Hello, everyone, and welcome to the Q2 2022 Albemarle Corporation Earnings Conference Call. My name is Nadia, and I'll be coordinating the call today. If you would like to ask a question at the end of the presentation, please press star followed by one on your telephone keypad. Please note we will take one question and one follow-up. I will now hand over to your host, Meredith Bandy, Vice President of Investor Relations and Sustainability to begin. Meredith, please go ahead. Thank you, Nadia, and welcome everyone to Albemarle's second quarter 2022 earnings conference call. Our earnings were released after the close of market yesterday, and you'll find our press release and earnings presentation posted to our website under the investors section at albemarle.com. Joining me on the call today are Kent Masters, Chief Executive Officer, and Scott Tozier, Chief Financial Officer. Raphael Crawford, President, Catalysts, Netha Johnson, President, Bromine, and Eric Norris, President, 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 laws. Please note the cautionary language about forward-looking statements contained in our press release and earnings presentation. That 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 in the appendix of these slides. Now I'll turn the call over to Kent. Thanks, Meredith, and thank you all for joining us today. On today's call, I will highlight our second quarter results and achievements. Scott will provide more details on our financial results, outlook, balance sheet, and capital allocation. I will then close our prepared remarks with an update on our operating model and strategic growth projects aimed at further strengthening our long-term financial performance and sustainable competitive advantages. Albemarle's leadership positions in Lithium and Bromine, coupled with our team's ability to execute through the current inflationary environment, led to another quarter of strong results. In the second quarter, we generated net sales of $1.5 billion, nearly double the prior year. Second quarter adjusted EBITDA of $610 million was over three times the prior year, continuing the trend of EBITDA significantly outpacing sales growth. The supply-demand balances remain tight in the markets we serve. Strong market prices and our continued success in contract renegotiation drove the tremendous strength we are experiencing in our lithium business. As a result, we are again raising our 2022 outlook and now expect to be free cash flow positive for the year. Scott will review the key elements of that outlook later on in the call. We are also successfully executing our growth strategy. Our Kemerton 1 lithium conversion plant in Western Australia achieved first product in July. I want to especially congratulate our teams in Western Australia for their hard work and dedication in achieving this goal. Lastly, we made a major announcement regarding plans to build an integrated lithium mega site in the United States. This will support our western expansion and the development of the battery materials supply chain in North America. Now I'll turn the call over to Scott to walk through our financials. Thanks, Kent, and good morning, everyone. I'll begin on slide five. During the quarter, we generated net sales of approximately $1.5 billion, a year-over-year increase of 91%. This is due primarily to increased momentum in our pricing efforts, as well as higher volumes driven by strong demand across our diverse end markets, especially for our lithium and bromine businesses. We saw volumes and pricing grow in all three of our businesses. For the second quarter, net income attributable to Albemarle was $407 million, compared to $425 million in the prior year. As a reminder, the year-ago quarterly results included a one-time benefit of $332 million related to the sale of Fine Chemistry Services. EPS for the second quarter was $3.46, a year-over-year improvement of 300%, excluding the one-time benefit of the FCS sale. This overall performance was driven by strong net sales and margin improvement, partially offset by the ongoing inflationary pressures we are feeling across all three businesses. Turning to slide 6. Second quarter adjusted EBITDA was $610 million, up 214% year-over-year. The primary driver of the strong growth was higher Lithium EBITDA. Lithium was up nearly $400 million compared to the prior year, driven by momentum in our contracting efforts and overall higher market prices. That's an increase of 350%. In fact, Lithium's second quarter EBITDA was greater than the EBITDA it generated in the full year of 2021. Bromine was also favorable year-over-year, up nearly 50%, reflecting higher pricing driven by tight market conditions and an uptick in volumes, partially offset by raw material and freight inflation. Catalyst was negative in the quarter as higher sales volumes and pricing were more than offset by cost pressures, particularly for natural gas in Europe and raw materials. Finally, we also experienced an overall FX headwind of $14 million for the total company. Moving to slide seven. We are further increasing our 2022 outlook from our last announcement in late May, primarily to reflect the expected continued strength and execution in our Lithium business and further improvements in Bromine. We now expect 2022 total company net sales to be in the range of $7.1 billion-$7.5 billion, up about 115%-125% versus last year. Adjusted EBITDA is expected to be between $3.2 billion-$3.5 billion, reflecting a year-over-year improvement of up to 300%. This implies EBITDA margins are expected to improve significantly to a range of 45%-47% for the total company. Together, this translates to updated 2022 adjusted EPS guidance in the range of $19.25-$22.25. That is about 5x more than 2021. Additionally, we are increasing our net cash from operations guidance to a range of $1.4 billion-$1.7 billion, driven by our updated sales and margin expectations. We are maintaining guidance for capital expenditures of $1.3 billion-$1.5 billion as we drive our Lithium investments forward to meet increased customer demand. Together, the midpoint of our guidance implies approximately $150 million in positive free cash flow for the full year. Further, if you assume our realized pricing remains relatively flat next year, we expect to continue to generate positive free cash flow in 2023, even with continued growth investments. Security of supply remains the number one priority for our customers, and we continue to partner and work closely with them. We are pushing hard to meet those accelerating customer growth requirements. Regarding the quarterly progression of sales and EBITDA, on our last call, we indicated that we expect results to be relatively evenly split among quarters. Given the underlying strength across our portfolio and continued momentum in our contracting efforts, we now expect second half adjusted EBITDA to be roughly 120% higher relative to the first half. Turning to the next slide for more detail on our outlook by segment. Our Lithium business's full year 2022 EBITDA is expected to be up more than 500% year-over-year, up from the previous outlook for growth of approximately 300%. The improved outlook reflects renegotiations of pricing on legacy fixed-price contracts and continued strong market pricing flowing through our indexed referenced variable price contracts. We now expect our average realized selling price to be up more than 225%-250% year-over-year. This is the result of our successful efforts to renegotiate legacy contracts and implement more indexed referenced variable price contracts, as well as a significant increase in index prices. From the beginning of the year to today, indices are up 60%-130%. Note that our outlook assumes Albemarle's expected Q3 realized selling price remains constant into the fourth quarter. There's no change to our L ithium volume outlook for the year. We continue to expect year-over-year volume growth in the range of 20%-30% as we bring on new conversion assets plus some additional tolling. There's potential upside to our outlook if market prices remain near current levels or with additional contract renegotiations or additional tolling volumes. Conversely, there's potential downside with material declines in market pricing or volume shortfalls. For Bromine, we are also raising our full-year 2022 EBITDA expectations with year-over-year improvement in the range of 25%-30% compared to the prior outlook of 15%-20%. This revised guidance reflects continued strong demand and pricing from end markets such as fire safety solutions and oil field services, plus other macro trends such as digitalization and electrification. We expect higher volumes of 5%-10% following our successful execution of growth projects last year. For catalysts, full-year 2022 EBITDA is expected to be down 25%-65% year-over-year. This is below our prior outlook due to significant cost pressures, primarily related to natural gas in Europe, certain raw materials, as well as freight, partially offset by higher sales volumes and pricing. The large outlook range for catalysts reflects increased volatility and a lack of visibility, particularly related to the war in Ukraine. Given the extraordinary circumstances and the resulting changes in oil and gas markets, the business continues to aggressively seek cost passthroughs, particularly for higher natural gas costs. The strategic review of the catalyst business is ongoing, but it is taking longer than we anticipated. As soon as we have any news, we will provide an update. Turning to slide nine for an update on our Lithium pricing and contracts. This slide reflects the expected split of our 2022 Lithium revenues. Battery-grade revenues are now expected to make up approximately 85% compared to 70%-80% in our prior guidance due to successful contract negotiations and higher market indices. Of the total battery-grade revenues, 15% is expected to be from short-term spot purchase orders. 65% is expected to be from index reference variable price contracts. Pricing on these contracts generally reset with a three-month lag, and a number of these contracts do have floors and ceilings in place. The remaining 20% comes from legacy fixed contracts with price reopeners, normally every six or 12 months. Since we last updated the outlook in late May, we have successfully repriced a portion of these contracts to better reflect the current market price environment. This segmented approach to contracting gives more flexibility for our customers while allowing Albemarle to preserve upside and ensure returns on our growth investments. Our operations and project teams are also delivering volumetric growth. Slide 10 shows the expected Lithium sales volumes, including technical grade spodumene and tolling sales. In 2022, we expect volumes to improve 20%-30% year-over-year. This growth is largely driven by our expansions at La Negra and Kemerton, the acquisition of Qinzhou, as well as some additional tolling volumes. Looking forward, we expect volumes to grow approximately 20% per year from 2022 to 2025, driven primarily by the ramp-up of new conversion assets. We see room for further upside from additional conversion assets such as our Greenfield and Meishan or additional tolling volumes. Turning to Slide 11, our strong net cash from operations and solid balance sheet give us ample financial flexibility to execute our growth strategy. Our balance sheet is in great shape with $931 million of cash and available liquidity of $2.6 billion. Current net debt to adjusted EBITDA is approximately 1.7x. With rising EBITDA from higher pricing and volumes, we expect leverage to trend lower in the near term. This gives us plenty of capacity to accelerate our growth investments or value creating M&A. During the second quarter, we extended our debt maturity profile through a public offering of senior notes. Proceeds total approximately $1.7 billion, a portion of which was used to redeem senior notes maturing in 2024. 