Good afternoon, everyone. Thanks for joining us. Very happy to have the Albemarle team here. We have Kent Masters, chairman, CEO Scott Tozier, senior vice president and CFO. Meredith Bandy, VP of IR And Sustainability, and then Sharon McGee, VP of IR And Corporate Development Really, the way that, that this event got started was, was the approach of, of focusing some on ESG.
So gonna start out there. I'm gonna turn it over, just turn it over to Katz for some opening remarks, and we'll have a few questions on ESG, then we'll dig into lithium. Bromine, Calist, and, capital allocation. So take it away.
Okay. Thanks, Ben, and thanks to Baird for hosting us today. I want to start with a few remarks on Albemarle's strategy and sustainability framework. As most of you know, I joined the company as CEO in April of this year, I've been a member of the board since 2015 with the Rockwood acquisition, and I had been a member of the Rockwood board since 2007. So I'm fortunate that I've been able to work closely with the management team over the years to help establish our strategy, our purpose and values for the corporation.
I'm confident that Albemarle has the right strategy in place, and our execution of that strategy will evolve to address changing market conditions. So specifically, we will invest in and grow our lithium business. We will fund lithium growth with cash flows from our entire enterprise We will maintain a disciplined approach to capital allocation and actively manage our portfolio to generate shareholder value. We will do all of this with a sustainable approach as our foundation. Sustainability is an important strategic priority for Albemarle, and I'm proud to say that more than of our revenues come from products that help reduce greenhouse gas emissions or promote greater resource efficiency.
18, we announced the results of our materiality assessment identifying the sustainability topics, most relevant to Albemarle strategy and our future. That assessment came from employees and leadership, but more importantly, it came from our customers, vendors and investors. With that feedback, we developed our sustainability framework focusing on 4 critical quadrants: first, our people and the workplace. With a focus on essentially how we minimize our footprint and do more with less of the Earth's resources. 3rd quadrant community engagement, having a positive impact on the communities where we live, work and play.
And finally, a sustainable business model, which creates long term stakeholder value through our commitment to quality, innovation, financial stability, and reliability and ethical business conduct. Our recently published sustainability report sets the baseline for our environmental performance and provides greater disclosure and transparency for our stakeholders. Now we are working to establish sustainability goals and targets, and we'll begin measuring our progress toward those goals. We're on a journey, and we know we've got a lot more work to do. But doing the right thing and being profitable are not at odds with each other.
We focused our efforts where they matter most so we can continue to create sustainable value for our customers, investors and stakeholders. So that's the background for me. I'll turn it over to Ben and we can get into Q And A.
For that, Ken. I I need to read this disclosure. Please refer to the Vatic confirmation email, published researcher, Barrett's website for important disclosures regarding the companies to discuss during that bet. Maybe maybe, Ted, could you just talk about, your, your published targets, or goals on stability, and then maybe the methodologies that, are Meredith too, the methodologies you use, in establishing those goals.
Okay. So I'm going to let Meredith go for that.
Okay. Yes. So as Ken was saying in his opening remarks, set the baseline on our latest report, which we published our sustainability report we published in August. And specifically with a focus on some of the environmental baseline data that we needed to do in terms of greenhouse gas and indeed what are some of our primary factors. Next year, we will be publishing those targets that you're talking about then.
And so that'll be looking at balancing things like the growth that we have in our lithium business, which is obviously enabling green energy. But also has its own environmental print. And so making sure that we're managing the intensity of that business, but all the businesses and all to look at water use, particularly in high stress areas. And we'll be looking at other social factors like perhaps inclusion and diversity targets, which have been really important with a lot of our investors and also something we've been talking about internally as well. So that's all worth is underway now.
And have you published probably late spring early summer next year.
Great. And I I think you guys were were doing a virtual, meetings with the clients in Europe. Could go over the past few days. Can you talk about how much, you know, this topic came up in those events and, and areas that the investors focused on, or having focusing on from an ESG perspective?
Yes. So, I mean, it was the, I guess, the theme of the conference was around ESG. And and it was fairly balanced between kind of ESG and general business performance and strategic things that we were talking about. But everything that you would, I guess, expect. So energy consumption, greenhouse gas emissions, water use, indigenous communities.
