March 30 (Reuters) - Dutch miner and lithium supplier AMG on Thursday forecast strong profitability as it cuts costs and tightens its grip on the supply chain of lithium, a key metal for electric vehicle batteries. Rising demand for electric vehicles (EVs) is pushing miners and carmakers to secure raw materials like lithium needed for making batteries, while political stakes grow to bring the supply chain, currently dominated by Asia, closer to home.
"Our lithium strategy will result in extraordinarily high profitability," said the group's CEO Dr. Heinz C. Schimmelbusch during presentations for the group's capital markets day in Germany. "By establishing our own complete lithium value chain, we are supporting the European battery material independence," Schimmelbusch added in a statement. AMG's plant in Bitterfeld, Germany, will start production of lithium hydroxide in the fourth quarter.
By 2024, the group's subsidiary AMG Lithium GmbH will produce an annual 20,000 metric tons of lithium hydroxide in Bitterfeld-Wolfen, enough to supply batteries for around half a million electric vehicles, the company said. It said a contract has already been signed with South Korea's EcoPro for at least 5,000 metric tons annually. In February, AMG posted record results, helped by lower costs of its lithium operations, and confirmed a core profit outlook of above 400 million dollars in 2023, despite falling prices of lithium. "Looking at year-to-date February 2023 results, we had a very good start," the CEO said. Pressed on fluctuating lithium prices, Schimmelbusch downplayed the impact on AMG's first quarter and declined to give a quantified outlook for the first quarter.
(Reporting by Olivier Sorgho;Editing by Elaine Hardcastle)
