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Amid a Booming Demand for Lithium, Labor Shortages Are Only ‘Getting Started,’ According to Albemarle’s CEO

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The electric-car boom has created some surprising winners. The stock of Albemarle is trading at record highs as investors focus on its role in the electric-vehicle supply chain. The North Carolina–based company, whose origins date back to making paper in 1887, is one of the world’s leading suppliers of a key component in EV batteries: lithium. Albemarle operates facilities that mine or process lithium in countries including Chile, China and Australia, and despite the billions of dollars pouring into potential lithium mines in the U.S., Albemarle currently operates the only such active mine in the U.S., located in Silver Peak, Nev.

The demand for lithium goes beyond Priuses and Teslas. Lithium-ion batteries power critical aspects of the modern mobile economy, including smartphones and laptops. Lithium is also used in industrial greases and in the treatment of bipolar disorder. The metal is extracted either by open-pit mining, which takes a heavy toll on the environment, or through the brine method, which uses tremendous amounts of water. That method can be an issue in areas of Chile, where lithium is extracted and processed because water is scarce.

“We’re trying to reduce our environmental footprint there,” says Albemarle CEO Kent Masters. Masters says the company has invested $100 million in a thermal evaporator at its processing plant in La Negra, Chile, that will double the facility’s capacity without using any more fresh water. “We’re very, very focused on sustainability because it’s so important to our customers—it’s important to us because we want to be a good corporate citizen and stewards of the planet, but it’s also important to our customers because it’s really a key part of their value proposition to their customers. The automotive [companies] are selling a clean way of transportation with electric vehicles, and they want their supply chain to participate in that piece.”

Like nearly every CEO I talked to this summer, Masters said Albemarle is also dealing with labor shortages, key product outages and disrupted transportation networks. Unlike other CEOs, however, Masters doesn’t think the tight labor market is transitory. “It feels like it’s just getting started,” says Masters.


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(This interview has been condensed and edited for clarity.)


How important is lithium in the modern economy?

It’s really hard for me to contemplate much of modern life without these batteries that enable so much.

Are you and the industry able to keep up with the rapidly growing demand?

Our plants are running as hard as we can run them, and we’re selling everything that we can make.

You are considering reopening a mine Albemarle owns in North Carolina?

We’re planning to consider it. We’ll have to understand the permitting, the operating of a mine like this in the U.S. and the economics of it. At best, it’s five years before we could get it up and operating. We want to see what the Biden Administration’s policies are going to be around mining and critical minerals in the U.S.


You do a lot of business in China. How concerned are you about the state of Sino-U.S. relations?

We expect to continue to be able to do business [in China]. They’re the leaders in electric vehicles. They sell more and operate more electric vehicles on the road than any other country. We watch it very closely. The relationships between China and Australia, China and the U.S., China and Europe are important for us.

How do you see the EV market shaping up globally?

China was the first to really push electric vehicles and get them in scale. Europe has really accelerated their demand and market for electric vehicles. Most of the economic incentives put out from the pandemic in Europe were focused on clean energy and particularly electric vehicles, so Europe is catching up a little bit and then the U.S. comes behind that.

Are you looking at mining lithium from the bottom of the ocean floor, so-called seabed mining?

Yes, I would say we look at everything. The idea is out there, but we don’t have a project that we consider viable from a seabed perspective today. It is not in our five-year planning horizon, that might be at the 10-year horizon.

Where are you seeing shortages or disruption in your supply chain?

We are seeing some shortages in raw materials and chemicals. We’re trying to figure out if that’s a short-term issue caused by that Gulf Coast storm, but we’re not 100% sure about that. And then the other is global transport, ocean-going freight, which we do a lot of. That is that the supply chain has been really disrupted from the pandemic, and it’s not back yet.

Is that manifesting itself in higher prices or longer delivery times?



How do you manage that and respond to that situation?

We’re trying to tighten our supply-chain management. The ocean-going freight business is not one that is easy to track historically, and we’re trying to digitize that work with our suppliers to make sure that we have got real-time information to know where things are. So, it doesn’t necessarily stop things from being late, but it gives us a heads-up that they will be and that we can mitigate them through other means.

What raw materials are hard to get?

It’s basic chemicals and some of the specialty stuff that we buy. It can be across the board. You see the economy coming back and businesses ramping up. The good news is the market is there, but we’re struggling to get the raw materials to meet demand.


And what about labor: Are you having trouble hiring workers?

Yeah, we are. We have struggled in certain locations to get the number and the quality of people. It’s site-specific.


How are you responding?

We respond by trying to recruit better. It ends up being either benefits or salary. We’re competing with other people in a tight labor market.


Are these entry-level jobs or more technical and skilled positions?

I would say it is across the board, but it seems to be more acute in that middle range–skilled people in finance and functional groups as well as technical teams.


Do you see the hiring pressures alleviating?

It feels like it’s just getting started.

How do you feel about the economy? It feels like things could go either way.

The economy looks good. There are good opportunities, but there are challenges. But that’s what business is about. We solve challenges every day. I joke that if we only have one crisis a week, it’s a good week.


What’s your crisis this week?

It’s Monday. I haven’t had a crisis this week.


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