Lithium producer, Orocobre Limited (ASX: ORE) has released its second Sustainability Report, covering the second full year of commercial lithium production at the Salar de Olaroz Lithium Facility (Olaroz Lithium Facility). The Olaroz Lithium Facility, located in Jujuy Province in northern Argentina, is unique as it incorporates a large-scale purification circuit with the ability to produce 100% battery grade lithium carbonate on site. The Olaroz Lithium Facility produces a range of highly sought-after lithium carbonate products that are sold into global markets.
The Sustainability Report is structured to present the company’s progress with regards to the 10 principles of the UN Global Compact in Environment, Labour, Human Rights and Anti-Corruption, and its contribution to the UN Sustainable Development Goals (SDGs) as an integrated component of its core business activities
In its report, the company has confirmed that it is operating in accordance with industry standards, and it maintains certified management systems for Environment, Quality and Health & Safety. When it comes to the safety of its employees and project contractors Orocobre fosters a ‘zero harm’ approach. The company is committed to reducing workplace risks and incidents, and consistently review its management and reporting systems to enhance the safety of its operations
The year 2018 was the company’s second year of full commercial production and its second year of reporting its sustainability performance. Further, 2018 was a hallmark year for the JV Partnership between Orocobre and TTC. In February 2018, the company announced the finalization of a 15% strategic placement to TTC, granting the JV Partner 37,544,920 shares at an issue price of $7.50 Australian Dollars (A$) per share.
This strategic placement (valued at A$281.6 million) coupled with a pro rata entitlement offer, which allowed existing shareholders to participate at A$6.55 per share, generated the funds required to progress with Stage 2 Expansion at Olaroz and the construction of the Naraha Lithium Hydroxide Plant. Based on strong demand observed by both Orocobre and TTC, the Olaroz JV is going to undertake an extension to the Olaroz Stage 2 Expansion.
The Olaroz Stage 2 Expansion will add 25k tpa of lithium carbonate production capacity to the Olaroz Lithium Facility, taking total nameplate capacity to 42,500 tpa. This will position Orocobre as one of the world’s largest and lowest cost lithium chemical producers, with lower Stage 2 operating costs further enhancing Orocobre’s low-cost base.
Due to the increasing demand for lithium in the global market, many investors are keeping a close eye on lithium stocks like ORE. Demand for lithium chemicals continues to increase as the world’s consumers require high-quality lithium batteries in applications that are increasingly dominated by state of the art, high-performance electric vehicles (EV) and grid power storage applications at residential and commercial scale. Consumer electronics continue to provide significant underlying demand, but it is the wholesale adoption of EV technology by global auto manufacturers that will drive unprecedented growth in lithium demand over the next decade.
ORE is trading at $3.445 (-1.289% intraday) with a market capitalization of circa $912.75 million as on 22 March 2019 (AEST 1:50 PM).
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