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Jan 7 (Reuters) - Albemarle Corp said on Thursday it will double production at its lithium facility in Silver Peak, Nevada, part of a plan to boost supply for the burgeoning electric vehicle (EV) market.
Government mandates and rising concerns about climate change have increased demand for EVs and for the ultra-light battery material lithium. Albemarle expects its Nevada expansion to help supply the U.S. market.
Already the world’s largest lithium producer, Albemarle plans to invest between $30 million and $50 million to double production at the Nevada site by 2025. The company also produces lithium in Chile and Australia.
This would expand the operation, which produces lithium from brine extracted from the Clayton Valley basin, to 10 kilo tonnes (kt) of lithium carbonate equivalent from 5 kt, BMO Capital Markets analyst Joel Jackson said in a note.
“The motivation would seem clearly to be to bulk up its U.S. operations as lithium and EVs become of more strategic importance this decade, particularly perhaps under the new green-friendly Biden administration,” Jackson said.
Albemarle’s stock rose 4.5% to $183 in morning trading. The stock has more than doubled in the past year.
The company is the only U.S. lithium producer, although Standard Lithium Ltd, Piedmont Lithium Ltd, ioneer Ltd and others are working to bring projects online.
President-elect Joe Biden has promised to make tackling climate change one of the pillars of his incoming administration, a plan that includes rapid promotion of EV technologies.
Charlotte, North Carolina-based Albemarle said it will also begin a program to evaluate clays and other available Nevada resources for commercial production of the metal.
Lithium Americas Corp is developing a lithium clay project in Nevada, roughly 350 miles (563 km) north of Albemarle’s operations. Tesla Inc has said it wants to produce lithium from clay. (Reporting by Arunima Kumar in Bengaluru; additional reporting by Ernest Scheyder; Editing by Krishna Chandra Eluri and Barbara Lewis)