Orocobre Limited (ASX: ORE, TSX: ORL), a leading lithium chemicals producer, today released its strong December quarter 2017 results, with record quarterly production of 3,937 tonnes of lithium carbonate at a FOB cash cost of US$3,946/tonne. The Company also announced a significant strategic funding initiative of A$361 million (US$287 million) to accelerate an increased Phase 2 expansion at the Olaroz lithium facility in Argentina of 25,000 tonnes per annum.
The Phase 2 Olaroz expansion will add 25,000 tpa of lithium carbonate production capacity (up from the originally planned 17,500 tpa), taking Olaroz’s total production capacity to 42,500tpa at full production capacity and positioning Orocobre as one of the world’s largest and lowest cost lithium chemicals producers. Commissioning of the expansion is expected in the December half of calendar year 2019 and operating costs for Phase 2 are expected to be lower than Phase 1, further enhancing Orocobre’s low cost base. The total capital cost of Olaroz Phase 2 is expected to be approximately A$340 million (US$271 million, on a 100% basis) and final Orocobre and Olaroz JV Board approvals are expected by mid-2018. Long lead time activities including drilling of new bores have already commenced.
Orocobre and Toyota Tsusho Corporation (“Toyota Tsusho”) are finalising plans to jointly develop a 10,000 tpa lithium hydroxide plant in Fukushima, Japan with expected operating costs of US$1,500/tonne (down from US$2,500/tonne). Development subsidies of approximately US$27 million have been indicatively approved (but not yet finalised) by the Japanese Government. After subsidies and proposed Japanese bank debt financing (which is proposed to be at subsidised interest rates), Orocobre’s equity contribution will be approximately US$6 million towards the estimated total capital cost of US$60-70 milllion. A final investment decision is expected in mid calendar year 2018.
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.