Analyst Note| Seth Goldstein, CFA |
On Jan. 7, Albemarle announced plans to double its brine-based lithium capacity at its existing Silver Peak operation in Nevada. The operation is Albemarle's smallest lithium resource and currently produces roughly 5,000 metric tons per year, growing to 10,000 metric tons by 2025. The company also announced it was studying potential lithium production from clay-based resources in Nevada. We have increased our lithium volume forecast to account for the Silver Peak capacity expansion. The potential clay project is still in the exploration phase, so we do not include it in our valuation model. Our fair value estimate rises to $130 per share from $125 due to the additional Silver Peak volume and the time value of money since our last update. Our narrow moat rating is intact.