SQM (NYSE: SQM), the world's No. 2 producer of lithium, doesn't seem worried about potential higher taxes for miners in copper powerhouse Chile, as it is pushing ahead with planned expansion plans in the nation, also a world's top producer of the battery metal.
As the market is growing faster than expected, the company said it will fast-track existing expansion plans in Chile's lithium-rich Atacama salt flat.
SQM's new target in Chile is to reach 180,000 tonnes of lithium carbonate and 30,000 tonnes of lithium hydroxide annually by the end of 2022.
The Santiago-based company also plans to develop a 50,000-tonne per year lithium hydroxide joint-venture project in Australia as demand for the electric vehicle battery metal soars.
"We saw strong demand growth for electric vehicles during the first quarter, more than double compared to last year, making us believe that annual demand for lithium chemicals could grow more than 30%," CEO Ricardo Ramos said in the company's first-quarter earnings statement.
Soaring demand for lithium is fueling prices for the commodity. MINING.COM's EV Metal Index shows the metal use was up 12% in March, when compared to the same month last year, while total material deployed was up an impressive 94% month on month.
Lithium prices continued to recover, topping US$10,000 in March for the first time since August 2019, and SQM said expects prices to keep climbing through the end of the year.
The Chilean company said its lithium sales volumes in the first quarter jumped 180% year-on-year due to rising demand from the electric vehicle (EV) industry.
The miner expects that demand growth will boost its sales of lithium carbonate equivalent to more than 85,000 tonnes this year, compared to a 30% increase in 2020.
SQM's shares are down 14% since the beginning of the year, but the stock has climbed more than 76% in the last 12 months, leaving the miner with a market cap of US$12.2 billion.