made a 1.8 billion yuan loss in 2020 amid debt repayment pressures that forced it to sell part of its stake in the Greenbushes mine — the world’s largest lithium project — in Western Australia.

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First-quarter earnings should continue to be supported by higher lithium carbonate prices, Daiwa Capital Markets analysts Dennis Ip and Leo Ho said in a note. However, Tianqi will likely see a sharp increase in the cost of spodumene — a lithium-bearing raw mineral — under an annual price adjustment mechanism, they said.

Tianqi, whose shares already trade in Shenzhen, is reviving a plan to list in Hong Kong. The lithium supplier is working with China International Capital Corp., Morgan Stanley and CMB International on a share offering that could take place as soon as mid-2022 and may raise $1 billion to $2 billion, people familiar with the matter said earlier. 

Shares of the company rose as much as 6.8% on Thursday in Shenzhen.

(By Annie Lee)