for a Sustainable
AMG CLEAN ENERGY MATERIALS
AMG CRITICAL MINERALS
AMG CRITICAL MATERIALS TECHNOLOGIES
Revenue By End Market
From the CEO
We are pleased to report on the very successful year 2022. AMG has achieved the highest EBITDA in its 15-year history with $343 million for the full year 2022. For 2023, we provided EBITDA guidance “to exceed $400 million.” Our 5-year EBITDA guidance from May 2022 stands as “$500 million, or more, in 5 years, or less.”
The star performer in 2022 was AMG Lithium’s Brazil operation with an EBITDA contribution of $215 million, or 63% of the total EBITDA. This share of “lithium” in AMG is likely to increase over time, as the mine in Brazil expands.
In summary, AMG has shifted to a new plateau of profitability.
CHIEF EXECUTIVE OFFICER
AMG’s key strategic projects cluster in the AMG Clean Energy Materials segment, with AMG Lithium leading the company’s record earnings growth. The mission of AMG Lithium is to be the number one producer of electric vehicle battery materials in Europe by expanding production of battery-grade hydroxide, vertically integrating its Brazilian spodumene production, and pursuing additional mineral resources. AMG Brazil will expand its spodumene production to 130,000 tons per annum. The project is under construction and is targeting full capacity in the second half of 2023.
The AMG Lithium refinery in Bitterfeld, Germany, Europe’s f irst lithium hydroxide refinery, is under construction as well. Commissioning for the first 20,000-ton module of the battery-grade lithium hydroxide upgrader will commence in the fourth quarter of 2023. With the planned four additional modules, AMG Lithium expects to achieve a total annual production capacity of 100,000 tons.
In September 2022, AMG Lithium signed a binding supply agreement with EcoPro, a leading South Korean cathode paste producer, for an initial three-year term to deliver a minimum of 5,000 tons per annum of battery-grade lithium hydroxide to EcoPro’s cathode materials production plant in Hungary.
In Zanesville, Ohio, the new vanadium spent catalyst recycling facility started operating in October 2022. This new facility doubles AMG’s recycling capacity for refinery residues and is a clear manifestation of AMG’s industry leadership in the recycling of hazardous refinery waste globally.
In July 2022, Shell & AMG Recycling B.V. (“SARBV”) and its partner, the United Company for Industry (“UCI”), signed an agreement with the Saudi Arabian Oil Company (“Aramco”) under which SARBV and UCI shall construct and operate a world-class ‘Metals Reclamation Complex’ for the recovery and recycling of metals in Saudi Arabia. The Metals Reclamation Complex will deploy closed loop circular recycling of refinery waste to produce materials that will enable the increasing penetration of renewable energy into the energy supply mix in the Kingdom. In addition, the Metals Reclamation Complex will provide improvements in energy efficiency for industrial users. SARBV is advancing its projects in the Middle East, in particular the first phase of the Supercenter project based on long-term supply agreements with Aramco. Plant design optimization, site selection and permitting activities are progressing and the FEL3 partnering with Hatch began in December 2022.
For the production and supply of tantalum concentrate from AMG’s Mibra Mine in Brazil, AMG Brazil established a strategic partnership with JX Nippon Mining & Metals Corporation and TANIOBIS GmbH in December 2022. This partnership provides long-term stability in tantalum sales and corresponding by-product credits to lithium production costs for AMG Brazil.
AMG Critical Minerals benefited from increasing metal prices compared to the prior year. This was partially offset by the ongoing rise in energy and shipping costs during 2022, which were in turn offset by a forward-looking price policy and the benefit of energy hedges in AMG Silicon.
In November 2022, AMG LIVA put its first battery Hybrid Energy Storage System (“HESS”) into fully automatic operation mode in Hauzenberg, Germany. The HESS battery system is an ecosystem combining Lithium-ion and Vanadium Redox Flow batteries with artificial intelligence routines and self-learning algorithms to maximize efficiency, safety, and lifetime of the batteries. The HESS system is being used at AMG Graphite’s Hauzenberg facility to f latten production-driven spikes in electricity demand, known as “Peak Shaving.” This industrial application reduces CO2 emissions and energy costs. AMG LIVA intends to expand the HESS system at Hauzenberg to include a large-scale solar power plant integration to further reduce facility energy costs.
On January 1, 2023, AMG placed its silicon metal plant in Pocking, Germany, on care and maintenance. The plant will restart and operate one furnace in March 2023. The operational parameters of the silicon business will continue to be reviewed on an ongoing basis and will be adjusted as appropriate in line with favorable and predictable market conditions. Due to the noted interruptions in silicon operations, the financial impact of the business will be excluded from EBITDA during the period of abnormal operations. The financial impact of the care and maintenance program does not significantly impact AMG’s overall projected 2023 financial results.
Order intake in the Engineering business unit in 2022 increased 24% to $281 million in 2022, from $228 million in 2021, representing a 1.30x book to bill ratio. Order backlog was $220 million at the end of 2022, the highest since March 31, 2020, and 17% greater than the year end 2021 order backlog of $188 million.
With AMG LIVA, the Group established a new growth platform for industrial battery installations worldwide. AMG Engineering will provide the engineering and project management services and AMG Titanium will produce the vanadium electrolyte from gasification residues, adding a circular economy dimension.
Presently, within the AMG Critical Materials Technologies segment, the Group has three LIVA batteries under construction. One, at AMG Titanium’s plant in Nuremberg, Germany, will address peakshaving, integration of solar power and the production of “green” hydrogen. Another, at AMG Chrome in Rotherham, UK, is intended for solar power integration. And the third one at AMG Engineering in Hanau, Germany, will be used as a demonstration facility for various applications.
In December 2022, AMG LIVA sold its first commercial industrial battery HESS to Wipotec, GmbH, a leading global provider of intelligent weighing and inspection technology located in Southern Germany.
In January 2023, AMG’s Management Board approved the construction of a vanadium electrolyte plant with a target capacity of 6,000 m³ at its subsidiary, AMG Titanium, in Nuremberg, Germany. Production is expected to start at the end of 2023. With this vital investment, AMG strengthens its strategy to enable energy efficiency and CO2 reduction for its customers in industrial operations.
AMG understands our obligation to minimizing our impact on climate change and are committed to achieving the following goals: