Thank you for standing by, and welcome to the Q3 2021 Albemarle Corporation Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, David Burke, Director of Investor Relations. Thank you. Please go ahead. Thank you, and welcome to Albemarle's third quarter 2021 earnings conference call. Our earnings were released after close of market yesterday, and you'll find our press release earnings presentation and non-GAAP reconciliations posted on our website under the Investors section at www.albemarle.com. Joining me on the call today are Kent Masters, our Chief Executive Officer, and Scott Tozier, our Chief Financial Officer. Raphael Crawford, President of Catalyst, Netha Johnson, President of Bromine Specialties, and Eric Norris, President of Lithium, are also available for Q&A. As a reminder, some of the statements made during this call, including our outlook, guidance, expected company performance, and timing of expansion projects, may constitute forward-looking statements within the meaning of federal securities law. Please note the cautionary language about forward-looking statements contained in our press release and earnings presentation. Same language applies to this call. Please also note that some of our comments today refer to non-GAAP financial measures. A reconciliation to GAAP financial measures can be found in our earnings release and the appendix of our earnings presentation, both of which are posted on our website. Now, I will turn the call over to Kent. Thanks, David, and thank you all for joining us today. On today's call, I will highlight our quarterly results, provide an update on our goals for 2021, and discuss the progress of our ongoing expansion plans. Scott will provide more detail on our results, outlook, and guidance. We reported another solid quarter with net sales of $831 million and adjusted EBITDA of $218 million. Sales improved by 11% on a year-over-year basis, while adjusted EBITDA was relatively flat compared to the third quarter last year. Excluding FCS from our third quarter 2020 results, our net sales were 19% higher and EBITDA was up 14%. Scott will get into more detail on our financials in a few minutes, including favorable revisions to our guidance. As we stated in our earnings release this morning, we increased our guidance based on the third quarter results. During our recent Investor Day, we did a deep dive into our accelerated growth strategy and provided color on how we think about the near-term expansion of our lithium business as well as our disciplined investment approach. Since that event in early September, we are pleased to have announced several updates on those efforts. This includes signing an agreement to acquire Guangxi Tianyuan New Energy Materials, or Tianyuan, which owns a recently built conversion plant near Qinzhou. We are working to ensure the plant operates as advertised and expect to close this transaction in the first quarter of next year. This puts us on track for first sales from this plant in the first half of next year. In addition to this plant, we have signed two recent agreements for investments in China to support two greenfield projects, each initially targeting 50,000 metric tons per year. These projects position us for initial added conversion capacity up to 150,000 metric tons of lithium hydroxide on an annual basis to meet our customers' growing demands. In addition, our MARBL joint venture announced the restart of the Wodgina lithium mine in Western Australia. On slide 5, you will see the objectives we set for 2021. When we set these goals, we did so with the intent of challenging ourselves with plans that were aggressive but achievable. As we approach the end of the year, I'm excited by the significant progress and proud of the effort our team has put into achieving these goals. As you see on this slide, we have accomplished the vast majority of what we set out to do. For example, we are successfully progressing high-return, fast-payback bromine projects at both Magnolia and JBC. These projects will increase our capacity and improve the efficiencies of our operations. We've also made significant progress on our lithium growth projects. Now let's turn to slide six. First, at La Negra Three and Four, our team continues to execute to plan. I'm excited to announce that we recently completed a major milestone by achieving first lithium carbonate production in late October. Initial production volumes will be used to qualify the plant and the material with our customers to ensure we are meeting their requirements. This qualification process is proceeding on track with first sales expected in the first half of next year. In Western Australia, the ongoing labor shortages and pandemic-related travel restrictions have continued to significantly impact virtually all companies in that region and show no signs of easing in the near term. Despite these efforts, with Herculean efforts, our team has managed to hold Kemerton One construction completion to year-end 2021. We now expect Kemerton Two construction completion in the second half of 2022. While we are facing challenges at these projects, our strategy to consolidate resources and prioritize the first train continues to mitigate additional risks. On slide seven, I'll highlight the progress we've made on our Wave 3 program since we last spoke to you at our investor day. At the end of September, we announced an agreement to acquire Tianyuan for $200 million, including a recently built conversion plant near the port of Qinzhou, designed to produce up to 25,000 metric tons of lithium per year, with the potential to expand to 50,000 metric tons per year. We expect this acquisition to follow a similar path as our acquisitions of Xinyu and Chengdu facilities back in 2016. Following the close of the transaction, which is expected in the first quarter of next year, we plan to make additional investments to bring Qinzhou plant to Albemarle standards and ramp to initial production of 25,000 metric tons. This acquisition enables us to accelerate conversion capacity growth and leverage our world-class resource base. Together with our partner, we agreed to restart operations at the Wodgina lithium mine in Western Australia. Initially, Wodgina will begin one of three processing lines, each of which can produce up to 250,000 metric tons of lithium spodumene concentrate. This resource will be critical as we ramp our conversion