I guess those were the biggest topics. And then also kind of the phase 3 impact of our product because our products are there is a big positive phase 3 impact and there was some discussion around that because we've not reported on that yet.
And, do you guys have a, mission, do you disclose your emissions, or do you have a mechanism to, to do so, or or what are your thoughts around that? And then do you have a car, a carbon policy, Or do you think of that going forward?
So as I assume when you talk about emissions, you're probably talking about greenhouse gas emissions, which we do disclose in our latest sustainability report scope 1 and scope 2. And that's what Kent was saying. We're, scope 3 is still in progress. I mean, I think given the footprint that we have, our biggest low hanging fruit for improvement is going to be on scope 1 is 2. And scope 3 is actually going to be perhaps a positive to the business because the end use of our help reduce greenhouse gas emissions.
So we do give greenhouse gas emissions, then we can give other emissions as well not quite as meaningful for us between house gas.
And then how much from, and then we'll transition over to lithium, but how much of a pull factor from your customers off as, you know, creating a ESU plan and, and your customers are there. And specifically, I I actually across all three business units. What's, you know, is that something that they're asking from you, you know, to, to kind of provide that information, or, or is this more of corporate responsibility on why you're doing it?
Well, it's both. And our customers, our customers are probably more accurately, our customers, customers are starting to ask. So the OEMs around, particularly in the lithium business, are pretty focused on it, particularly the European OEMs. They're very focused and we started spending more time with them. Historically have not spent that much time with the OEMs, but they're really just getting into that business and getting focused on it, particularly from a European perspective, but there is We've spent time with all the major OEMs and some have even been in country to tour some of the sites and help them get a better understanding of exactly how the lithium space works.
I would say it applies across catalyst and bromine as well, but not to the same extent.
Got it. All right. So moving on to lithium, could maybe you talk to a little bit about, the supply demand environment? And then just weave in, you know, where, where you see channel inventories And if you could separate both, hydroxide and carbonate as you do that.
Right. Okay. So we, so we had said in the last quarter call that we, we and this is a pretty opaque supply chain. So we don't when you talk about lithium all the way from the lithium that we make and ship, whether it sits in an anode been made or sits in a battery that's already been made. There's not a lot of transparency among that, but our best guess was at the quarterly call, we said there were about 5 months excess inventory in that system.
And we don't really think that's changed. It feels like it's improving, but I don't think we don't have enough data to actually say it's changed. So we would still say it's 5 months. Given the way volume is starting or sales are starting to ramp up on EVs, incentives in Europe, and a lot of that is driven by European demand. We it feels like it's getting better, but it's not really worked its way through the supply chain to us yet.
So we're sticking with the 5 month excess inventory that sits there. Side for a couple of reasons. Demand Broadroxide is a little higher because of the more the higher performance batteries require hydroxide. And also because there's a limited shelf life on hydroxide. So I think people are more careful in managing that.
Great. And Ben, and then when investors when we talk to investors about lithium, I think there's still a struggle about, you know, whether it's a commodity or, you know, especially chemical Obviously, your margins, you know, point to, to the ladder. But, you know, could you talk to about, you know, may, you know, maybe help us with that distinction in how you view, you know, lithium being from a commodity to, to a specialty cap.
Yes. So, I mean, we view it more of a specialty chemical and we're a specialty chemical company, so we approach it that way. Some of our competitors don't treated more kind of like a resource play, maybe a commodity, if you will, but with a long term contract approach that we've had We innovate with our customers. We do a lot of work, technical work with our customers on existing chemistries, quality, crystal structures, but also future chemistry for the new batteries that are out there. So I mean, we spend a lot of effort and then we've built a diverse supply system with different resource spaces in different countries, different geography.
So we've got we've tried to balance our geopolitical risk. We've got different molecules. So we're We've got carbonate and we have hydroxides of the 2 primary products into the electric vehicle battery market today. And we're trying to create a balanced supply chain between a product standpoint from a geopolitical risk, geographically about how we supply that, which are all character I would say characteristics of a a specialty chemical market as opposed to just a commodity where you think it out of the ground and ship it.
