MELBOURNE (Reuters) -Albemarle has agreed to double the capacity at its lithium hydroxide processing operations in Western Australia to 100,000 tonnes by 2026 and spend around $1.5 billion to build two more trains at the facility, Albemarle (NYSE:ALB) said on Wednesday.
Construction is expected to start immediately at Albemarle's Kemerton operations south of Perth, with the first production of the battery chemical from the expansion expected in 2026, according to a statement from state Premier Mark McGowan.
The lithium giant will build two more processing trains at the facility, to add to the two processing trains that are already ramping up after the plant was finished late last year. That will make it Australia's largest lithium producer, Albemarle said.
“Australia is essential to the global supply chain for energy storage and an important part of our diverse portfolio,” said Albemarle CEO Kent Masters in a statement.
“Our decision to expand was driven by our confidence in future demand and allows us to offer customers additional supply.”
Albemarle has an 85% interest in the facility and operates them under an agreement with partner Mineral Resources that was renegotiated in February.
It is estimated the capital expenditure new trains will be around $1.5 billion, Albemarle said.
Albemarle cut its annual profit forecast on Wednesday despite posting a better-than-expected quarterly earnings, citing softening prices for the metal used to make electric vehicle batteries.