Allkem has enjoyed strong margins during the June quarter of 2022, with its Olaroz lithium project in Argentina exceeding expectations for its lithium carbonate product.
The ASX-200 miner forecasts Olaroz’s average price across the three months will be approximately 14 per cent above guidance, with lithium carbonate selling at $US40,000 ($55,599) per tonne FOB (free on board).
Allkem said its lithium carbonate customers have been favouring the company’s security of supply, which has resulted in a fully committed order book for the remainder of 2022.
The world’s insatiable demand for spodumene concentrate is benefiting Allkem’s Mt Cattlin project in Western Australia, with the company experiencing realised spodumene pricing of $US5000 ($6950) per tonne CIF (cost, insurance and freight) for its six per cent spodumene concentrate during the June quarter.
To put this into perspective, Allkem sold spodumene at an average of $US1186 per tonne from August 25 2021 (when the Orocobre, Galaxy merger was completed) to December 31 of that year. This was for a 5.7 per cent spodumene concentrate product.
Despite the strong price performances, Allkem expects to fall just short of its production guidance (192,000–196,000 dry metric tonnes) for the 2021–22 financial year.
The company cited production delays resulting from the highly competitive labour market in the WA resources industry and the delayed re-opening of the WA border as contributors to the reduced output.
The latest news comes after Allkem posted record quarterly revenue from Mt Cattlin in the March quarter of 2022.
Mt Cattlin produced 48,562 dry metric tonnes of spodumene concentrate and shipped 66,011 dry metric tonnes of the product in the three months to March 31, which amounted to $195.5 million in revenue from the mine at a gross cash margin of 84 per cent.