And and, you know, let's get Tesla out of the way from the battery day. Can you talk about, because I'm sure you guys are tired of answering the questions, but Can you talk about, you know, your, your high level takeaways, from that? And then, you know, weaving in, you know, you know, your, your answer on the specialty side. You know, there's some offtake with some smaller partners. And, and, you know, one of the things that we've always thought, or I've always thought is that you're scale is, is the benefit to you.
But, you know, how, how is that, you know, is that, did that change with, you know, this announcement with the offtake with Piedmont And then, so high level, and then maybe answer that question about, you know, them working with smaller players.
Right. Okay. So I think there were 2 big takeaways for me from Tesla Battery Day were one that Tesla has aspirations that were greater than we had previously thought from a market perspective and that the intensity of lithium and the technologies that they're looking at continues to increase, and that the technologies they're looking There was not anything in there that was a big surprise to us. So those are the things that we look at with Tesla that we're doing kind of chemistry research to facilitate that those batteries in that technology. So there was no surprise there.
And the big takeaway to me was that that industry is becoming more lithium intense than rather than less. So those were all positives from our standpoint. And then the the cost reduction on the car, which in the penetration into the automotive market was a positive as well. The negative is that Tesla intimated that they would get into the lithium business and they have access to to clays in Nevada where they are looking at some technology to process that. So that was obviously not a big, that was a negative for us, but those were the 2 big takeaways.
And I think they're pretty early in looking at those clays in Nevada and that we have access to those clays and we've looked at them for a number of years and we've never developed plans because we our view is that they're on economic at least given pricing today or how we forecast pricing and the other and the access to the other resources that we have. And your question about smaller players, I mean, we're a biggest player in the market or one of the biggest players in the market. We have a big share of Tesla's business And we work pretty closely with them, we have for a number of years. And then, they're probably trying by doing agreements with smaller players, I think they're just trying to expand the pie a little bit. That was probably a little bit of an offset to us.
But, and some of the other players. But I don't, we didn't read anything into draconian into that.
This is a tough question trying to get inside Musk's had. But why, you know, with the market with this, you know, 5 months of inventory oversupply and then you, you know, you have resources. Why? Why start trying to go up the cost curve and, and do this, you know, unproven, or analysis unproven extraction technology. Why do you think is that, is that trying to expand the the supply chain or is it negotiations because you have contracts coming up or what do you think?
Yes, I mean, I don't know. I mean, I do, I mean, I know given the growth curve that we have for the industry, the demand is pretty strong and and the supply demand is, it's made a lot of investment in supply to keep up with that demand, going forward. And then you just and in his announcements or his targets on battery day, he kind of accelerated that curve. So there's I think they need additional investment in the lithium space and they're saying they're going to make some of it and they're encouraging others to do more because I think everything they said was about more lithium intensity, not less. And then they so that's lithium per car and then they've increased the number of vehicles and by reducing the cost of it.
So I think they're trying to encourage people to invest and that they're investing in their own right just to kind of fill what they see as a gap.
Got it. I have a question from the audience. If Tesla builds their own conversion capacity, what does that due for the cost curve, they could buy spodumene at $350,000,000 to $400,000, then why doesn't that compress the cost curve and apply $6000 to $7000 carbonate prices?
Yes, so we don't believe they'll be able to get the spodumene at those prices. We think that's difficult very difficult to do for in the U. S.
Great. You idled some capacity, could you talk about the plans there on the idled capacity and then, you know, how quickly you can bring that back on. Because, you know, some of it's in North America. So does that, you know, make a difference, you know, for what Tesla is trying to do And how are you looking at the best?
Yes. So the facilities we idled, 1 in North Carolina, 1 in Nevada, so both in the in the U. S. They were our higher cost facilities. And we were just taking some capacity out of market to kind of balance these inventory that's building.
It wasn't a dramatic amount. So it kind of relates to about 5000 tons on an annual basis. So for whatever period that's out there. It's not a big piece of the market, but it does allow us to kind of manage inventories a little bit. And we can bring that back pretty quickly.
Our kind of our estimate was we bring that back around the beginning of the year. And we're assessing that. And we may very well do it sooner, probably not later. But we're looking at that on a regular basis.