capacity in Western Australia with our Kemerton sites. We also signed agreements to invest in two greenfield conversion sites in China at Jiangsu and Meishan. We plan to build identical conversion plants with initial target production of 50,000 metric tons of battery-grade lithium hydroxide at each site. These investments offer additional optionality for future growth and have expansion potential. Investing in China offers capital efficient, high return growth with proximity to our low-cost Australian spodumene resources and many of our major cathode and battery customers. We continue to explore global expansion of our conversion capacity as the battery supply chain shifts west. Turning to slide eight for a view of our global project pipeline. As you can see, Albemarle is executing a robust pipeline of projects all around the world. For example, our bromine business is pursuing incremental expansions in Jordan and the United States. These high return projects leverage our low cost resources and technical know-how to support customers in growing and diverse markets like electronics, telecom, and automotive. In Chile, the Salar Yield Improvement Project allows us to increase lithium production without increasing our brine pumping rates, utilizing a proprietary technology to improve efficiency and sustainability. In Australia, we continue to progress study work on additional Kemerton expansions to leverage greater scale and efficiency with repeatable designs. Finally, in the United States, we are expanding our Silver Peak facility in Nevada to double lithium carbonate production. This is the first of several options to expand local U.S. production. In Kings Mountain, North Carolina, we continue to evaluate restarting our mine. At our bromine facility in Magnolia, Arkansas, we're evaluating the process technologies to leverage our brines to extract lithium. We'll continue to update you periodically on our pipeline. I hope this gives you a sense of the diversity and optionality Albemarle has as a global lithium producer. I'll now turn the call over to Scott for a look at the financials. Thanks, Kent, and good morning, everyone. Let's begin on slide nine. During the third quarter, we generated net sales of $831 million, an 11% increase from the same period last year. This improvement was driven by strong sales for our lithium and bromine segments. Adjusted EBITDA was essentially flat on a year-over-year basis, resulting from the sale of FCS and increased freight and raw material costs. The GAAP net loss of $393 million includes a $505 million after-tax charge related to the recently announced Huntsman arbitration decision. While we continue to assess our legal options, we have also initiated discussions with Huntsman regarding a potential resolution. Excluding this charge, adjusted EPS was $1.05 for the quarter, down 4% from the prior year. Now let's turn to slide 10 for a look at adjusted EBITDA by business. Third quarter adjusted EBITDA of $218 million increased by 14% or $27 million compared to the prior year, excluding the sale of FCS. Higher adjusted EBITDA for lithium and bromine was partially offset by a $13.5 million out of period adjustment regarding inventory valuation in our international locations, impacting all three GBUs. Lithium's adjusted EBITDA increased by $25 million year-over-year, excluding foreign exchange. We were able to offset the limited impact of a one-month strike in the Salar in Chile, thanks to higher tolling volumes and higher spodumene shipments from our Talison joint venture. Adjusted EBITDA for bromine increased by $5 million compared to the prior year due to higher pricing. Partially offset by increased freight and raw material costs. Volumes were flat given the chlorine constraints in the quarter. Catalysts adjusted EBITDA declined $4 million from the previous year. This was due to lower sales and cost pressures, partially offset by higher than expected joint venture income, which included a favorable tax settlement in Brazil. Slide 11 highlights the company's financial strength that is key to our ability to execute our growth plans over the coming years. Our net debt to EBITDA at the end of the quarter was 1.7x and is below our targeted long-term range of 2x-2.5x. This provides us with capacity to fund growth while supporting modest dividend increases. We don't expect the recent arbitration decision to impact our current growth plans, but it could temporarily reduce our flexibility to take advantage of upside growth opportunities. Turning to slide 12, I'll walk you through the updates to our guidance that Kent mentioned earlier. Higher full year 2021 net sales and adjusted EBITDA guidance reflects our strong third quarter performance. Net cash from operations guidance is unchanged due to the timing of shipments to customers and increased raw materials and inventory costs. Capital expenditures were revised higher related to the continuing tight labor markets and COVID-related travel restrictions in Western Australia, as well as accelerated investments in growth. Turning to slide 13 for a more detailed outlook on each of our GBUs. Lithium's full year 2021 adjusted EBITDA is now expected to grow in the mid- to high teens year-over-year. That's up from our previous guidance due to higher volumes and pricing. The volume growth is driven primarily by tolling. Our full-year average realized pricing is now expected to be flat to slightly higher compared to 2020. As a reminder, most of our battery-grade lithium sales are on long-term contracts with structured pricing mechanisms that are partially exposed to the market. We also benefit from stronger market pricing on shorter-term technical-grade sales and on spot and tolling sales of battery-grade lithium. Full-year 2021 average margins are expected to remain below 35% due to higher cost related to the project startups and tolling, partially offset by productivity improvements. Bromine's full-year 2021 adjusted EBITDA growth is now expected to be in the low double digits. That's also up from previous guidance due to the continued strength in demand and pricing for flame retardants. Our bromine volumes remain constrained due to sold-out conditions and a lack of inventory. The outlook for chlorine availability has improved since last quarter, but the market remains tight. The impact of higher chlorine pricing is expected to be felt more in 2022 than in 