Long-term fundamentals for lithium remain intact thanks to increasing support from governments, regulators and consumers for the move to electric vehicles and the installation of electrical storage systems, producer Orocobre said.
"Global market fundamentals for lithium have recently been questioned with decreases in the Chinese spot market prices. While short-term volatility is to be expected, the Chinese market is only a small part of the overall global market," Orocobre's chief executive Richard Seville said as the company released its production and financial results for the 2018 fiscal year that ended 30 June.
Queensland-based Orocobre increased lithium carbonate production at its Olaroz lithium brine project in Argentina by 5pc to 12,470t in latest 12-month period, with sales of 11,837t at an average price of $12,578/t. Sales revenue rose by 24pc from a year earlier to $148.9mn.
Lithium carbonate output at Olaroz is expected to be higher in fiscal 2019 compared to a year earlier, with prices received in the first two months of the fiscal year reaching about $14,000/t, the company said.
Production costs averaged $4,194/t in fiscal 2018, providing an operating margin of 67pc that put Orocobre and Olaroz in the lowest cost quartile of the world's lithium producers.
The proposed second stage of the Olaroz project to increase output capacity to 42,500 t/yr of lithium carbonate is fully funded with an investment decision due shortly. The establishment of the 10,000 t/yr Naraha lithium hydroxide plant in Japan is also fully funded, with an investment decision also expected soon. Japan's Toyota Tsusho is Orocobre's partner in the development of this plant.
Orocobre reported a statutory profit of $1.9mn in the latest fiscal year. Its underlying profit from continuing operations rose to $25.7mn from $13.8mn a year earlier.
