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Albemarle Starts EarthWorks at Kemerton

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Jan. 7 2019, Updated 1:16 p.m. ET

Albemarle starts earthworks

Albemarle (ALB) isn’t wasting any time. Albemarle entered into a joint venture agreement with Mineral Resources Australia on December 17 for 50% interest in Mineral Resources’ Wodgina hard rock lithium project in Western Australia. Albemarle has started earthworks at the Kemerton Strategic Industrial Area in Western Australia—the lithium hydroxide conversion site.

Albemarle received approval from the federal and state government to start the Kemerton plant. The plant will have the capacity to produce 60,000 tons of lithium hydroxide. The capacity can be expanded to 100,000 tons if required. Albemarle expects the plant to be completed and commissioned in 2021.

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Eric Norris, Albemarle’s president for the Lithium segment, said, “The site earthworks at Kemerton today are on track with our projections. Achieving this milestone underscores our commitment and confidence in developing LiOH operations in Western Australia and in our overall strategy to drive significant shareholder value and meet our customers’ demands.”

Stock update

Although there were positive developments, negative sentiments around the stock continued to increase. As a result, Albemarle stock declined 0.7% and closed at $76.24 for the week ending January 4. The Global X Lithium ETF (LIT), which holds 4.6% of its portfolio in Albemarle, outperformed Albemarle and gained 1.3% the previous week.

The decline in the stock price caused Albemarle to trade 19.8% below the 100-day moving average price of $95.07. Albemarle’s 100-day moving average has declined from the high of $132.40.

In 2018, Albemarle declined 39.75%. Analysts appear to be bullish on the stock. Analysts have recommended a target price of $120.40, which implies a return potential of 57.9% over its closing price on January 4. Albemarle’s 14-day relative strength index is at 36, which indicates that the stock isn’t overbought or oversold.

LIT also provides exposure to FMC (FMC), Tesla (TSLA), and Johnson Controls (JCI) with weights of 15.2%, 4.1%, and 3.2%, respectively, as of January 4.

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