92% of our debt position is at a fixed rate, which buffers us against the impacts of this rising interest rate environment. Before I turn the call back over to Kent, I wanted to briefly review our capital allocation priorities and our ability to adapt to market changes while building durable capacities to support growth. Our capital allocation priorities are unchanged. We remain committed to strategically grow our Lithium and Bromine capacity in a disciplined manner. Capacity growth will also be supported inorganically by continuously assessing our portfolio and pursuing bolt-on acquisitions at attractive returns to strengthen our top-tier resource base. A perfect example of this strategy is the $200 million Qinzhou acquisition that is expected to close in the second half of the year. Maintaining financial flexibility and shareholder returns are also key capital allocation priorities. We remain committed to maintaining an investment-grade rating and a strong balance sheet to provide significant optionality to fund future growth. Finally, we also plan to continue to support our dividend. We are laser-focused on the durability of our business. The management team and the board regularly review our capital allocation priorities and have identified levers we can pull to quickly adapt to changing market conditions if needed. These include slowing non-growth CapEx, reducing discretionary spending and hiring, shifting production volumes to highest demand markets, and accelerating partnering and tolling arrangements to support cash generation. Additionally, a downturn may allow us to take advantage of lower-priced acquisitions, capitalizing on the strength of our balance sheet. In summary, we believe Albemarle's ability to maintain a focus on growth through all market conditions is strong. Thanks to our operating model that Kent's going to discuss next. Thanks, Scott. Let's turn to slide 13 to discuss our cost structure and how we are managing inflation. Our vertical integration and access to low-cost resources for Lithium and Bromine allow us to avoid the worst impacts of inflation and control our cost structure. For example, while approximately 45% of our costs come from raw materials and services, actually 20% of those costs relate to our owned spodumene. The implementation of our operating model, the Albemarle Way of Excellence, is also helping manage costs. In 2020, we identified our supply chain as a key area for improvement. At that time, we reorganized to form a global supply chain function and implemented a new enhanced procurement strategy. That team's efforts are now paying dividends. Last year, our procurement team set a target to achieve $90 million in value creation by 2022 year-end. We are on track to meet or exceed that target by about 40%. About half is from cost savings with lower year-over-year cost, and about half is from cost avoidance, where procurement efficiencies have allowed us to realize below-market increases. An example of cost savings includes logistics efficiencies, minimizing material handling, maximizing equipment capacity, and shortening haul routes. Cost avoidance includes using fewer suppliers and pooling buying for key raw materials and services to offset inflation. In other cases, we've shortened supply chains to improve resilience and reduce total cost. This success is driven by diverse teams, including supply chain, procurement, and production scheduling. Thanks to everyone across the enterprise and around the globe. It took commitment from every individual to make this happen. Our operating model is also focused on building the structure, capabilities, discipline, and design approach to enable faster capacity growth. As a leading lithium producer, Albemarle is investing in lithium production around the world, including China, Australia, and the Americas. This year, we plan to deliver projects that more than double our annual capacity from 85,000 tons to 200,000 tons by year-end. We are also progressing a portfolio of projects that can grow our conversion capacity to as much as 500,000 tons per year on a 100% basis. As you can see, the near-term projects are largely in the Asia-Pacific region. Longer term, we expect to transition to a more localized supply chain in North America and Europe. Turning to slide 15, our capacity additions in Australia and Asia significantly enhance our ability to leverage our low-cost resource base. In terms of lithium conversion capacity, we've made progress on the regulatory approvals for the acquisition of the Qinzhou conversion facility. We continue to expect that acquisition to close in the second half of 2022. In the meantime, we continue to toll spodumene through this facility. As I mentioned earlier, Kemerton I has achieved first product. This important milestone signifies that the manufacturing processes and equipment can meet the project's design objectives. Our focus now is on qualifying our product with our customers. At our China greenfield expansions, construction of a 50,000-ton per year lithium hydroxide conversion plant at Meishan is well underway. Importantly, with our ownership stakes at the Wodgina and Greenbushes lithium mines, we already have access to low-cost spodumene to feed these conversion facilities. The restart of the Wodgina lithium mine by our JV partner, Mineral Resources, is going well. We continue to negotiate agreements to expand and restructure the MARBL joint venture, and we'll update you when we have more information. We also have a 49% stake at Greenbushes, one of the best lithium resources in the world. The Talison joint venture is ramping up chemical-grade Plant 2, or CGP 2, and has approved construction of CGP 3, which has broken ground. Our intention is to ramp up lithium resources in advance of conversion assets, in which case, in the near term, we could be net long spodumene. If that's the case, we will elect to toll spodumene or sell spodumene into the market if it's economical to do so and if it allows us to bridge until new conversion assets ramp up. Albemarle is the leading global lithium producer with a significant U.S. presence and access to some of the world's best resources. As such, we are well-positioned to establish the world-class production of battery-grade lithium that enables the localization of the battery supply chain in North America. This would offer important benefits to U.S.