Galaxy Resources, Set to `Make Money' in 2011, Seeks New Lithium Projects
Galaxy Resources Ltd., aiming to become the world’s fourth-biggest lithium-carbonate producer, expects to “make money” next year and is seeking new projects in Australia and Canada as demand rebounds.
Galaxy expects to be “cash-flow positive” around the end of 2011 and may have A$143 million ($131 million) in revenue in 2012 at full capacity, Iggy Tan, managing director of the Perth- based minerals explorer, said in an interview in Seoul. He declined to identify targets for new projects.
Galaxy is spending a A$145 million to build a mine in Australia and a plant in China to take advantage of rising demand for lithium carbonate, used in batteries, electric vehicles, mobile phones, computers, ceramics and pharmaceuticals.
“Lithium-ion batteries are very popular today,” Tan, who has 27 years of experience in chemicals production and mining, said yesterday. “It is still a young industry and still has a lot of potential. Growth potential in China is enormous.”
Galaxy’s shares have dropped 12 percent this year after more than tripling last year. They traded at A$1.125 at 11:52 a.m. Sydney time on the Australian stock exchange.
Lithium demand is being driven by President Barack Obama’s bid to push car-makers into building more fuel-efficient cars and get 1 million plug-in hybrid-electric vehicles on U.S. roads by 2015. China will also fuel growth of electric vehicles with 10 percent of its cars to be emission-free by 2013, Tan said.
Prices of lithium carbonate may pick up to pre-global financial crisis levels of about $6,500 a metric ton in next 12 to 18 months, Tan said. The prices are at $6,120, the company says.
Galaxy, 19.9 percent owned by Creat Resources Holdings Ltd., plans to start producing concentrate from the mine at Mt. Cattlin in Western Australia this month and expects the first shipment to the processing plant in the Zhangjiagang Free Trade Zone in Jiangsu province in November, he said.