Lithium miner Allkem expects its business to expand threefold amid the global adoption of electric vehicles.
Allkem on Friday reported a consolidated net profit after tax of $US219 million for the six months to December 31, up from $13m a year earlier, although higher product prices were offset by inflationary pressures.
Allkem shares on the ASX rose 25 cents, or 2.2 per cent, to $11.71 in morning trade.
The company was created after the merger of Galaxy Resources and Orocobre Ltd in 2021, bringing together assets in Australia, Argentina, Canada and a lithium hydroxide conversion facility in Japan.
Group revenue rose almost threefold to $US558m as the Olaroz Lithium Facility in Argentina achieved record production of 7542 tonnes, 13 per cent higher than the prior record in 2019.
In Australia, the company's Mt Cattlin open-pit mine is two kilometres north of Ravensthorpe in the Great Southern region of WA.
Allkem managing director and CEO Martin Perez de Solay said the FY23 half-year results continued to demonstrate the improving profitability of existing operations and strong demand from customers.
"Amidst strong demand for lithium products we have delivered first production at the Naraha Lithium Hydroxide Plant and advanced Olaroz Stage 2 to commissioning," he said.
The James Bay project under development in Canada is close to hydro power and is poised to take advantage of North American tax breaks and hard rock expertise gained from Mt Cattlin.
Construction is well under way at the Sal de Vida project in Argentina, within the lithium triangle that is home to 60 per cent of the world's lithium.
Allkem said demand in the spodumene market remains robust, driven by strong lithium hydroxide requirements, and pricing in the March quarter is expected to be five per cent above the December quarter.
Strong cash generation and a cash pile of $US552m is expected to fully fund committed projects.
Christian Cortes has accepted the role of acting chief financial officer after the recent death of Neil Kaplan, and recruitment is under way for a permanent replacement.
"Neil was an outstanding CFO and highly respected colleague who dedicated more than 10 years of service to the business. We will miss him greatly," Mr Perez de Solay said.