-based automotive OEMs seeking a de-risked local supply chain, more reliable logistics, and a reduced carbon footprint. We plan to leverage our Kings Mountain lithium mine, a top-tier resource, and build a multi-train conversion site in the Southeast. This site would be capable of handling mineral resources from Kings Mountain, as well as recycled feedstock. This Mega Flex site would leverage Albemarle's best-in-class know-how to design, build, and commission both resource and conversion assets. This creates significant competitive advantages for Albemarle and its customers while also addressing the need for localized lithium supply to support growing demand in North America. In closing, on slide 17, we expect to achieve significant growth milestones this year, thanks to strong end market demand as well as actions that we've taken to invest in profitable growth for Lithium and Bromine. Those investments are now paying off as we ramp up volumetric growth. To maintain our financial flexibility to fund growth through cash and our balance sheet and to leverage our operating model to manage cost and execute our growth projects. This concludes our prepared remarks. Now I'll ask Nadia to open the call for questions. Thank you. If you would like to ask a question today, please press Star followed by one on your telephone keypads. If you choose to withdraw a question, please press Star followed by two. When preparing to ask your question, please ensure your phone is unmuted locally. Please note we'll take one question and one follow-up. Our first question today comes from P.J. Juvekar of Citi. PJ, please go ahead. Your line is open. Yes, good morning. You know, Kent, your volume growth has been very impressive. Can you discuss your key steps you're taking at Kings Mountain in terms of building the mega site? What environmental permits do you need, or are you engaging with the community today? The same question on Silver Peak, when you expand that, what kind of production ramp-up can you see? The two sites are slightly different scale. Kings Mountain is a significant site. Silver Peak is smaller, but still the expansion is important. I mean, that is the only kind of lithium source in the U.S. today. At Kings Mountain, we are early in that process. We're still in pre-feasibility, so we've got to do permitting. We have done a lot of work already. We've done all of the drilling necessary. We continue to do some of the drilling to understand the resource at Kings Mountain, but we still got to do permitting. We've engaged with the community. We've been doing community meetings for almost six months now, maybe not quite six months, early in the year that we started that process with public meetings. We've opened an office in the town so people can come in and ask questions. We've really engaged with the community early on. We're working on the permitting processes that we have to go through, but it's in a pre-feasibility study. We feel confident we'll be able to get there at Kings Mountain, but there's a lot of work to do, including all of the permitting. Great. You have a strong balance sheet. You will be free cash flow positive this year. You talked about M&A. Can you give us some idea of what you would potentially be looking at? Would you look at technologies like DLE, or what geographies would you look at? Thank you. Yeah, well, I think it's what we've really always talked about from an M&A standpoint. If we see conversion assets that we think are attractive, so we would do that, but consider that as a bolt-on. Technologies, if we see technology to help us, so direct lithium extraction could be part of that. Then resources. We continue. I mean, we are good on resources, you know, pretty close to the end of the decade, but we need to be planning now to build out our resource base past that. I think those are the three primary categories. Thank you. Thank you. Our next question comes from Christopher Parkinson of Mizuho. Christopher, please go ahead. Your line is open. Great. Thank you so much for taking my question. Just turning to slide 18, the third and the fourth point, can you just give us a quick update on terms of, you know, some of the contract renegotiations on additional tolling? I mean, on the former, what percent, you know, are still up for renewal, that have essentially given you the momentum to raise guidance twice, you know, in the last quarter and a half or so? Just any color you could offer on that would be very helpful. Thank you. Go ahead. Morning, Chris. It's Eric here. What we've been able to do, just to recap this year, is we've been able to renegotiate contracts that have opportunities for reopeners or with customers who are seeking additional volume commitments in the out years. In order to entertain those discussions, we've been able to ask for higher prices on legacy contracts. We don't have, you know, any contracts that are expiring anytime soon. Most of our book of business is committed. We're very tight in the next year or two as we anticipate bringing on new capacity from some of the projects Kent described. That doesn't mean we won't have opportunities. There might be still some contracts that shift. The big thing that's happened in the past year has been the movement to now having two-thirds under an index reference variable price, whereas before, most of that was fixed. Now our movement's gonna be very much driven by market prices and some potential changes on the margins of a few contracts, or potentially, if prices remain where they are, some resets on some of the fixed price contracts. Got it. Just a quick follow-up. Just you've also seen OEMs make a very conscientious effort and been a little bit more decisive in attempting to lock in an incremental supply through, let's say, the middle and the balance of the decade. I mean, has that been fully reflected in your negotiations in terms of just what you're willing to commit to them? You know, as we progress over the next year or two, you know, it seems like there's still a bit of a bottleneck in terms of the OEMs versus what's available in lithium in terms of, you know, battery-grade hydroxide. You know, what else, you know, are you willing to do to help facilitate their growth plans? How should we think about that just from a broader market perspective, you know, you versus some of your peers? Thank you. Well, look, we're working with our customers, and we are being very aggressive about adding capacity. I think you see that in our investment plans, and they're coming through now, and we get better at that. The period when those come on, we believe we're able to execute better from a conversion. We're good on resource