And then can you talk a little bit about just your overall visibility in the lithium market and, you know, how, how you guys are are approaching, you know, bringing on new supply you know, or where, where you're getting the information from, you know, what the trigger for that is. And, and, you know, You know, I, I think when you pull back on some of the projects, you know, that, like, when do you see this inflection point kind of occurring, we're, we're gonna clean up this the oversupply and the inventories here?
Yes, that's the magic question is when that happens. I mean, we're very confident our forecast longer term, exactly when, how it ramps up in the near term is hard to predict. So we did we have the 2 large projects at 1 at La Negra, 1 in Kemerton, the expansion projects, and we slowed those during the pandemic because to be, I mean, to be blunt, we were trying to just preserve cash because we didn't know what the pandemic was going to look like. We've now kind of brought those back a little bit. We pushed them out probably 6 months from the schedule, and we've probably tried to bring them back a month or 2 in doing that.
So our plans are La Negra would come on the middle of next year. From a commissioning perspective, probably by the time it's, commissioned and product is qualified with our customers, you'll be at the end of the year. Kimbertson would be 6 months delayed to that. And we, I mean, we're we look at the forecast for electric vehicles, We talk to our customers to try and triangulate to see if those are accurate, that information we get on the ground ties with the forecast that we see. And but it's not something that you can predict month to month, even a 6 month forecast is difficult.
5 year period, we feel very confident in it. It's just a matter of exactly when that inflection point kicks. It feels like that's going to happen sometime next year, and feels better, but we haven't seen the volume in the business yet. And I think that's because of the inventory that's in the supply chain, but Given the acceleration of electric vehicle sales in Europe, it feels like it has to come through sooner rather than later, but we just don't see it yet in our product sales.
And I think that you guys were different in the sense of establishing long term contracts you know, for, you know, a good portion of your, your, your, your, your EV grade supply, supply out. Out there. What's, what's the update there on just, you know, your approach to, to, to longer term contracts versus leaving some, you know, spot market? And how should we expect, you know, to be updated, you know, how are you gonna update the market as as you progress there?
Right. So, I mean, we're staying with the long term contract approach. I mean, and we and it's a portfolio of contracts. So I would say few years ago, when we first started doing that, it was a kind of a one size fits all approach with a contract. We had a long term contract and we kind of negotiated those with our customers.
And they've served us well. What we've learned over the years is not every customer wants to contract exactly the same way. Some are more concerned about long term supply quality, innovation, new battery chemistry. Others are really just molecules. And we're going to probably we're going to try and contract with them more the way that they want to buy.
And, but with a focus on the long term contracts, for those kind of what we would call value added buyers where they really want to make sure they've got security of supply that we innovate with them and bring new chemistries to them for the new technologies that they're looking at. And those will have more stable pricing, probably not fixed still moves with the market but dampened significantly from the market movements. On the other end of this of that spectrum is probably people that are just more interested in supply. In the short term, but at spec and at quality, and we'll contract with them on a shorter term basis, but make no long term promises for volume. And we'll create a portfolio of a mixture where we'll be skewed more toward the longer term contracts than short term, but we'll still have some of those short term contracts because those customers want to buy that way and that we'd like to participate in the upside in the market when it swings.
I guess with overall, you know, just, you know, overall distress in, in, in the industry, could you talk about, you know, how the other players are you know, you know, are people just, you know, you know, selling at, at costs to keep, you know, keep operations running? Or, or, or, you know, do you see pockets of people being more, I guess, more rational, outside of what you guys have done?
Yes, I think from the, I think the, kind of the major players in the industry, everyone's kind of reverting to type. Maybe they were always at type, but it really shows up in a crisis. So Some of the larger players with low cost position are kind of are just pushing their volume into the market and they've driven the spot price down, but they want they're gaining share and driving the higher cost players out. I would say, some of the Chinese players Tianqi as an example, I think they're just trying to survive. I think the low prices in the China market are really causing them cash flow issues and they're We know they have a large debt payment that's coming due and they're just trying to manage through that.
And I think most people are just reverting to type And we and we're doing the same thing. We're pushing on the long term contracts. We negotiate with our customers, and we're holding those contracts. So probably shouldn't be a surprise, but everyone's kind of doing what their personality says.
