Critical minerals miner Allkem expects the volatile lithium chemicals market to be tightly balanced this year amid the global drive to go electric.
One of the first movers in hard-rock and brine-produced lithium, Allkem is merging with US-based Livent Corp to create the world's third-largest lithium producer.
Allkem chief executive Martin Perez de Solay told an investor briefing on Thursday an independent expert report would be ready for shareholders in September, and confirmed the deal was on track for completion by the end of this year.
Despite a sharp correction in prices, chief sales and marketing officer Christian Barbier said market fundamentals remain strong, with decarbonisation and batteries for energy storage as the key enablers.
Shares in Allkem, which has operations in South America, Japan and Australia, fell 2.8 per cent or 45 cents to $15.34 in afternoon trade.
The latest production report released to the ASX showed Mt Cattlin, an open-pit spodumene mining operation in Western Australia, beat guidance with annual production of 130,984 tonnes.
The former Galaxy Resources site shipped 46,787 tonnes in the June quarter, up 50 per cent on the previous three months.
An update of reserves confirmed an additional four to five years of open-pit mining to 2027/28.
Allkem also reported a "significant improvement" in the grade of ore at Mt Cattlin, as mining moves into the central zones of the main ore body.
Although rivals plan to start production this year to cash in on global demand, Allkem noted the risks for newcomers of bringing product to market.
"ESG (environmental, social and governance) framework, permitting, and part shortages, including crystallisers, have impacted the industry and may cause further delays in increasing refining capacity," Allkem said.
Still, the so-called destocking cycle within the battery supply chain is coming to an end, and electric vehicle sales in China have recovered strongly.
EV sales in China, the world leader, rose 44 per cent year-on-year, with battery sales also up by more than one-third (36 per cent).
Testing is under way in Japan to provide battery-grade material for the Naraha lithium hydroxide plant - the first of its kind to be built in that country.
Tax breaks and the phase-out of conventional cars encouraged demand elsewhere, with sales up 48 per cent in the US and 23 per cent in the European Union.
Allkem is evaluating six projects for the company's net-zero action plan, and a $US130m sustainability-linked financing deal has been signed for stage one of Sal de Vida in the "lithium triangle" where Chile, Argentina, and Bolivia meet.
Mr Perez de Solay said a proposed lithium project in Canada was in the final stages, but had been delayed by forest fires.
Located near highways and rail, the hard-rock operation capable of producing 321,000 tonnes of spodumene concentrate per year will use hydro energy and tap expertise from Mt Cattlin.
At June 30, group cash was $US648.4 million, up $US70.5m from March 31.
Group revenue for the quarter was $US334m, similar to the previous year.