for a number of years, but we still need to add that. We work with the customers to do kind of unique arrangements. We're having conversations with our customers about those, but they have to work for us. We're working towards some arrangements like that, so they may or may not come to pass. I can't say that 'cause those are conversations and discussions that we're having. We're in those discussions, but we're committed to build capacity to serve the customer base over the long term. Yeah. I think what's also unique, Chris, just to add is that we're speaking with OEMs and battery companies on three different continents. Out in the out years, you saw one of the charts where we're looking towards Europe, so that's the furthest south. Where we are established well now is in Asia. Where we've announced next we're headed is North America. We've got the resource base, as Kent described, to be able to do that. Between that localization, which is very important to these OEMs and battery producers, the sustainability principles in which we operate, and then some of the new technology areas we're focused in for next generation technology, the partnerships we strike are gonna fall in one of those dimensions. We're not in a position where we need to raise capital, so we can look at and have been discussing with various producers, various OEMs upfront and potentially forms of investment, but that's not a requirement for us. We don't need that capital. It would only be something we do as part of a broader deal to advance our strategic agenda and help our customers win in the market. Very helpful. Thank you. Thank you. Our next question comes from David Begleiter of Deutsche Bank. David, please go ahead. Your line is open. Thank you. Good morning. Question for Eric. Eric, just on your slide nine, can you talk through the difference of pricing between the index reference contracts and the spot prices in Q2, and how that compare versus Q1? I'm sorry, David. Make sure I understand your question. You're wondering how they compare now, the prices versus back in Q2? The price difference between. I'm sorry, or Q1? the index reference and spot prices in Q2 versus differential in Q1. Oh, okay. I'm sorry. We don't give enough detail to disclose that, but I will say that you know that spot prices, you would know by looking at indices are, they vary, but currently in the low 60s in China. They're actually some contracts outside of China are even higher now at $70. We are not there yet on our index pricing, which is one of the reasons our guidance is if prices stay where they are, we could continue to have a rising mix increase in our variable-based contracts. Understood. Just on the Southeast project, have you given out any cost or timing indications for that project? David, we have not given out any costs yet since it's really in pre-feasibility. Timing-wise, it's gonna be later in the decade when that would come online. Clearly, it needs to have a feedstock with a mine, and that's probably the long pole in the tent. Understood. Thank you very much. Thank you. The next question goes to Josh Spector of UBS. Josh, please go ahead. Your line is open. Yeah. Hey, guys. This is James Cannon on for Josh. Just wondering why it seems like the sales drop through the EBITDA in this earnings upgrade is much higher than the last update through the year. Could you give any color as to why that is? And similarly on FCS, has anything in the underlying business changed to improve that? Yeah, James. I think the big difference is this upgrade has been purely driven by price. You're seeing that drop through, and we're not seeing the same impact from spodumene, which was a drag. The spodumene price increases was a drag on our earnings in the last guidance. As you look at free cash flow, we continue to see improvements there driven by the growth in EBITDA. Because of some of the tolling efforts that we're doing, we're actually absorbing some of the inventory that we didn't have before. Seeing a better working capital profile as a result. Okay, great. Thank you. Thanks. Thank you. Our next question goes to Colin Rusch of Oppenheimer. Colin, please go ahead. Your line is open. Thanks so much. Can you guys just talk a little bit about the ramp-up at Kemerton and any surprises you're seeing at this point? Any concerns around labor or any equipment that you're concerned about here as we start moving forward? Yeah. I mean, look, we've just made first product last month, and we're just starting to ramp up. I think the key thing for us if we're able to make product at, and are comfortable with the quality, it means that our process chemistry is right, and so there are no surprises really around the kinda core process chemistry around that. That was a big milestone. That's kind of the first big hurdle that you wanna clear. Then now it's just getting everything run at scale and get purities up to our specifications. As you kinda run in a new plant, we continuously see that the spec on battery-grade material is very high, and so it just takes a little bit of time to get to that, and it takes volume to do that. It's just about ramping up. We feel very good about the process chemistry and that the plant will be a good operating plant. It's just that we need a little bit of time to ramp it up and get to those purities we need, and then we have to go through the qualification process with our customers. That's on the first train. Second train is still on schedule. That we've indicated in the past and the learnings we had on train one, we've stumbled a bit on train one with issues in getting it there. We think as we saw those, we've rectified that for train two. There's still labor issues in Western Australia, but I think we're through the worst of that because we're past most of the big construction elements of it. Now we're into commissioning on one and just finishing up construction on two. There's still labor issues in the operating facility, to some degree, but that's kind of business as usual in Western Australia, I would say. Thanks so much. On the North America potential expansion, can you just talk about philosophically how you're thinking about contracting that out? Is that, you know, something where you would think about taking