Orocobre raises Olaroz lithium output

Sydney and Toronto listed lithium producer Orocobre increased lithium carbonate output and sales from its Olaroz project in Argentina in the June quarter and in its 2018 fiscal year.

June fourth quarter output rose by 28pc from the March quarter to 3,596t while output for the fiscal year rose by 5pc to 12,470t. Production was boosted by efficiency improvements at the lithium carbonate plant and the brine pond system.

Sales in the June quarter achieved a record realised average price of $13,611t, boosting quarterly revenue to a record $47.6mn. Sales for the fiscal year totalled 12,080t with an average price of $12,586/t, up by 29pc on the previous year. Revenue rose by 27pc rise to $152mn/yr.

Lithium chemical prices are expected to stay strong "at least in the medium term," Orocobre said, stressing that under-delivery is a key risk across the lithium supply industry.

An investment decision is expected soon on increasing Olaroz's lithium carbonate capacity to 42,500 t/yr. The company said the expansion, which is funded and approved, could be complete in the second half of 2019.

Plans are well advanced with major shareholder Toyota Tsusho for the development of a 10,000 t/yr lithium hydroxide plant in Naraha, Japan. An investment decision is imminent with a possible project completion date in late 2019.

The conversion industry — from raw materials to chemicals for batteries — is not well understood with China subjected to the same slow ramp-up as occurs in the South American lithium brine sector, the company said.

"Analysis demonstrates that potential new capacity is significantly overstated. Orocobre expects about one-third of planned capacity to be available by 2020.