Chilean miner SQM, the world’s No. 2 producer of lithium, said on Thursday its earnings jumped in the second quarter as demand for electric vehicles soared, boosting its sales volumes and the price for the coveted battery metal.
The company reported second-quarter earnings of $89.8 million, or $0.31 per share, compared with $50.8 million, or $0.19 per share, in the year-ago period. Earnings in the first half of 2021 were up 65% over the first six months of 2020, the company said.
A resurgence in lithium demand helped spearhead the earnings growth, CEO Ricardo Ramos said in a statement. He predicted the company’s sales volume for the white metal could hit 95,000 tonnes in 2021, higher than previously thought, and said prices would rise alongside demand.
“Our average lithium prices during the second quarter of 2021 were almost 20% higher compared to the first quarter of 2021, as sales contracts signed last year are expiring and a higher percentage of our sales are invoiced based on the current pricing scenario,” Ramos said.
The company expects the price of the lithium it sells to approach $10,000 per tonne by the fourth quarter of 2021, executives said in a conference call later on Thursday.
Optimism in the lithium industry has grown dramatically compared with last year, when funding for mines and processing plants dried up during the coronavirus pandemic and prompted many to shelve expansion plans.
SQM earlier this year raised $1.1 billion in capital to help underwrite projects in Chile and Australia. The company now predicts global demand for lithium will increase 40% in 2021 versus the previous year, and said it could surpass 1 million tonnes by 2025.
SQM’s sales volumes for lithium in the second quarter alone jumped more than 90%, the company said.
The Chilean lithium producer expects to churn out 140,000 tonnes of the metal in 2022.