in prepayments to lock in volumes with customers? How far down the road are you in terms of the thought process and the discussions on offtake for that facility? Well, we're having discussions with people, but we're not locked anything in. We have some ideas around some unique models and we're having conversations with people about that. Thanks so much, guys. Thank you. Our next question goes to Vincent Andrews of Morgan Stanley. Vincent, please go ahead. Your line is open. Thank you, and good morning, everyone. You know, Kent, I think when you discussed the mega project, you indicated an ability to take recycled feedstock. I just was curious, one, just for that mega project, you know, how much of a contributor you thought that would be, and whether your customers are telling you or indicating that, you know, obviously maybe more in the out years than anytime soon, that they would like to have some percentage of recycled feedstock in the mix of lithium that they procure. I mean, it's a big part of the conversation, and it's about recycling, you know, creating a recycling loop through the system. It is years out, but we have to design it in. We think we can build it. We'll build it in phases, but ultimately we'll operate a recycling facility at lower volumes at the time, but we'll have time to ramp that up and really learn how to use that, optimize that. That would kind of be our facility that we would learn off of as well. It's part. We're trying to think ahead and design that into a facility so we get scale with the other operating facilities and have the benefit of having an operating plant next door. Thanks very much. Thank you. The next question goes to Kevin McCarthy of Vertical Research Partners. Kevin, please go ahead. Your line is open. Hi, good morning. This is Corey on for Kevin. Going back to slide nine with the contract breakdown in Lithium. I'm curious, versus last quarter, you have more index reference variable price contracts, right? 65% versus 50%, and the fixed contract piece is down to 20% from 30% of your battery-grade revenues. Do you have a number in mind for how low you can go on in terms of having fixed contracts? Like, are you trying to get to all index reference priced contracts? Yeah. I think. I mean, we've talked about this for a while and we've always said we're not sure where this ends up. It's a little bit about how our customers wanna contract and then the direction that we're trying to go. I mean, what you're seeing in that is just how the math is evolving. We've upgraded, we've changed contracts from those fixed. Remember, the fixed prices adjust over time, so they're not really fixed. We're trying to shorten that period as they adjust. I don't really wanna call the mix. I mean, we at one time said we thought it might be a third, a third, a third between those categories, and it's turned out to be quite different. We do wanna have some in the spot category that gives us flexibility. I don't know. It's hard to say where it goes. We're not necessarily absolutely driving it to that variable price, but we kinda like that model where it's index reference and variable. I think our customers are getting comfortable with it as well. The other moving piece as you look at that chart between different presentations is of course where the market indices are. That can drive some mix shifts in those percentages as you go forward. Got it. I guess to stick with that slide, you know, similar question in terms of change quarter-over-quarter. Last quarter mentions product offering. This quarter mentions partnership offering. In the context of one of your competitors receiving a large upfront payment for future capacity, have you approached anybody about similar upfront payments for future Lithium capacity? Or maybe you could talk sort of the philosophical approach to how you want to contract future volumes. Thanks. Yeah. Well, I think we've migrated our philosophy around pricing, contracting over time, and we've talked about that quite a bit, and now that's coming to fruition. Our unique models, we've had discussions for years with people about prepayments and investments and things like that. We've not done that yet. It's not that we're opposed to it, but it has to fit in our philosophy and it has to work for us. It's probably more relevant a few years ago when we needed more cash for our investments. It's less important for us today, but we're still open for those investments. We consider them strategic as part of a relationship and not just because we need the cash. Understood. Thank you. Thank you. The next question goes to Aleksey Yefremov of KeyBanc Capital Markets. Aleksey, please go ahead. Your line is open. Thank you, and good morning everyone. As you re-sign these Lithium contracts, what's your philosophy towards the floor and the ceiling in those contracts? Are you widening that range? Are you narrowing it? Is it kind of staying the same versus what you held in general last year? Yeah. Well, I would. I mean, it's a philosophy, but they are widening and going up. It is. It's definitely not narrowing, so widening, and they're moving up. I guess that's our philosophy. I guess I should assume that the floor is also moving up. Is it fair? Absolutely. As a follow-up question on Wodgina, is the restart contributing in any meaningful way to your second half results this year, or is it mostly a 2023 and thereafter story? There'll probably be some volume coming through Wodgina in the second half, but it's not. I don't think it's material. That'll start impacting in 2023. Great. Thanks a lot. Thank you. Our next question comes from Joel Jackson of BMO Capital Markets. Joel, please go ahead. Your line is open. Hi. Thanks. Good morning. Good morning. On slide ten, you gave your volume guidance again per year. You're guiding to something like 180,000 tons or something LCE in 2023. Could you maybe risk adjust that? How much of that incremental for next year is in the bag? How much maybe you have to work for a bit harder and kind of give the ranges of how you get up to that number? I think that. I mean, if I understand your question from a volume standpoint, right? There'll be. It's ramping up at La Negra and Kemerton and some tolling volumes. It's. We'll be producing