Brisbane-based lithium producer Orocobre expects lithium carbonate prices to rise by 25pc in the first half of calendar 2018 compared to the second half of 2017.
Lithium carbonate sales were 5,532t in the first half of its 2018 fiscal year from its Olaroz project in Argentina and expects production to reach 14,000t by its 30 June financial year end.
The company reported a record average sales price of $11,415/t of lithium carbonate in the first half, 24pc higher than a year earlier. It reported cost of sales of $4,336/t and a gross margin of $7,079/t.
Construction on phase two of Olaroz is expected to begin in mid-2018 with first output targeted for the second half of 2019. Phase two will raise the project's capacity to 42,500 t/yr of lithium carbonate, the company said.
Once phase two is operational, the project will produce 17,500 t/yr of purified lithium carbonate and 25,000 t/yr of primary lithium carbonate of which 9,500t will be converted to 10,000t of lithium hydroxide.
Orocobre's strategic partner Japan's Toyota Tsusho is to source project financing for phase two expansion, which is estimated to cost $271mn.
Orocobre and Toyota Tsusho are to select contractors to build a lithium hydroxide plant in Japan which will receive a subsidy from the Japanese government. This plant is expected to produce 10,000 t/yr of lithium hydroxide. Capital expenditure is estimated at $60-70mn and production cost is estimated at $1,500/t, down from an earlier estimate of $2,500/t.
Strong demand and persistent undersupply remains a major factor in the global lithium market, Orocobre said.
The company reported record revenue of $63.1mn for the 2018 fiscal first half and a profit of $8.2mn.