2021 due to the timing of inventory changes and shipments. Year to date, higher bromine pricing has mostly offset higher raw material and freight costs. Catalyst full year 2021 EBITDA is now expected to decline between 20% and 25%. That's also an improvement from our previous guidance, owing to the higher than expected joint venture income. The year-over-year decline in adjusted EBITDA is primarily due to the impact of the U.S. Gulf Coast winter storm earlier in the year, product mix, and the previously disclosed change in our customers' order patterns. Catalysts fourth quarter margins will also be impacted by product mix, including a greater proportion of lower margin FCC and CFT resid orders. FCC demand continues to improve with increasing global fuel demand, while HPC orders continue to be delayed. Overall, market conditions are improving, but volumes and catalysts are not expected to return to pre-pandemic levels until late 2022 or 2023. In total, we expect EBITDA margins to be lower in the fourth quarter due to higher raw materials, energy, and freight costs across all three of our businesses. We are closely watching several key risk factors, including global supply chain disruptions, global impacts of the energy rationing in China, and chip shortages. Supply chain and logistics challenges are the most immediate. Our teams are working day and night to navigate these port issues, the lack of drivers, and upstream supply disruptions to ensure our customers get their orders on time. We also continue to monitor the global situation with regard to chip shortages. We recognize that the auto industry has been struggling with those shortages, but to date, we have not seen a direct impact on either our lithium or bromine orders. With that, I'll hand it back to Kent. Thanks, Scott. I'll end our prepared remarks on slide 14. As Scott mentioned, we are disappointed by the outcome of the Huntsman arbitration decision. Regardless of the ultimate outcome of that dispute, Albemarle will continue to focus on the execution of our growth strategy. As we highlighted during our Investor Day in September, we have a well-thought-out and focused operating model that we are implementing across our businesses. This model, the Albemarle Way of Excellence, provides us with a framework to execute our objectives effectively and efficiently and will help us to remain on target as we pursue the significant growth opportunities ahead. As we pursue these opportunities, we will be disciplined in our approach to capital allocation. Our primary capital priority is accelerating high return growth. This means that we will invest not just to get bigger, but to create tangible shareholder value and maintain financial flexibility to take advantage of future opportunities. Utilizing this approach with our low-cost resources, we believe our annual adjusted EBITDA will triple by 2026. Finally, at the core of all of this is sustainability. As one of the world's largest lithium producers and innovators, we are able to work closely with our customers to create value and drive better sustainability outcomes for all stakeholders. With that, I'd like to open the call for questions. I'll hand over to the operator. Thank you, sir. At this time, ladies and gentlemen, if you would like to ask a question during this time, you may do so by pressing star one on your telephone keypad. Your first question comes from the line of John Roberts with UBS. Morning, this is Matt Skowronski on for John. In the past, you mentioned that Kemerton may be able to ramp to 40%-50% of capacity in a year following its commissioning and qualification process. Is this still the case for that first line that's supposed to be done with construction at the end of this year? Or is it gonna take some additional time due to the constraints going on right now? I think we've got to get through mechanical completion, then we've got the commissioning and qualification. And then I think what we said is, after that, and that's about a six-month process, then after that, we think we would be able to ramp to maybe 50% in the first 12 months. That's probably a little aggressive, but that's what we're targeting. You know, I think the labor and all those issues are primarily around construction. We've got operators and staffed and on board, and they're helping with commissioning. I mean, the labor market's gonna be tight, and we may fight to keep the ones we want. I'm not sure, but the real labor issue is around construction. Thank you. Scott, you mentioned it, the Huntsman arbitration issue could impact your ability to opportunistically take hold of growth opportunities. Is that organic or just inorganic opportunities? Yeah, I think it's really two. It's really two. I think, partly on the organic side, it's our ability to accelerate or further accelerate our projects. We'll be able to do some of it, but clearly, it's a big drag. Then the second is any sort of larger type of inorganic would need some sort of more creative type of financing to do. Your next question comes from the line of P.J. Juvekar with Citi. Yes. Hi, good morning. Good morning. Good morning. Now that you expect lithium prices to be flat to up for this year instead of down, you must be expecting price gains in Q4 that are well into double digits. Can you comment on that? Then as you look forward into next year, what percent of your contracts will be renewed next year, and do you have any early look into negotiations? Thank you. PJ, hello, good morning. It's Eric here. I wanna make sure I understand your first question. Your first question was, would they be double digit in Q4? Is that what you said? Can you clarify? Yes. It was well into double digits for Q4 for your pricing. The way to think about pricing is, and the flat to down comment is that it's progressive throughout the year. Prices were at their lowest point late last year and early this year, and have been gradually rising as we've gone through the year due to two factors. One is the expiration of any concession we gave against a fixed-priced long-term agreement. The second would be just the movement of spot prices for that portion of our business that is exposed to those markets, which I'm sure you're aware and know those prices have gone up significantly throughout the course of the year. As the guidance we've given, and Scott gave it at Investor Day for next year, was at least 