tolling from Wodgina and ramping up at the facilities at Talison. It's pretty much within our control. That's. You can put the risk however you categorize each one of those. It's probably. We don't have to do anything extraordinary to get there. We have the plants that we built and now starting up, have to run and produce at volume. Then we just continue to ramp up at La Negra, and we're gonna have some toll volume to handle some of the Wodgina product before we're able to build conversion. That might be. I mean, the tollers we're using we used before. It's new product for them, so there's a little bit of risk in that, but it's not extraordinary. Can I just add, the other component is just the Qinzhou acquisition. We still have to close that. It's progressing well, but again, there's potential risk that just doesn't close. Yeah. No, that's right. That's probably the bigger risk in it. Okay, my second question would be, you know, the DOE seems to be throwing around a lot of money to battery metals, to a lot of smaller companies these days, grants and loans, things like that. You could probably qualify for a bunch of this money. It's not a massive amount of money from where you guys sit, but it's probably a nice little kicker. Can you talk about that? Yeah. I mean, look, it's money that's available strategically. It fits in, right? We're working on that. Nothing we can announce today, but we're working on it. Thank you. Thank you. The next question goes to Stephen Richardson of Evercore. Steve, please go ahead. Your line is open. Hello. Hi. This is Sean on for Steve. Just in terms of just returning back to Wodgina Kemerton production, can you just please walk through how the volumes are flowing through there? In terms of Greenbushes and how the COGS and the costs are moderating throughout the year. Let's just, I mean, Wodgina. We're running Wodgina today. We're ramping up, but we'll eventually toll that. We'll toll that volume until we get plants on that we can process through that. Kemerton is just a matter of ramping. We've kind of said historically, we bring a plant on. Our planning is we give it two years to ramp to full capacity. Now, we would hope to beat that, but that's kinda what we built in. That's what we build into our planning processes. The other was about Talison. That's the expansion. CGP 2 is operating, and CGP 3, which is the next one, we've broken ground on that. We're ramping up CGP 2, we're commissioning and ramping up, and we've just broken ground on CGP 3. I think that's the right- That's correct. CGP 3 would come on and would be available in several years, and it would support some of the capacity expansions that are in one of our charts to talk about further China expansion in Kemerton 3, 4. Of course, as you already pointed out, Kent, the MARBL joint venture. Some of those China plants, at least one would be a part of the joint venture, potentially, and it would take that material. Okay. Thank you. Thank you. Our next question goes to David Deckelbaum of Cowen. David, please go ahead. Your line is open. Thank you. Thanks, Joel, for taking my questions today. Kent, I just wanted to follow up on the conversation around the Mega-Flex site. I believe the target was a hundred thousand tons per annum of conversion capacity. I just wanted to confirm whether you all felt that Kings Mountain and recycled feedstock would be enough to feed up to that capacity as a resource eventually, or if it sounded like earlier perhaps Eric was discussing another need for another asset to support that. Yeah. I mean, I'm thinking, and again, it's pre-feasibility and it's still we're trying to make sure we understand exactly the resource at Kings Mountain, so we're doing more work on that. We think that we could feed that Mega-Flex facility with Kings Mountain plus ultimately at steady state with recycled material that'd get to the scale that you referenced, 100,000 tons a year. Okay. I just wanted to follow up earlier on some of the conversations around upside volumes. It looks like in the current chart that you all sort of are still assuming this 10,000-20,000 tons per annum of tolled volumes, which is I guess basically the levels that you're at in 2022. How significant or how much available capacity is out there that you could theoretically toll into? 'Cause I guess there's also the strategy of selling spot spodumene into the market, which seems like a pivot from sort of previous views that you all had. I'm just wondering volumetrically, you know, how much capacity upside you think that there is in the market? Eric can talk about the tolling, but just on the spodumene, I mean, look, we're just being a little more flexible. That's a bridging strategy. That we've not changed strategy long term about selling spodumene. We want to convert and sell to our end customers the products that they use the lithium salts. But if we ramp up plants. You know, you can't do all this perfectly, right, between conversion and the mine, and we've decided to push the resources in advance of the mines because they have longer lead times typically. We get them up and operating, and if we've got resource available before we have conversion capacity, we'll either toll it or we'll sell spodumene rather than let it sit on the ground. Okay. Yeah. As to the question. Very clear. There's no deviation from the strategy. Yeah. Thank you. That's right. Yeah. There's no deviation from the strategy. As to your question about the availability of tolling volume, there's still a healthy market of conversion capacity being built or operating in China without available spodumene to source against that. It varies by year, and a lot of these projects, it can be opaque sometimes to get the exact numbers. It's a big market, but it can be sometimes 60%-70% utilized. That implies that there's capacity out there. In fact, we know this through our tolling network that's available or coming on, that we can take advantage of. That is a bridging strategy to our own conversion assets, and one which we prefer to do as opposed to selling spodumene directly into the market. Thanks, Eric. Thanks, Kent. Thank you. Our next question comes from Arun Viswanathan of RBC Capital Markets. Arun, please. Your line is open. Great. Thanks for