We have a good one from the audience. Here. Could you remind us the interest of the the Chilean and then, I guess, secondarily, the Argentinian government, or are they price or volume incented, and do they want to go production or limit to ensure higher prices? What are their environmental concerns and
Okay. So the first, so in Chile, so it's really, it's volume and price So they share in the as prices move up, there's more they share in more a piece of the revenue, right? So they're incented for a combination of price and volume, I would say, as opposed to one or the other. But price is definitely a part of as prices go higher, they get a little higher, they get more revenue as part of that. From an environmental standpoint in in Chile is mostly about water.
It's about the pumping rights that we have and making sure and we have very sophisticated monitoring system in the Salar. So both us and anyone who pumps out of the Salar, but we monitor the levels and the rates and any impact on the on the Salar itself from a water perspective and wildlife, we've got pretty sophisticated programs around all of that. But I would say the biggest concern in Chile's around water.
And then, is it similar in Argentina as how, how, their, your incentive?
Yes, we're not operating in Argentina. So we have rights, but we're not operating.
Yes, it's much more it's much more regionalized in Argentina. So they don't have yet. They're working on it, but they don't yet have a national policy like Chile has. So very, I think they're more volume oriented than they are price oriented right now.
And I remember there was, potential potentially more concessions in in Chile. Where do we stand on that, you know, for them expanding, you know, production to other other folks out there?
So I'm not sure. Yes, they haven't, they haven't really pulled the trigger on any of those yet. So they keep talking about it, and the reserves are there. But they really haven't pulled the trigger on them yet. So, it's kind of interesting.
So, I mean, I think the competition between Australia and Chile is an interesting one because Chile's got quite a better reserve. They haven't really fully utilized it yet.
There's a question, from the audience. Why do you say the auto industry is becoming more lithium and and intensive?
Well, I was referencing the comments from Battery Day with Tesla. So his comments that Elon Musk made around the new technology and the direction it was going is using more lithium and a battery for each car as opposed to less.
And just along those lines, it comes up quite a bit. The movement to state over whatever the next 10 years. Could you talk about the, you know, the, the lithium, you know, the back to lithium demand on, on that?
Yes. So that would be a positive for lithium. It would be in different forms. So that would be lithium metal. If we made it, I mean, ultimately, it would be a much bigger demand on lithium metal.
Which we manufacture today, but a much smaller volume. So we would have to ramp up manufacturing. But the same resources that we use today would would go to feed that, but it would be a different conversion, asset that would be required. And we would have to add capacity for that. In the industry, but have to add capacity for that.
And I think that's probably a journey. So some of the things that Tesla talked about kind of move a little bit toward a solid state, but that's still a number of years away before we end up with, there's still a lot of technical improvements that have to be made before we're at a solid state battery or lithium metal battery.
And another question from the audience, your hydroxide strategy, are you any thoughts to to rethink it versus Western Australia versus building in the US? Yes.
So, yeah, it would be yes, that's interesting. So we would have to the resources in Australia are higher quality than what's in the U. S. And we would and I know that there is pressure to develop U. S.
Sourcing and we have assets in King's Mountain that has It's a good resource. It's pretty expensive to mine and manufacture that in the U. S. So we would have to assess that. So right, at the moment, we're adding high side capacity in Australia.
The next tranche would probably be in China. And then we would then at the same time, we'll be looking at the U. S. To see if that makes sense for us.
Great. How will we get out of the lifting lower supply situation that Chile has a lot of reserves that have been tapped into,
Yes. So that would be, I mean, there are additional reserves there, but you need to be able to access those to process them and then have a conversion asset to do that. So to take advantage of that is a pretty long lead time. To get through that. If you're doing it through existing players, so SQM and Albemarle in Chile and in the same Salar, You could probably do that in 5 to 7 years.
If it was a new player, it'd probably be 10 to 15.
I would just add that those, those other reserves tend to be smaller and less from a quality perspective. So there is a cost implication to developing those reserves ultimately as well. And then whatever environmental challenges might they may have to run into as well.
Okay. I'm gonna just change switch gears here, and move on to, onto bromine and then we can circle back with, with any audience questions from, on lithium. But, could you just could you give us an update just on, you know, supply demand situation. I think that, you know, there's been some commentary out there that bromine is, is, has been better than originally thought. Can you talk about what's driving that?
