Dutch miner AMG bullish as it tightens grip on lithium supply chain

AMG Critical Materials NV

30/03/2023 12:00

March 30 (Reuters) - Dutch miner and lithium supplier
AMG  AMG.AS  on Thursday forecast strong profitability as it
cuts costs and tightens its grip on the supply chain of lithium,
a key metal for electric vehicle batteries.
    Rising demand for electric vehicles (EVs) is pushing miners
and carmakers to secure raw materials like lithium needed for
making batteries, while political stakes grow to bring the
supply chain, currently dominated by Asia, closer to home.     
    "Our lithium strategy will result in extraordinarily high
profitability," said the group's CEO Dr. Heinz C. Schimmelbusch
during presentations for the group's capital markets day in
Germany.
    "By establishing our own complete lithium value chain, we
are supporting the European battery material independence,"
Schimmelbusch added in a statement.
    AMG's plant in Bitterfeld, Germany, will start production of
lithium hydroxide in the fourth quarter. By 2024, the group's
subsidiary AMG Lithium GmbH will produce an annual 20,000 metric
tons of lithium hydroxide in Bitterfeld-Wolfen, enough to supply
batteries for around half a million electric vehicles, the
company said.
    It said a contract has already been signed with South
Korea's EcoPro for at least 5,000 metric tons annually.
    In February, AMG posted record results, helped by lower
costs of its lithium operations, and confirmed a core profit
outlook of above 400 million dollars in 2023, despite falling
prices of lithium.
    "Looking at year-to-date February 2023 results, we had a
very good start," the CEO said.
    Pressed on fluctuating lithium prices, Schimmelbusch 
downplayed the impact on AMG's first quarter and declined to
give a quantified outlook for the first quarter.

 (Reporting by Olivier Sorgho;Editing by Elaine Hardcastle)
 ((Olivier.Sorgho@thomsonreuters.com))