15%-20% year-on-year increase for 2022 versus 2021. Certainly that's a progressive trend. You could certainly see those kinds of increases starting to happen in Q4 versus a year ago. Okay, great. On MARBL, you're restarting one of the three lines. You know, rock prices have skyrocketed, so why just one line? Where would you concentrate that rock? Would that be at Kemerton? Would that be in China? Can you just talk about that? PJ, it's Kent. I think, I mean, we're gonna get started on one, and we'll ramp other facilities over time, but it's really our capacity to convert. We're not really mining rock to sell spodumene into the market. We're mining rock to convert spodumene into finished products. And then we would and we'll do that at Kemerton initially. I mean, I guess we haven't worked out exactly kind of what the logistics are, so that product may go to China and other products go to Kemerton. We just have to balance our sourcing of facilities, but that's the next tranche of our product in that part of the world. Your next question comes from the line of Laurence Alexander with Jefferies. Good morning. First, on the bromine pricing, can you discuss how much of that you feel is transitory versus sustainable given the demand trends you're seeing? Can you give any sense of the magnitude of the chlorine headwind for this year so that we have some better context for the larger than this year kind of headwind next year? Yeah. I think in terms of the pricing, we could probably figure most of that as transitory. You know, it's based on the raw materials pricing that we pay, and then the ability for us to absorb that and manage that as we price forward. In terms of the chlorine impact, it's a more of a timing issue. We're gonna get more chlorine next year at probably a different price than we're gonna get this year. You'll see that really impact us starting mostly in Q1 next year throughout the year. Then with catalysts, the recovery next year, you know, should that be lagging or coincident with production ramp-ups at the refineries? Hey, Laurence, this is Raphael. The FCC business is very ratable to miles driven, and that correlates to refining output. I think FCC has, as is mentioned, sequentially continues to improve from a volume standpoint. That one you would see first, and there's usually a lag on hydro processing, which is a 12- to 18-month lag. As conditions improve in refineries, they get more capital availability and then reinvest in change outs for HPC. That has more of a lag effect. Overall, you look, we see sequential improvement. We see refining conditions improving. We're very tied to that with our performance products, so we see that as a favorable outlook going forward. Your next question comes from the line of Bob Koort with Goldman Sachs. Yes. This is actually Mike here sitting in for Bob. If I could, I'd like to ask a question around the lithium business. Looking at the energy storage related sales, why is there a potential 1-2 quarter lag behind the EV production versus those sales actually maybe leading? Yes, Mike, it's Eric here. It's simply a factor of the length of supply chain. Lithium's consumed in the cathode material, which then is formulated into an electrode that's put into a battery. The battery is then assembled and then put into an EV car. It's just the length of time that takes and the geographies involved. Most of the cathode or nearly all the cathode production and a good amount of the battery production still is in Asia. Of course, cars are produced at various points around the world. It's just the length of the supply chain. You know, we see that lag, but recall, we're well positioned. We're able to supply anywhere in the world. We look, you know, we're well positioned to grow with the industry. That lag is likely to remain there given the length of the supply chain. Got it. Okay, that helps. Also just as a follow-up, when I think about you know lithium recycling, can you give me an idea of what kind of assumptions you guys have made around recycling and perhaps the potential impact on your business, if any at all? Recycling is a phenomenon that follows, you know, the end of life of batteries and further still one has to factor in potential reuse of batteries. Given the 10-year life cycle that is warrantied on most batteries produced for automotive production, that's the kind of lag you're looking at. Batteries being produced today wouldn't even be considered for recycling until 10 years from now. When we look at that means that we see recycling becoming important as the decade wears on, but still by the middle of the decade being a fairly small amount of lithium needed in the supply chain and maybe reaching a low double-digit amount of possible coming back into the stream by 2030. Your next question comes from the line of David Begleiter with Deutsche Bank. Hi, this is David Wang here for Dave. I guess first, can you talk about your feedstock sourcing strategy for the 150,000 tons of lithium hydroxide capacity you're adding in China? I'm sorry. That was the feedstock strategy for the 150 new projects in China? Yeah. They'll be Okay. They'll be fed with our spodumene coming out of Australia. Okay. Secondly, are there any incremental headwinds or tailwinds to your 2022 guidance you provided at Investor Day, especially for Bromine and Catalysts, or do you still stand by those guidance? Yeah, we haven't updated our guidance since Investor Day. We're going through our annual operating plan process right now. In fact, next meeting is next week. We'll give you a more definitive guidance in our fourth quarter earnings call. Your next question comes from the line of Joel Jackson with BMO Capital Markets. Hi, this is Bria Murphy. I'm for Joel. Thanks for taking my questions. Just back on the pricing discussions in 2022. Can you just give us a little bit more color on how the discussions with your lithium contract customers are going? And then are pricing mechanisms going to be similar in 2022 to 2021, or is there a move more to benchmark pricing? Generally speaking, Bria, the discussions we're having with our customers are for price increase next year. That aligns with the guidance I gave in a remark just a few moments ago. We have a book of contracts we've had in our basket, I should say, for some years now. Those are going back to the original long-term agreement, which is significantly higher in