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Albemarle (ALB) Expands Nevada Site to Boost Lithium Production

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Albemarle Corporation (ALB - Free Report) announced the expansion of its lithium production facility in Silver Peak, NV to increase domestic lithium production. There will also be an initiative to evaluate resources at Nevada like clay for the commercial production of lithium, which is an essential component for green mobility as well as a sustainable future.

Regionalizing of supply chain is becoming important with growth in demand for electric vehicles (“EV”) for better security and sustainability. The uptick in demand for domestic lithium supply will be backed by Albemarle’s investment in Silver Peak. Starting in 2021, the company plans to invest $30 million to $50 million to double the current production at Nevada by 2025, utilising the brine water rights to the fullest.

Moreover, Albemarle plans exploration of clay and assess technology to expedite the viability of lithium production from the clay resources available at Nevada. It is also finding ways to optimize extraction of lithium from its brine resources, including the ones located in the Clayton Valley.

The company is evaluating a process to streamline production of lithium hydroxide, which is used in EV batteries, through a Department of Energy-sponsored research project with Argonne National Laboratory.

Shares of Albemarle have surged 153.1% in the past year compared with 23.3% rise of the industry.

The company is expected to gain from its actions to boost its global lithium derivative capacity and synergies of the Rockwood acquisition. Its cost-saving actions are also expected to support margins. Albemarle is also committed toward boosting shareholders’ returns.

Albemarle, in November 2020, stated that it expects its performance for 2020 will to be drab on a year-over-year basis due to lower global economic activity stemming from the pandemic. The company expects net sales for 2020 between $3.05 billion and $3.15 billion. Moreover, adjusted EBITDA for the year is projected in the range of $780-$810 million. The company also expects to realize around $80 million of cost savings for 2020, up from its previous expectation of $50-$70 million.

 

Zacks Rank & Key Picks

Albemarle currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Fortescue Metals Group Limited (FSUGY - Free Report) , BHP Group (BHP - Free Report) and Impala Platinum Holdings Limited (IMPUY - Free Report) .

Fortescue has a projected earnings growth rate of 73.5% for the current fiscal. The company’s shares have surged 171.2% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BHP has an expected earnings growth rate of 49.16% for the current fiscal. The company’s shares have gained around 35.4% in the past year. It currently flaunts a Zacks Rank #1.

Impala has an expected earnings growth rate of 131.7% for the current fiscal. The company’s shares have surged around 28.9% in the past year. It currently sports a Zacks Rank #1.

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