Lithium producers in Australia saw profits surge on the back of high prices last year, avoiding a slump in earnings by other metal miners.
Pilbara Minerals, one of the nation’s top producers, and Allkem both said net income jumped more than ten-fold in the second half of 2022 from a year earlier. Price gains in the period helped them to offset the inflationary pressures and tight labor market that saw mining giants Rio Tinto Group and BHP Group Ltd. report sharp drops in profit earlier this week.
Most commodities fell in the second half of 2022 from the highs in the immediate aftermath of Russia’s invasion of Ukraine while lithium’s gains held through most of the year, boosted by surging demand from carmakers rushing to meet ambitious electric vehicle targets. But, lithium carbonate prices in China have tumbled 24% this year, with Goldman Sachs Group this week warning that the slump has further to run.
Pilbara Minerals said net profit rose to A$1.24-billion ($844-million) in the six months through December as production rose 86%. The main driver was a fourfold increase in the price it received for its spodumene concentrate, a lithium ore, the company said.
Allkem Ltd., which produces lithium in Australia and Argentina, said net profit surged on the back of “strong lithium carbonate and spodumene concentrate pricing.” Mineral Resources, which mines lithium and iron ore, also posted record earnings from its lithium business.