some cases than the average price that we're seeing for 2021. Then there's many of those contracts have a variable component. There's no one contract that looks exactly like the other, but that variable component will also see increases. Some of those variable components are tied to indices. Others are just an annual increase nomination that's possible or max increase nomination. Finally, we have a good deal of technical grade contracts where we'll see rising prices based upon an adjustment to what the rises we've seen this year as we roll into next year. The last piece will be our China spot business, and that's hard to say that we'd see a pretty big increase on that next year 'cause prices are already extraordinarily high in China right now. We'll continue to see possibly some upside on a year-over-year basis, particularly in the early part of the year, next year on that. Those are all the components that are driving our increase and the types of discussions we're having with our customers, which will give us nice leverage, upside leverage to the improving market conditions. Okay, that's really helpful. Thank you. I guess just, like, given the large upswing in LFP demand and recent Tesla commentary, with that background, just wanna understand how you're thinking about investments into carbonate versus hydroxide. It seems kinda your incremental investments are mostly focused on hydroxide currently. We see, we monitor this very closely. We have a lot of analytics and customer dialogues up and down the supply chain from OEMs all the way down back through the battery and cathode producers to assess those trends. What we believe has been confirmed in our discussions with customers is while there is an uptick in LFP demand, there's also been an uptick in vehicle production outlook as well for electric vehicles. Where LFP is occupying a sweet spot is in the lower cost range, lower cost and lower driving range portion of the vehicle mix. For some automotive producers, that'll be a larger percentage of their mix than others. Bottom line, we see strong growth in both of those products, albeit we see the growth rate in hydroxide will be higher over the coming five years. Hence we feel we're extremely well positioned. We're bringing on 40,000 tons of carbonate capacity as we speak. We have the hydroxide expansion strategy in addition to the Kemerton ramp that Kent earlier described, and feel we're well positioned to meet both LFP demand and rising high nickel demand for cathodes. Your next question comes from the line of Jeff Zekauskas with JPMorgan. Thanks very much. You've described your lithium prices as perhaps being up 15%-20% or more next year. Is the 15%-20% representative? Given market conditions, could it be up 30%? Well, I think it depends, as you might think, Jeff, on market conditions. There's a portion of our business that is exposed to pure market conditions. The majority of our business, even on these long-term contracts, there's a variable component that anchors around that is gonna be around the fixed price, which is also going up because of the expiration of many concessions we gave. At this point, it's probably too early to say what we think about price, you know, above 15%-20% because our guidance was at least 15%-20%. Right. We'll have to provide you, as the quarter wears on and the discussions continue, that guidance as we get into the February call, the earnings call that we'll have in February. Okay. For my follow-up, when I look at, you know, quoted bromine prices in China, maybe since August, they're up 60%, something like that. Is that a representative price for what's going on in the market, or it's not a representative price? Or can you speak to bromine pricing in Asia and where it's been and where you see it going? What's driving it? Yeah, Jeff Zekauskas, this is Netha Johnson. You know, that's a reflection of a couple of things. First of all, demand is up Clearly across the market and raw material prices are up to produce the brominated products that are being required. What you're seeing is that's what's driving an inordinate amount of price increase in the Chinese spot price. Your next question comes from the line of Ben Kallo with Baird. Hey, thank you guys. Good morning. You know, one of the things that we're thinking about is, and I'd love to hear your perspective is with materials maybe being a bottleneck for EV production and sales. If that's how do you guys view that as a risk just overall? Meaning is there enough lithium, is there enough copper, is there enough nickel? And then how are customers, I guess, approaching you for, you know, and your competitors, you know, for security in the supply chain? Does your scale and your diversity of your resources give you an advantage there over other people when, you know, people are trying to ramp up? Thank you. We talked a little about lithium. Copper, nickel, I don't know that we wanna weigh in on that. I'll make a few comments and then Eric can add some detail to it. I mean, we're investing heavily to kind of keep up with that demand and maintain our share, which has been our strategy. We're investing along with our customers. Security of supply has always been a key part of the value proposition from Albemarle to their customers and particularly around lithium. As you mentioned, the diversity of resources, the diversity of locations where we produce, and we have carbonate, and we have hydroxide today, and then we'll continue to evolve those chemistries as the markets shift over time. I think the network that we build is really a lot of that is focused around security of supply and part of the key value proposition that we talk about constantly with our customers. Yeah, Ben, I just add on the lithium side of material risk, there is enough material, there's enough lithium out there. The issue is the investment required to get there and the fact that it's gonna be at a higher cost, right? The cost curve is upward sloping as you go to lower quality lithium resources that are out there. The discussions we're having with our customers are ones of a deep desire for commitment and partnership. That's both the existing ones we've had and as we bring on new capacity, new ones that we would look to target. That's at various points in the value chain, but I would tell you the most significant and ardent discussions around security are the closer you get to the