Orocobre's lithium plant is up and running
Now that the last circuits have been commissioned, Orocobre's Olaroz lithium plant is ramping up for an expected monthly production of 1,450 tonnes per month (17,500 tpa) by the fourth quarter of 2015.
The Argentinian-based Olaroz Lithium Project consists of 63,000 hectares of tenements over a salar (salt lake) known to contain high values of Lithium and Potash in brine. Construction on the US$229 million project began in late November 2012 after the company signed a joint venture with Toyota Tsusho to develop the project.
The company expects to supply over 30 customers in Asia, Europe and the United States. Orocobre (ORE:ASX) says the current market conditions for lithium carbonate are favourable:
The supply side of the market is tightening due to a combination of existing suppliers effectively being at capacity and strong market demand. As a consequence, existing suppliers have recently announced market price increases of ~10%. Apart from Orocobre there are no new entrants on the supply side and no capacity expansions outside China due to come on-line until at least 2016. The market growth rate projected by independent consultants is ~10% year on year for at least the next few years. These factors have combined to create a market environment where customers value security of supply and have a focus on diversifying their supply chain to manage supply risk. These are very favourable conditions for a new supplier to be starting production, negotiating supply contracts and initiating supply to customers.
Orocobre Ltd is a public company based in Milton, Australia. It is listed at the TSX and has a market capitalization of 297.12 Mln USD. Orocobre has 3 active mines, 1 processing facility and 3 exploration projects in 1 country. Of those it controls 3 mines, 1 processing facility and 3 exploration projects in 1 country. Its asset is located in Argentina.