Orocobre, Toyota approve $400m Olaroz lithium expansion

Salar de Olaroz. (Image: Orocobre)

Brisbane-based Orocobre and joint venture partner Toyota Tsusho have agreed to a $US295 million ($404 million) stage two expansion of the Salar de Olaroz lithium brine project in Argentina.

Already one of the largest lithium mines in Argentina with measured and indicated JORC resources of 6.4 million tonnes of lithium carbonate equivalent (LCE), the stage two expansion is intended to boost the mine’s annual capacity from 17,500 tonnes to 42,500 tonnes.

This includes 17,500 tonnes of battery-grade lithium carbonate; 15,500 tonnes of technical-grade lithium carbonate; and 9500 tonnes of feedstock lithium carbonate for shipping to the developing Naraha lithium hydroxide plant in Fukushima, Japan.

Naraha operator Toyota and contract company Veolia are currently undergoing engineering, procurement and construction (EPC) contract negotiations over the 10,000 tonnes a year Naraha plant, which are expected to be finalised this quarter.

Dual-listed Orocobre will fund the stage two expansion with a combination of debt, cashflow and shareholder loans.

A debt facility of $US180 million is expected to be provided by “a Japanese bank” which Orocobre did not name in its release — Japanese banking major Mizuho provided a $US192 million debt facility for stage one of Olaroz at the end of 2012.

Japan Oil, Gas and Metals National Corporation (JOGMEC) will act as guarantors for stage two as they did for stage one.

“This commitment to stage two at Olaroz will cement Orocobre’s position as a global lithium producer operating at the bottom quartile of the lithium cost curve,” said Orocobre managing director Richard Seville.

Stage two commissioning is expected to take place in the second half of 2019.