FX.co ★ Arcadium Lithium Announces Plan To Double Sales Volumes By 2028

At the 2024 Investor Day, Arcadium Lithium plc (ALTM, LTM.AX) unveiled an ambitious plan aiming to double its sales volumes by 2028, with a target of reaching $1.3 billion in Adjusted EBITDA according to analyst consensus pricing forecasts.

Arcadium Lithium projects a 25% increase in combined lithium carbonate and lithium hydroxide volumes for 2024 and 2025, driven by expansion projects at Fenix and Olaroz that are already operational and require no further capital investment.

The company has outlined two waves of expansions across its substantial, high-quality, and low-cost assets in Argentina and Canada. The first wave encompasses four ongoing projects set to be fully completed in phases by 2028, potentially more than doubling current sales volumes.

The second wave, comprising projects still in development and planning stages, is expected to boost production capacity by an additional 125,000 metric tons, reaching a total of 295,000 metric tons post-2028.

Arcadium Lithium is on track to achieve $1.3 billion in Adjusted EBITDA by 2028, benefiting from sustained low-cost production and multi-year customer agreements. This anticipated growth is supported by increased production volumes and forecasted pricing trends that are expected to climb, incentivizing industry supply growth.

Following the January 2024 merger of Allkem and Livent to form Arcadium Lithium, the company has initiated significant cost-reduction measures. These efforts are projected to yield up to $80 million in savings for 2024, with a run-rate savings target of $125 million now expected by the end of 2025, nearly two years ahead of schedule. These savings are attributed to organizational restructuring, operational and supply chain synergies, and reduced reliance on third-party services. The company believes that long-term savings could exceed $125 million.

In a strategic move, Arcadium Lithium has signed a Memorandum of Understanding (MoU) with its long-time partner, Toyota Tsusho Corporation (TTC). This agreement is a pivotal step toward enhancing the company's flexibility to optimize its global integrated operations and leverage production expertise at Naraha. The plan involves using technical-grade lithium carbonate from Olaroz to supply the existing downstream lithium hydroxide network, thereby allowing more battery-grade lithium carbonate from Fénix to be sold directly to customers. This strategic adjustment is anticipated to enhance earnings, with potential implementation as early as 2026.