automotive OEM. I think our track record of executing gives us that advantage for sure. I think that's where the discussions land as us being sort of a base load partner for many of these automotive and battery firms. I do think there is an advantage we have for sure. Thank you, guys. Not to get too, you know, ahead of ourselves here, but are you at a point that you are allocating to customers? So you're picking your customers more than they're picking you or is it not like that? Thanks, guys. No, I would say that's the merit of the partnership and why we have the discussions we do because anyone, any volume who is not committed to us in a long-term way, so that could be a spot buyer on the battery side, that could be a tech-grade buyer on the industrial side, risks not getting the volume that they would like as we roll into 2022. That's the basis for the partnership discussions that we're having is that desire for security of supply given the points in time of the supply in the coming five years where things will be tight, and they are quite tight right now. Your next question comes from the line of Vincent Andrews with Morgan Stanley. Hi, this is Angel Castillo on for Vincent Andrews. Thank you for taking our question. Just back to the Huntsman arbitration, curious, you know, what other alternatives are there in terms of discontinued process? I know you mentioned you've started to have discussions around settlement. So what other, you know, kind of from a legal perspective, what other alternatives are there? And then how should we think about the timing of all of this? Well, I think it's a range, right? We're not gonna get into too much because it's an active process. It is either through the arbitration process or from discussions that we've initiated that we could potentially reach agreement and resolve that matter. It's a pretty wide timeframe. Those are the options. Understood. As we think about Kemerton and your ability to fulfill those contracts, I guess particularly Kemerton Two, given the longer delay, will those be fulfilled through more tolling or how should we think about kind of the volume and how that will be, I guess allocated, I guess in terms of, you know, as we think about next year or 2023, will that be kind of less volume overall or just kind of lower margin from tolling? Well, I think you'll see us. We'll fill that with tolling and with this acquisition that we've done, and we expect to get that up to speed relatively quickly. I mean, there'll be some. We expect to make rights to get it to our standard and the quality that we want. But we'll be aggressive around that. Those will be the two kind of methods that we use to stay on our plan. Your next question comes from the line of Kevin McCarthy with Vertical Research. Hi, good morning. This is Corey Murphy on for Kevin. I wanted to follow on, I think it was PJ's question earlier about Wodgina. You said you were starting up one line and it looks like it's gonna start production maybe in the third quarter of 2022. Can you help me understand what the delays are or why the restart process seems to take maybe upwards of six to 10 months? Then, given spodumene prices, why wouldn't you start up or try to start up all three lines? Are you able to sell the spodumene on the spot market, or is it that, you know, there's contractual reasons not to? Well, it's on the selling spodumene. It's really strategic reasons is that we wanna convert it and sell the finished products to customers where we've made commitments, and we have long-term arrangements. You know, we might sell some spodumene here and there, but, you know, that's not our strategy. Then the starting up, we're gonna start the first train, then the other. It's really meant to be in line with our conversion capacity. That timeline that you referenced, where it's six or whatever the timeframe is to get it going, you know, you've got labor issues in Western Australia. We face the same things there that we do at Kemerton to some degree. Really, the lead time is on some of the big equipment that's necessary in mining, some of the yellow, we call it, they call it yellow equipment, that's necessary in operating these mines and the lead time on that. Understood. That's very helpful. Then I just wanted to ask about tolling as well. It sounds like there's more tolling due to labor shortages or labor strikes in Chile. How would your volume trend without tolling, and when do you anticipate rolling off the tolling contracts related to the La Negra startup? I think you had said you were bridging some capacity with that. Right. Well, I would say tolling is a strategy we use for bridging. That is correct. We do that. We expect to continue to toll next year for the purposes of La Negra, but also for the purposes of Kemerton. Look, I mean it's a bridging strategy, but the market is extremely strong right now. Because Kemerton has been delayed, there's spodumene that we can take advantage of. As long as we have a qualified tolling partner that is someone with whom we have a good relationship, we trust their quality, we have a business relationship where we can collaborate together, then we'll take advantage of that, both to bridge and to take advantage of the strong market that's before us. I think it's a variety of purposes. When it rolls off is hard for me to say, but we will have it as part of next year for sure. Your next question comes from the line of Colin Rusch with Oppenheimer & Company. Guys, thanks so much for all this information. I'm curious about the order patterns from your customers, you know, and this is across the units. If you're seeing any sort of double ordering that you can track or, you know, and track all of the sell-through for those individual customers. It just seems like that there may be, you know, some folks trying to build some inventory or really trying to, you know, get prepared for any other incremental demand that they can meet. Colin, Eric, from a lithium perspective, I would say that we touch all aspects of the supply chain. I don't see any double ordering. Furthermore, to buttress that remark, I would say that the discussions we have with our customers, we know they don't have any inventory. They are hand to mouth. We know that because with the crises existing around the global supply chain, you can imagine we're not always able to precisely target the week or the day at which a