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Allkem Lithium Breaks Barriers

Major lithium miner Allkem provided a much needed boost for the lithium sector as a whole after the company announced their quarterly update.

During the three months ended 30 June, Allkem delivered record quarterly group revenue of approximately US$337 million and a group gross operating cash margin of approximately US$292 million.

Total revenue for the 2022 financial year (including Mt Cattlin from the merger date of 25 August 2021) was US$762 million and its group gross operating cash margin was approximately US$594 million (excluding corporate and other non-operating costs). Finally, the company also ended the year with cash on hand of US$663.2 million, which is an increase of US$213.1 million since the end of March.

That included just 24,845t in the June quarter (37,8437dmt of shipments), but still generated record revenue of US$188.9m with a remarkable gross margin of 84% on average pricing of US$4992/dmt for spodumene at a grade of 5.4%.

Further to this, the 5.4% concentration it is well below the benchmark 6% Li2O grade normally referenced in spot pricing and revenue significantly outstripped the previous quarter’s US$143.8m on much weaker production.

Allkem revealed that it is targeting former Galaxy’s mine Mt Cattlin spodumene production of approximately 160ktpa to 170ktpa.

Some concerns also arose from management that costs will be higher in FY 2023. This is due to ongoing developments, lower production volumes, and labour shortages in Western Australia. However, with customer demand in the spodumene market remaining robust, the company is expecting spodumene concentrate pricing in the September quarter to be higher than the June quarter.

Finally, the company says it expects to see relatively stable prices in lithium chemicals, carbonates and hydroxide and a continued increase in spodumene prices for the September quarter.

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