Old Money Bets on EVs

Albemarle Corporation (NYSE:ALB), founded in 1887, with the intention to produce bromine from salt brines, remarkably today, holds the title for the largest producer of lithium in the world. This title was obtained, through the last 10 years, turning the company from the old fashioned energy and chemicals business into the 21st century’s future energy-supplier behemoth. 

Through the 20th century, Albemarle provided catalysts for oil refineries to turn crude oil into products like fuel, and by 2000 had garnered a reputation for catalyst solutions in the oil and gas industry. Following that, it began expanding into the lithium market in the early 2010’s, with the acquisition of Chilean lithium company SLM S.A. Subsequently, in 2014 Albemarle accelerated that trajectory to lithium production driven by Electric Vehicle demand by acquiring Rockwood Holdings Inc. Those acquisitions established Albemarle’s presence as a lithium producer, as Rockwood facilitated its lithium growth, and it also capitalized on the EV trend – which had a lithium appetite.

Some would presume that these successes would be plentiful for an over $20Bn market cap company with a history of more than 130 years. However, the educative aspect could be that what the company’s history dictates, should never be taken as a guarantee for its future.

Albemarle (NYSE:ALB) is closing on a $4.25 billion acquisition of Australian Liontown Resources. Liontown is developing the Kathleen Valley project – one of the largest and highest-grade rock lithium deposits in the world. According to Benchmark Mineral intelligence, the global lithium market has grown from $1.6Bn in 2015 to $48Bn in sales last year and is not showing any signs of slowing down, especially considering EV adoption globally.

It looks like Albemarle (NYSE:ALB) is keeping up with the pace extremely well despite its age.