shipment's gonna arrive, and that causes pain for the customer, right? It causes just as it does for us, it does for them as well. It's a very tight market still in lithium. Colin, for bromine, we're not seeing any double ordering. Customers are not, you know, trying to build inventory at their sites in anticipation of supply chain disruptions. Supply chains are tight, and things are difficult, but we've been able to manage it to a certain extent to where we can deliver within a window that they can live with. We're not seeing those double orders or customers trying to build up inventory by ordering more than they need right at this time. Nor in Catalysts either, Colin. Okay. Thanks, guys. Just on the lithium content per kilowatt hour, you know, are you guys seeing any real trend lines on that? Certainly, as some of these battery chemistries change, you know, and folks are looking to figure out how to optimize some of the materials. Are you seeing, you know, lithium content increase, decrease, you know, kind of hold steady? Where would you peg that level right now? For the most part, Colin, I don't think as we sit here and look at the year 2021, we've seen any material change. Certainly we would expect it over a period of years as prelithiation enters the equation on the anode side and further progress on solid-state or lithium metal anode technology progresses, that's definitely gonna increase the content as it does obviously the energy density, which is sort of the whole point of those technology innovations. I'd say as we sit here today, I think the technology trends are alive and well, but it's on a quarterly basis during 2021, really haven't seen significant change necessarily in that. Your next question comes from the line of Arun Viswanathan with RBC Capital Markets. Great. Thanks for taking my question. I guess I had a question just on the contracting process here. What are you hearing from your customers as far as, you know, length, are those contracts in lithium extending out now, you know, to four or seven or 10 years? When you do those contracts, how do you kind of bridge the divide between, you know, this huge spot price of $28,000+ per ton and, you know, something more reasonable and more in line with, you know, increases from where you are on the contract side? I guess I'm just asking, have you seen a material rise in the cost curve that would justify contracts going closer to spot? Thanks. Arun, I would say that there's the duration of requests from customers are increasing. You know, I think we've characterized in the past, and on average it's about three years in our current mix. The new contracts under discussion, which would be slated to supply against the China expansions that Kent described or future Kemerton expansions or even down the road expansions we could have in the U.S. Those discussions are either five-year plus, or they don't even start until 2024, 2025. We're having contract discussions with certain customers who are contracting for increments of time into the future, say 2023-2026 or 2024-2028. Those are the kinds of durations that people are thinking about, and that's largely driven by the investments made on the automotive side. From a pricing standpoint, you can imagine because prices are rising, there's certainly a desire on behalf of those buyers to do what they can to not have to pay spot prices. The reality is, they're either the discussion is either towards a much higher fixed price if they want some stability in their pricing term, or we're pricing against an established index so that it will rise with time. Now, remember, the price you gave was a spodumene price when you said $2,800 a ton. The pricing in China is on a U.S. basis, is in high $20s, close to $30 on a delivered basis. When you look at many of the indices around the world, most of these people are buying against a blend, and so the pricing around that is not quite as high, but it's still well into the high teens, if not the low twenties, of where a lot of those pricing indices are. We continue to have a discussion with customers, and but those are some of the dynamics at play, which are leading us to long-term contracts with significantly higher price potential than what we've seen in the past. Great. Thanks for that. I guess just wanted to ask about if there's any risk you see on the political front in Chile. Yeah, just a broad question, I guess, in the next month or two or so. Yeah. Well, I mean, there's a lot happening in Chile, so there's definitely political risk in Chile. They rewrite the Constitution and things are changing. I mean, we watch it closely and we operate there. So we and we're pretty close. I mean, we're close to the government. We see what's happening, but they're rewriting their constitution, and there'll be changes in Chile. I think that Chile wants to participate in lithium industry. They're looking to expand their participation. The contracts that the agreements they have with us are very progressive, so they participate as prices go up. So that's an upside for them. So, you know, I believe they're going to. They want to participate in that economically. You know, there's a lot happening in Chile at the moment, and we're watching it very closely. Your next question comes from the line of Matthew DeYoe with Bank of America. Thank you. We touched a bit on tolling, but I wanted to kind of delve a little bit into it a little bit more because I know you said it's a bridging strategy and maybe we can be opportunistic, but you're sitting on a fair amount of latent capacity at Greenbushes. You know, the read seems to be that converters are struggling to find enough merchant supply of spodumene to actually kind of continue to operate in some respects. Why not get more aggressive on the volume? I have to think, you know, one, prices right now are really attractive, but two, almost somewhat concerning as it relates to the potential for over-investment and overheating in markets and things like that. I feel like if you, with your volume, you might have an ability to kind of regulate this a little bit. I mean, I'll make a comment. Eric can add some color on me. You know, we can't just turn a toller on because they're going to our customers. We have to qualify them. There's a process there. Not all of those tollers would qualify with our customers. We can't just turn them on. It's not quite that simple, even if