Betting on the prospect that supply falls short of demand the world's largest lithium supplier invests heavily the proceeds from rights issues into capacity expansion

(Albemarle), the world's largest lithium supplier of electric cars, quickly invested most of the money raised from its February share sale into a global capacity expansion strategy, media reported on Monday.

Of the $1.5 billion overraised, the company spent $1.35 billion (8.7 billion yuan) on expanding capacity in Chile and Australia, as well as investing in processing plants in China, according to Abel CEO Kent Masters. Masters said that although it is not easy to predict, the company is very confident that demand will exceed supply by the end of the year.

In addition to established electric car manufacturers such as Tesla, who continue to receive support in the policy direction, the determination of many traditional car manufacturers to switch to electric vehicles has also increased tight expectations of lithium demand. Earlier, Ford announced that it would sell only electric cars in Europe in 2030, while GM advanced its goal of selling only zero-emission models to 2035.

A large amount of demand has also prompted lithium suppliers to accelerate production expansion, but the rapid increase in production capacity has a certain calming effect on prices. Yabao currently estimates that its production capacity will reach 1.1 million tons by 2025. As a reference, the current lithium production capacity of Yabao is about 300000 tons. Eric Norris, head of the company's lithium business, said the big car manufacturers' declarations on electric vehicles, as well as existing subsidies and rules from European and Chinese governments, were very "encouraging" news on the demand side.

In addition to lithium mining, Arbor also has bromine and catalyst businesses. The company also has plans to invest in expanding about 150000 tons of lithium carbonate equivalent capacity over the next three to four years to better reduce business costs.