Albemarle expects stellar 2022 earnings on surging lithium demand

(Reuters) -Albemarle Corp, the world’s top lithium producer, expects a steep jump in 2022 earnings, as global efforts to combat climate change drive a surge in demand for the battery component used in electric vehicles (EV).

FILE PHOTO: A sign at the approach road leads to Albemarle's lithium evaporation ponds at its facility in Silver Peak, Nevada, U.S., January 9, 2019. REUTERS/Ernest Scheyder/File Photo

Lithium ion batteries are expected to remain the dominant battery chemistry, especially in transportation, as the world moves to meet stringent targets for cutting carbon emissions.

Last month, the Biden administration took a leap toward the goal of slashing greenhouse gas emissions by issuing an executive order aimed at making half of all new vehicles sold in 2030 electric. []

Global EV sales topped 2.5 million units last year, a figure that’s projected to jump 70% in 2021 and continue to rise through 2040, according to IHS Markit forecasts.

Earlier this year, Albemarle said it would double lithium production at its facility in Silver Peak, Nevada to capitalize on the burgeoning EV market.

The Charlotte, North Carolina-based company said on Friday it expects 2022 full-year adjusted core earnings to be up 25% to 35% from a year earlier.

The company’s shares were up 1.89% at $248 before the bell, having risen 65% in the last year as of last close.

Albemarle also introduced its 2026 adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) forecast which it expects to range between $2.2 billion and $2.6 billion.

The company in August set its adjusted EBITDA forecast at $810 million to $860 million for 2021.

Albemarle will host its 2021 Investor Day event on Friday at 8:30 a.m. ET virtually.

Reporting by Rithika Krishna in Bengaluru; Editing by Anil D’Silva and Shinjini Ganguli