we had the product. Now we're ramping and getting more spodumene going. It could give us optionality from spodumene standpoint going forward, but we still have to make sure we choose the ones, and Eric talked about it before. There are tollers that we have relationships with that have been previously qualified or currently qualified with our customers. You have to fit in all those elements into it. To really ramp it up, it's not a six-month strategy. It's gonna take a little longer to implement that. Okay. Eric, do you want to add anything? No, I think you've handled it well. I mean, it's I don't think of these converters as a dime a dozen. There are people who are in the industry, but there's only several that we would consider as being partners or meeting our standards for serving our customers. So that's why there's a length involved, that and the qualification process. So if there's opportunities, we'll take advantage of them, but we are very discriminating in how we approach that from a. When it comes to serving our customers. Yeah, key for us is the, I mean that, again, security of supply, quality for the customer, the customer has to trust us. If we're gonna toll, we have to make sure that product meets our specs and our customers' standards as well. Yeah, fair point. We almost got there with Jeff's question. You know, if you look at Chinese bromine price, I know in the past, it's been kinda comments are maybe it's not correct on an absolute basis, but directionally it's, you know, consistent with what you're seeing. I mean, given the move, should we think of this move as as real and capturable in any capacity? If so, is this a two-year process, a one-year process, a three-year process? It would seem like there's a lot of room to offset higher chlorine costs as well, but I'm not sure if that's the case or not. Yeah, this is Netha. Yeah, those prices are real, and they're really driven by demand. The demand is outstripping the supply. It takes almost two years to really bring on additional bromine supply in a meaningful way. You'll continue to see that demand outstrip supply, and similar to what we said in our investor day, for the next planning period that we use, and we think that will continue. The question is by how much? You know, we've announced processes and things we wanna add, and I'm sure others have as well. Right now, it's not complex. Demand is really exceeding supply, and that's what's driving the Chinese bromine price up. Your next question comes from the line of Christopher Parkinson with Mizuho. Hi, this is Harris Fein on for Chris. Thanks for taking my question. Turning back to Wodgina. So how should we be thinking about the cost that's associated with bringing that back into production? And then understanding that Greenbushes is in a class of its own when it comes to cost per ton, how should we be thinking about the relative cost of spodumene that comes out of Wodgina? This is Scott. I think as you said, you know, Talison spodumene world-class, right? Low cost in the world. You know, Wodgina, we haven't operated yet, but we do believe it's gonna be relatively close. Ultimately, it does have a lower concentration, so it won't meet it, but it'll be relatively close. To maybe say in the ballpark. Yeah. It's in the ballpark. I think, Scott, the costs for this, Harris was asking about how to think about it. We've captured them in the guidance we've provided, both capital, cash flow. It's largely joint venture capital costs to acquire this yellow equipment that we've talked about and ramp the JV. Got it. A lot of the Wave 3 announcements that you've made so far, actually all of them, that have been disclosed, are really planned in China. I'm curious what the strategic rationale was to focus so much on China, and I'm wondering whether it was a matter of lower capital costs or whether or not you see the Chinese market drifting more towards high nickel, and you know, whether or not you expect most of those tons to stay domestic or make their way into other markets. I mean, I think it's. I mean, Eric can get into detail, but kind of at the high level, I mean, it is. I mean, we do see lower capital costs there. That's probably not the driver. The driver, that's where the market is today. That product can either serve Chinese market or be exported as well. As we anticipate seeing the battery supply chain shifting to the West, we will invest ahead of that. For the near term, we see that market in China today, then we see that kinda as we go forward. You hear us talking about North America and Europe to some degree, but we see that moving west, then we will invest with it. Eric, you wanna? No, I mean, I think if you look at the percent of production of cathode on the world market, China is well over half of it today, and that will increase between now and the middle of the decade. China is the center of the world for all cathode technologies. Now many of those are being developed. The supply chain's being developed prospectively to come into and match up to battery production ultimately in North America and Europe. That's why we have a Wave 4 plan that addresses that and it will speak to those opportunities to localize supply, and it's an active program with us. As we've said many times, Wave 3 is largely Asia-centric, heavily China-focused because that's where the market is, and we will build that repeatability of capital design and execution there that will serve us well as we continue to grow around the world. It's also where a large majority of our resources are in Asia, albeit Australia, but in the Asia region as opposed to the Western part of the world. Those are all the elements that play to that strategy, and we look forward to growing with our customers as they expand into the West. There are no further questions. I would now like to turn the call back over to Mr. Kent Masters for closing remarks. Okay, thank you. Thank you all again for your participation on our call today. As we approach the end of the year, I'm extremely pleased with the progress and the focus our team has demonstrated. I look forward to updating you in February when we announce full-year results and provide more detail on the 2022 objectives and outlook. This concludes our call, and thank you for your interest in Albemarle. Ladies and gentlemen, thank you for your participation in today's call. You may now disconnect at this time.