by Martim Facada, IndMin. First published: Thursday, 05 April 2018
Link here to read the original article on the IndMin.com website
Adverse weather and lower evaporation rates reduced Orocobre’s lithium compounds output in the first quarter, but it still achieved higher sales prices.
Argentina-based lithium producer Orocobre has announced a 29% fall in its production of lithium carbonate in January-March 2018, with output down to 2,802 tonnes against the 3,937 tonnes produced in the last quarter of 2017.
A 24% decline in brine evaporation rates year-on-year hampered the brine concentration process. This was a result of reduced hours of sunshine, cloudy conditions and rain, which were said to be the main factors behind the lower production.
But although production was reduced, Orocobre achieved higher prices. It sold 3,052 tonnes of lithium carbonate in the first quarter at an average price of $13,533 per tonne fob, up by 17% compared with the preceding quarter.
Total sales revenue achieved in January-March was $41.3 million.
The contract price of lithium carbonate, min 99% (Li2CO3), technical and industrial grades, was last assessed* by Industrial Minerals on March 28 at $16.00-18.50 per kg on a ddp Europe and US basis.
On the same day, the contract price for lithium carbonate, min 99% (Li2CO3), technical and industrial grades, cif China, Japan and South Korea, was assessed at $16-19 per kg on a ddp Europe and US basis.
Because of the first-quarter fall in production, Orocobre expects to produce 10% less lithium carbonate for the full 2018 financial year than was indicated by the previous guidance of 14,000 tonnes. Further details will be provided in the company’s March quarterly report.
Orocobre produced 11,392 tonnes of lithium carbonate from Olaroz throughout the 2017 calendar year, and 11,892 tonnes in the 2017 financial year from June 2016 to June 2017.
“While I recognize that this change in production guidance is very disappointing, the adverse weather conditions were outside our control,” chief executive officer and managing director Richard Seville said.
“However, recent weather events have confirmed the previously identified need to further improve the robustness of operations and reduce production variability from [the effects of] weather,” he added. “Plans for the Phase 2 expansion already include enhancements to the lithium carbonate processing plant and the potential use of evaporator/crystallizers during adverse weather events, to maintain consistent brine concentration prior to processing in both Phase 1 and Phase 2.”