taking my question. Yeah. I guess I just wanted to ask a more high-level question. You noted that obviously your contracts have your results or your guidance has some upside if market prices stay where they are, but also some downside if we do recede from these present levels. What would it take for the market to kind of go back to you know prior levels? Obviously $60-$70 is a new normal. Is it really a new normal? Do we ever go back down into the lower 20s or 30s or 40s? You know, has there been any demand destruction or changes to the adoption curves that you've been observing, especially as the cost of lithium rises in the battery and the vehicle? Right. I mean, look, we're not gonna call the long-term price because we don't know that. I think it will move up and down. It's not gonna just sit where it is forever. That's probably pretty confident in saying that. It will move around over time. We see the market being tight on lithium for a pretty long period of time. Then there might be periods, slight periods of oversupply, you know, and that we see that several, a number of years out, but then that disappears pretty quickly. We model that. I'm sure all of you guys model that, and everybody has their own opinion on it. Prices are gonna move. They're gonna move around, and we can't call it. We do know that the cost to produce to get to the volumes the market needs goes up quite a bit from what we see the cost curve today out over time. Could it move into the 20s and 30s at some point? It absolutely could. We still see the market being tight for a pretty long period of time. And then, um, you know, maybe- Yeah. I just had on your queue. Elaborate on that as well. Sorry, go ahead. You had another question that had to do with cost in the vehicle and technology. I mean, as you know, lithium is a small part of the cost of the battery, but has seen a significant, as you pointed out, escalation in its cost over the past year. I think the other phenomenon that's important to note is the technology phenomenon around innovation and driving out, you know. Longer range, energy density, and penetration doesn't come from lower cost raw materials. It comes from innovation and energy density and more dense materials. That's the movement towards higher nickel. That's the movement towards more elaborate chemistries on the anode side and maybe potentially someday solid state. Those innovations are well and continue down that experience curve, notwithstanding the price of lithium, which again, is a fairly small part of the cost of the battery. Okay, that's helpful. Maybe if I could just elaborate on that earlier what you said. You know, the cost curve now, I guess, are you seeing most of the additions at the upper end of the cost curve outside of yourselves? You know, what would you kinda say is kind of a good range to think of as the cost curve, maybe the upper end? Should we just take kinda spot spodumene prices and use that, and convert that into battery grade? Or how should we think about where the cost curve has moved to now? Well, what we're thinking, we think about it as a longer term to get to the volumes the market needs over time, so new capacity coming on. Some of that is about the quality of the resource, where it is, the technology that you need, or even to develop in order to bring that to market. We don't publish our view of the cost curve, so I'm not gonna talk about those particular numbers. I think from our view, it's moved up over the last several years, and as the market requires more and more volume, it will continue to move up. Okay, thanks. Thank you. The next question goes to Laurence Alexander of Jefferies. Laurence, please go ahead. Your line is open. Good morning. How much could you flex the tolling side of the business and are the margins significantly different from your segment average? Secondly, as you look at the opportunities around recycling, is there any incentive to shift your center of gravity downstream into some more of the processing and you know, are there ways to integrate your knowledge of the chemistry with the downstream processing and capture more margin that way? Yeah. First of all, Laurence, on the tolling, I would say, you know, we're evaluating that now. There is, as per the earlier question, there is capacity in the marketplace, and we will have spodumene coming from MRL, the MARBL joint venture and our partner with MRL that we can put into the market. It could flex upwards from the guidance that we have here. That is possible. Our margins are slightly less, 'cause you're paying a several-dollar-a-kilogram sort of fee over what our normal cost would be. But obviously at current pricing, that's fairly immaterial in the scheme of things. And then your second question, Laurence, was around recycling, going downstream. I think we are looking at this now that we believe, if you look at what it takes to process black mass to various mineral components, that many of the unit operations, in fact, we more than believe we know, that many of the unit operations are very similar to what we do throughout our company and certainly in lithium. Many of the technologies are practiced in our existing operations to process the mineral resources we do. Other than just that last step, processing to battery-grade lithium, we're evaluating just how we partner, invest, and develop that supply chain, which will be a regional effort from region to region because it's a very regionalized business, recycling is. We're in that, and we'll... As we develop that strategy further, we'll obviously share more details of that in the future. Thank you. Thank you. That is all the questions we have time for today. I will now hand back to Kent Masters for any closing remarks. Okay. Thank you, Nadia. Thank you all for the participation on our call today. The momentum we are experiencing in 2022, combined with our pipeline of projects, strongly positions us to execute on profitable and sustainable growth for the longer term. I'm confident in our team's ability to drive value for all stakeholders by accelerating our growth in a sustainable way and to lead by example. Thank you for joining us. Thank you. This concludes today's call. Thank you all for joining. You may now disconnect your lines.