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Allkem reports continued strong lithium pricing, expects its annual production to fall marginally short of guidance

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(Kitco News) - Lithium producer Allkem (TSX: AKE) reported Monday that continued strong market conditions positively impacted the price received for lithium carbonate from its Olaroz Lithium Facility in Argentina.

The company said that the June quarter FY22 average price received for lithium carbonate is expected to be approximately 14% above prior guidance at US$40,000/t FOB on sales of approximately 3,500 tonnes.

"Customers continue to value security of supply which is reflected in a fully committed order book for the remainder of the calendar year," the company said in a statement.

Similarly strong conditions continue in the spodumene market with realized spodumene concentrate pricing in the June quarter of approximately US$5,000/t SC6% CIF, Allkem added.

Shipped spodumene concentrate for the quarter is anticipated to be approximately 38,000 dry metric tonnes ("dmt") at an average grade in line with customer requirements of 5.3% with a further 15,000 dmt to be shipped in early July 2022. 

Importantly, the company said that its current estimated annual spodumene production for FY22 is anticipated to fall marginally short of guidance by approximately 2-4%, at between 192,000 - 196,000 dmt, due to production delays resulting from the highly competitive Western Australian resources labour market and COVID-19 related requirements due to the delayed re-opening of the Western Australian border.

However, Allkem pointed out that strategies have been implemented to mitigate these temporary impacts on production.

The company’s portfolio includes lithium brine and borax operations in Argentina, a hard-rock lithium operation in Australia and a lithium hydroxide conversion facility in Japan.

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