The Energy of Nature

Highlights

AMG Clean
Energy Materials

AMG Lithium is on its way to becoming the premier European lithium refiner, from its own low-cost resources in Brazil, and operates a value chain starting with mining and including solid-state lithium batteries in Germany. In Brazil, AMG’s lithium concentrate plant will temporary stop production to facilitate the expansion from 90,000 tons to 130,000 tons. We expect to produce 93,000 tons during 2024 and operate at the full expanded capacity rate, or 130,000 tons per year, in the fourth quarter of 2024.

AMG Brazil signed an exclusive MOU with Grupo Lagoa to concentrate the lithium minerals contained in pegmatite to produce commercial grade lithium concentrate. AMG’s lithium hydroxide refinery’s first 20,000-ton module in Bitterfeld, Germany, is in advanced phases of commissioning, and the product qualification process is planned to start in the third quarter of 2024. AMG Lithium signed a non-binding MOU with FREYR Battery in January 2023 to supply FREYR between 3,000 to 5,000 tons per annum of battery-grade lithium hydroxide.

AMG Lithium GmbH signed a non-binding MOU in May 2023 with Fortum to further process Fortum’s recovered lithium from old electric vehicle lithium-ion batteries.

AMG Vanadium is the world’s market leader in recycling vanadium from oil refining residues and the only US ferrovanadium producer. It is expanding in the Middle East via SARBV’s Supercenter project in the Kingdom of Saudi Arabia, which is a facility to produce high-purity vanadium oxides and vanadium electrolyte. The facility will operate under a long-term supply contract with Saudi Aramco for vanadium-containing gasification ash from its power plants in the Kingdom. The full Supercenter project will include the processing of spent catalysts, a Fresh Catalyst R&D facility, and a LIVA Hybrid ESS.

Enacted by the Inflation Reduction Act of 2022, AMG Vanadium qualifies for the Section 45X Advanced Manufacturing Production Tax Credit effective from 2023 onwards, which provides a production credit for domestic manufacturing of certain critical materials. Based on proposed regulations as issued by the IRS, AMG expects to receive a subsidy of approximately $6 million for full year 2023. The ruling is still in the comment period and, as such, is subject to a final determination.

AMG Vanadium acquired the processing technologies and intellectual property related activities from TTI, and will integrate them into its global strategic growth initiatives conducted through SARBV.

AMG CRITICAL
MINERALS

Gross profit for the year decreased from $47 million in 2022 to $22 million in 2023. AMG Critical Minerals’ profitability was negatively impacted by decreasing metal prices in 2023 compared to the prior year, as well as the slowdown in the European industrial economy. As a result, adjusted EBITDA in 2023 decreased to $7 million from $38 million in 2022.

AMG LIVA’s first battery Hybrid ESS in Hauzenberg, Germany, which has been in fully automatic operation mode for more than a year, has performed very well in flattening production-driven spikes in electricity demand, known as “Peak Shaving.” The Hybrid ESS battery system combines Lithium-ion and Vanadium Redox Flow batteries with artificial intelligence routines and self-learning algorithms to maximize efficiency, safety, and lifetime of the batteries.

On January 1, 2023, AMG placed its silicon metal plant in Pocking, Germany, on care and maintenance. AMG Silicon operated one of four furnaces beginning in March 2023 through the end of the year, and it plans to run two of four furnaces for the remainder of 2024. The operational parameters of the silicon business will continue to be reviewed on an ongoing basis. Due to the noted interruptions in AMG Silicon’s operations, the financial impact of the business will be excluded from adjusted EBITDA during this period of abnormal operations. However, AMG Silicon generated $56 million in cash from operating activities during 2023 driven by the receipt of energy sales made in the fourth quarter of 2022.

AMG CRITICAL
MATERIALS TECHNOLOGIES

AMG Engineering signed a record high of $350 million new orders in 2023, an increase of 24% from the $281 million in 2022, representing a 1.27x book to bill ratio. This record level was driven by strong orders for remelting and heat treatment furnaces during the year. Order backlog was $295 million at the end of 2023, 34% greater than the year end 2022 order backlog of $220 million.

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. The target capacity is 6,000 m³ vanadium electrolyte, the equivalent of approximately 100 MWh, which will serve the electricity storage market, including a vertical integration into LIVA batteries. We expect to have nameplate capacity available by the second half of 2024.

AMG Engineering has been selected by PCC’s TIMET to supply the vacuum melting and re-melting furnaces for their new, state-of-the-art Titanium melt facility in Ravenswood, West Virginia. AMG’s scope includes several vacuum arc re-melting, electron beam welding, and electron beam melting furnaces, signifying one of the largest orders in all of AMG Engineering’s history. In total, the project represents a $500 million investment by PCC. The new facility will be powered by a solar energy, micro-grid using renewable green energy; the first of its kind for PCC.

AMG’s LIVA projects are integral for industrial power management applications and acceleration of the energy transition. The batteries are currently under various stages of bidding and development. One is operational, three are currently under contract and being engineered, and 15 are in bidding and development stages, with a total megawatt hour (MWh) capacity of 749 MWh. AMG LIVA has agreed to acquire the VRFB activities from VOITH. VOITH has developed an advanced technology for controlling and balancing large-scale high-voltage VRFB energy storage systems. The technology complements LIVA’s VRFB system development. LIVA will continue to develop the technology and integrate it into its large-scale energy storage systems.

Sustainability