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As a shareholder of AMG Critical Materials, I would like to share with you an example of a story that illustrates the company's Clean Energy Materials growth strategy. This story is a non-fiction case study that aims to inform potential investors about the opportunities and challenges that AMG faces in the global market of vanadium, lithium, and tantalum.
AMG is a leading producer of these critical materials, which are essential for the development of clean energy technologies such as batteries, solar panels, and wind turbines. AMG has a diversified portfolio of assets and projects across the world, but one of its main focuses is the Mibra mine in Brazil, where it produces spodumene, a mineral that contains lithium, and tantalum, a rare metal used in electronics and aerospace applications.
The Mibra mine is a strategic asset for AMG, as it provides a secure and low-cost source of lithium and tantalum for its downstream operations. AMG has invested heavily in expanding and upgrading the mine to increase its production capacity and quality. By 2024, AMG expects to increase spodumene production from 90.000 ton per year to 130.000 ton per year and tantalum production from 260.000 pounds per year to 370.000 pounds per year.
But AMG is not only a miner, it is also a processor and innovator of clean energy materials. AMG has developed a proprietary process to convert spodumene into high-purity lithium hydroxide, a key ingredient for lithium-ion batteries. AMG is building two state-of-the-art lithium hydroxide facilities: one near the Mibra mine in Brazil, with a capacity of 16.500 ton per year of technical-grade lithium hydroxide; and another one in Bitterfeld, Germany, with a modular design that will allow for a total capacity of 100.000 ton per year of battery-grade lithium hydroxide.
The first module of the Bitterfeld facility will be operational in Q4 2023, and each module will generate an EBITDA between 60 million US$ and 200 million US$, depending on the market price of lithium hydroxide. AMG expects to capture a significant share of the European battery market, which is expected to grow rapidly in the next decade due to the increasing demand for electric vehicles.
AMG is also a leader in the production of vanadium, another critical material for clean energy storage. Vanadium is used in vanadium redox flow batteries (VRFBs), which are large-scale stationary batteries that can store renewable energy and provide grid stability. AMG produces vanadium from its own sources as well as from secondary sources such as spent catalysts and steel slag.
AMG has developed a unique technology to recover vanadium from steel slag, which is a by-product of steelmaking that contains valuable metals but is usually disposed of in landfills. AMG's technology allows for the extraction of vanadium and other metals from steel slag in an environmentally friendly way, reducing CO2 emissions and waste generation. AMG has partnered with several steelmakers in Europe and North America to implement this technology and create a circular economy for steel slag.
By producing vanadium from steel slag, AMG not only reduces its dependence on primary sources of vanadium, but also creates a new revenue stream from selling the recovered metals. AMG expects to increase its vanadium production from 7.000 ton per year in 2020 to 12.000 ton per year in 2024, with an EBITDA margin of over 50%.
This story shows how AMG is leveraging its expertise and innovation to create value from critical materials for clean energy applications. AMG's Clean Energy Materials growth strategy is driven by its vision to be a global leader in sustainable solutions for the energy transition. By investing in its assets and projects, AMG is positioning itself to benefit from the increasing demand for vanadium, lithium, and tantalum in the next years, while also contributing to the reduction of greenhouse gas emissions and environmental impact.