Yes. So bromine, the market has bounced back better than we had anticipated from the pandemic. I mean, we still had, we have reissues, but it did bounce back kind of a V shaped recovery, if you will, and both volume and price have come back. So it's performed better than we had expected. And that's really if you look at the underlying market that drive, our products that's around construction and electronics, whether it's consumer or industrial those markets have been pretty strong and that's probably been the driver for that.
The one market that, where bromine plays that's big negative has been completion fluids for, oil wells. So, offshore deepwater oil wells, that is down, but that's a small of our portfolio, maybe 10% or a little bit less. So that part is down, but construction and and electronics have been strong. So that's been driving the growth for the recovery
And then, you know, is there a new capacity coming on, or has it already come on? I I thought that ICL was bringing on some, but where does that stand? And, and then just circling back to, to the completion fluid If I remember correctly, there's a lag period. So does that mostly hit into, 2021? Is that, Is that why we should start thinking about that hitting the bromine business?
Well, the lag is, I mean, by definition, completion fluids, they're using them and when they're completing a well at the end. So when the pandemic hits, if they were almost through with the project, they would go ahead and complete it. And so it probably didn't start hitting us until now or maybe part of the last quarter. That'll probably be a little drag for, until we annualize on that. But again, it's a small part of the business that's been offset by the strength in construction and electronics market.
And, from a capacity standpoint, there was some additional capacity brought in, but it's been kind of into the market now. It's there and it has enterprises haven't been impacted and volumes are pretty strong. So I think they're being brought on and kind of fit into the market and probably in segments where we don't participate as much.
Anything on the horizon that we should be aware of? I know it comes up now and then, about, you know, just the, you know, whether it's, environmental impact or, you know, impact on, on us as, as humans, bromine, you know, as an element. Anything new there that we should watch out for of changes?
No, I don't think so. I mean, there's it's always there's regulation around that, but mostly where the regulation is focused or in markets where we don't play. So fire retardants around furniture or clothing. We don't play in those markets and that's where most of the regulation has been. There is some attention around it in other markets and we continue to watch that, but we don't think it changes the profile of our business.
Moving on to Calas, can you just talk a little bit about that? I think there's been chicken, you know, obviously off the loads of, of miles driven, but what are you seeing from your customers, your refinery customers?
Yes. So the, the catalyst business was impacted the most through this pandemic. So, and our catalyst go into oil refining and and conversion to the products that they make, but we facilitate that. And so it was impacted dramatically by oil demand and probably half of our business, the FCC catalyst is kind of directly related to miles driven. And that was down dramatically and is coming back But refinery utilization is still low, globally, probably around 75% and they really kind of start making money or like to operate around 90%.
And then our products are used with where we're trying to optimize the mix of product slate for them so they can be the most profitable. And they're more concerned now with just about cutting costs. And not so much about optimizing their business. I think when that stabilizes and comes back to higher utilization rate, we'll go back to that normal operation. So that's, yes, I mean, our business is you see the numbers, how far that that's down.
It's coming back, but it's slow. We probably don't expect to get back to 2019 volumes until the end of next year.
Got it. And then just real quickly, it comes up quite a bit. Renewable diesel and RFS, renewable fuel standard markets. Is there anything that you're seeing now? I see some refiners, you know, converting or talking about converting over to renewable diesel.
Is that hitting your radar screen at all?
Not that I don't think so. I haven't seen anything that's driving that. It's, and especially in this environment, they're Like I said, they're very cost focused at the moment and, just looking to generate cash.
Got it. So just moving on to onto the balance sheet. There's, you know, you have some, I think, a loan, a term loan coming up in, 21 and and bonds coming in 2021. Maybe Scott, could you talk to the plans around that?
Sure. Yeah. We're actively looking at what our options are there. And, you know, frankly, we the markets are strong. The bank support is very strong.
So we've got a lot of different options that we could go there. So, we'd expect, would expect in the coming months here to be able to act on that. So, at this point, we're really trying to compare a the benefit of going out into the bond market, given how strong it is right now, to just using bank loans for flexibility purposes. And that's what the, that's where the analysis is focused right now. So, but like I said, we've got all options available to us In addition, we've got, as you probably know, we've been carrying around $700,000,000 of cash through the crisis think as we get more comfortable with the 2021 outlook, we could start to utilize that and bring that back down into the more normal range from an operating perspective that we would expect to be in the $250,000,000 to $300,000,000 range.
