Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

GM prepaying Livent $198 million for guaranteed lithium supply

Stock Markets Aug 02, 2022 06:26PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: The company logo for lithium producer Livent Corp is displayed on a screen at the New York Stock Exchange (NYSE) during the company's IPO in New York, U.S., October 11, 2018. REUTERS/Brendan McDermid

By Ernest Scheyder

(Reuters) -General Motors Co is prepaying Livent (NYSE:LTHM) Corp $198 million for a guaranteed six-year supply of lithium, a deal that reflects the auto industry's rising worry about a tightening market for the electric vehicle battery metal.

Prepaying cash for a guaranteed metal supply is unusual in the mining industry. The deal shows GM's eagerness to ensure it has sufficient raw materials to meet its goal https://www.reuters.com/business/autos-transportation/gm-reaffirms-full-year-profit-forecast-prepares-possible-slowdown-2022-07-26 of producing 1 million EVs annually in North America by 2025.

Both companies announced the broad brushstrokes of the deal last week https://www.reuters.com/business/autos-transportation/gm-signs-agreements-with-suppliers-course-reach-1-mln-ev-capacity-by-2025-2022-07-26, but Livent announced financial terms on Tuesday as it posted a better-than-expected profit and raised its forecast for the year.

"GM is certainly thinking for the long term here," Paul Graves, Livent's chief executive, told investors on a Tuesday conference call. "By making the advanced payment, they are clearly giving us the commitment that we were looking for."

Graves has long prodded automakers to work closer with lithium producers. In an interview with Reuters last fall, Graves warned https://www.reuters.com/markets/commodities/ev-industry-must-work-closer-with-lithium-suppliers-executives-say-2021-12-01 that unless the auto industry signed long-term deals, "there may be periods where there is just insufficient lithium."

Livent produces lithium in Argentina and has processing facilities in the United States.

Livent, which also supplies BMW https://www.reuters.com/business/autos-transportation/bmw-has-got-its-timing-right-beefing-up-electric-cars-ceo-2021-03-30, expects to receive the GM prepayment later this year. The company is set to start supplying GM in 2025 at a contractual price per tonne, though neither company disclosed volume.

Philadelphia-based Livent reported second-quarter net income of $60 million, or 31 cents per share, compared with $6.5 million, or 4 cents per share, a year ago.

Excluding one-time items, Livent earned 37 cents per share. By that measure, analysts expected earnings of 29 cents per share, according to IBES data from Refinitiv.

Livent said expansion of its Argentina site is on schedule. The company's stock rose slightly in after-hours trading.

GM prepaying Livent $198 million for guaranteed lithium supply
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email