AUS
NZ
UK
CA
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FRA
GER
ESP
ITA
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BRA
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UAE
Summary
- Australia produced 231,000 tonnes of lithium in 2019-20, 55% of the entire world’s production making it the world’s top exporter of the metal.
- Lithium is primarily used in the manufacturing of rechargeable battery. With the growing popularity of electric vehicles, nearly 46% of the total lithium is consumed by the battery industry.
- Orocobre raised A$169 million through Placements to complete the stage 2 construction of the Olaroz facility. Once fully functional, the Olaroz facility will produce 40,000-42,500 tonnes of lithium per year.
- The Company informed the retirement of Federico (Freddy) Nicholson from the Board after 10 years of service as a Board Member.
The Australian miner and exporter of lithium Orocobre Limited (ASX: ORE) has advised that due to delays in expansion projects and with current production capacity, lithium industry could undergo critical supply shortage.
Industry Outlook
The demand for lithium is expected to outrun the supply by the year 2023-24. As per the September edition of Resources and Energy Quarterly report, the world demand will increase from 305,000 tonnes in 2020 to the level of 392,000 tonnes in the year 2021. China is the world’s largest importer of lithium carbonate, and its imports grew by 87% in the first seven months of 2020.
The demand of lithium is not limited to the growth of EVs only, power storage units for residential and commercial purposes and commercial marine transport will also boost the demand of rechargeable battery which in current technological scenario depends on lithium.
Corporate Outlook
Orocobre has reported JORC measured and indicated resource of 11.2 million tonnes of lithium carbonate equivalent. The Company is planning to start its production in FY22 for the battery market. Orcobore reported total cash reserve of ~US$255 million to support its operational needs fully.
Orocobre Operational Update
Olaroz Project
Orocobre has finished~44% of work on Olaroz stage 2 capacity expansion of the facility. Stage 1 is expected to recommence in FY21 and will boost the production in a range between 15,000 -17,500 tonnes per year. Stage 2 will be operational from FY23 and augment the production by 25,000 tonnes per annum. The combined capacity from stage 1 and stage 2 will be in the range of 40,000-42,500 tonnes per year.
Orocobre raised A$169 million through Placements to ensure the availability of funds for the construction of stage 2 at the Olaroz facility and recommence stage 1.
The Company has signed a non-binding MOU with Prime Planet Energy Solutions (PPES) for supplying a sizeable volume of lithium carbonate in the long term to minimize the price risks of the spot market.
Naraha Lithium Hydroxide Plant
Naraha Lithium Hydroxide Plant in Japan is nearly 80% complete. The project has been delayed by two months due to the delay in equipment deliveries due to COVID-19 related restrictions. Orocobre has planned that the Naraha plant will use the lithium carbonate from the Olaroz facility as a feedstock to produce battery-grade lithium hydroxide.
Share Price Movement
The stocks of the Company was trading at A$2.960 at 12:23 AEST with a market cap of A$1.03 billion as on 13 November 2020.