The question from the audience earlier is, that one of the tie in kind of a capital allocation is, you know, your partner at Greenbush for the audience, Tianqi, you know, there was reports, you know, be selling their stake or in financial, some financial trouble. Are you still in the running for that? I guess the first question. And then I have a follow-up.
Yeah. So, I mean, So it's a question whether they want to sell that asset or not and how so they we know that they are in financial straights. They have a large debt that is due in late November. And we don't see how they will pay that, but we kind of suspect that they will renegotiate that and probably extend some terms on that. If we would be in the running and we have certain contractual rights to it, if they were looking to sell that asset we would definitely be in the mix.
And I guess as you look at the overall market, and the 3 business units, you know, as M and A, you know, or, from a, or, it's acquisition are acquisitions still on the table? And, and, you know, where would we, you know, are you looking mostly, you know, in that, in which segment?
Yes. So I would say, I mean, so we would be balancing an acquisition opportunity versus the growth opportunity we have in lithium to invest and capture growth there. And so we'd be pretty focused on that because we think that's a good opportunity and there's no integration associated with it, where we'd be looking to do acquisitions would not be on an enterprise basis, but on doing conversion assets lithium conversion assets in China. If we felt like that was attractive to us on a make versus buy analysis versus actually building new capacity in anywhere anywhere in the world, but particularly China.
And, I think about the Analyst Day, talked about free cash flow generation in 2021. I know that there's been a whole world's changed since then. But can you talk to us about kind of the puts and takes and how we should think about, you know, back going forward?
Yes, so you're right, Ben. We did put the stake in the ground in December around going free cash flow positive in 2021. Of course, with the COVID crisis, we did decide to slow down the La Negra project and the Kemerton project to reduce our capital spend in 2020. So this year, by about $150,000,000. And effectively that's being pushed into next year.
And I would say the combination of the EBITDA as well as that CapEx push likely means that that free cash flow positive stake gets pushed out a year. We're still going through that analysis with our operating plan right now to make the decisions. But I think it's hard to overcome that extra spend as of this point. So.
Got it. And maybe along those lines, Kent, or Scott, would you, would you talk about, you know, the, you know, operational efficiency programs and, and remind us, you know, kind of the numbers that you put out there? And where you stand on that and if there's more to do?
Yes. So I would, So, we have a program we're calling Pivot 2020 where we put $100,000,000 cost, long, sustainable cost saving target out there by the end of next year. And we think we're on track for that. And then once we complete that and make sure that's secure. We're working on a new program that's kind of focused around operational discipline that is the next level of cost savings.
So, and I would say that program around pivot 2020 was kind of the low hanging fruit. The next round will be a little more difficult to get, but be more, focused on traditional manufacturing excellence, being leaner, getting additional capacity out of our facilities, driving cost out of the business on a productivity basis, a leaner back office, all of those things that are probably a little harder to get at, but kind of cornerstones of a efficient business.
Great. And the last one, just from a portfolio perspective, in the past, I think maybe the thought was eventually, you know, the, the, the cash flow from bromine and, and Calas wouldn't be needed to support lithium as much and the growth that could stand alone. Is that still something that, you know, you think about, you know, down the road of, you know, having the bet best, you know, lithium business out there as kind of a standalone and having optionality with those 2 businesses. And, and if if not, and, you know, kind of what are the kind of, impediments that, that keep that from, you know, from the sale of bromine or or catalysts?
Yes. So I think on our, the near term strategy is that we're funding the lithium growth of cash flows from the entire business. So all three businesses Once we get to where we're generating more cash than we know what to do with from lithium, we'll have other options and we'll look at that at that time. I'm looking forward to that day. But we'll wait and see where we are once we get there.
All right. Well, thank you all for joining us, and thanks for your time today. Thanks, everyone. If you need anything, just follow-up with me and, happy to send over a model or any answer any questions you have. Thanks, Kent.
Thanks, Scott.
Thanks, Meredith.
Bye bye.