MOBILE PHONES DRIVING GROWTH FOR OROCOBRE

Written on the 19 June 2015

MOBILE PHONES DRIVING GROWTH FOR OROCOBRE

OROCOBRE Limited (ASX:ORE) is poised to capitalise on growing demand in the lithium market, after ramping up production at its Argentinean facility.

The mineral resources producer streamlined operations at Salar de Olaroz ahead of market reports that lithium demand will double by 2020.

Orocobre says the demand is being driven by the proliferation of mobile devices and emerging markets including electric cars and solar-lithium battery home energy solutions.

The production rate at the large-scale brine lithium plant is expected to pick up by October, with Orocobre confirming its guidance to deliver 1450 tonnes each month during the fourth quarter.

Managing director Richard Seville says the team has been successful at fulfilling customer orders, despite the production boost being slower than anticipated.

"The systematic identifying of bottlenecks to be rectified will still enable us to achieve the nameplate monthly production rate of 1450 tonnes within Q4 2015," Seville says.

"We have had to invest some capital in both plant rectification and additional boiler capacity, which was critical to allow the plant to reach its potential.

"As the ramp up program continues, we will undoubtedly learn more about the intricacies of the process as we develop our operating practices and drive toward maximising plant efficiency."

Seville says the supply side of the lithium market continues to tighten as existing suppliers reach capacity while demand increases.

Suppliers have announced a 10 per cent lift in lithium carbonate prices in 2015, with Orocobre reporting the range to be US$6000 per tonne compared to US$5000 per tonne last year.

Independent consultants have forecast 10 per cent year-on-year growth in lithium for the next few years.

Seville says the lithium market continues to demonstrate very strong growth in demand.

"The market is forecast to grow at 10 per cent prior to including the potentially huge impact of the proposed new battery factories or battery plant expansions proposed by Samsung, LG, BYD, Foxconn and Tesla," he says.

"Although we are disappointed with the delays, we are heartened by the recent progress and the strengthening market dynamics.

"The lithium market is certainly in an exciting phase and we look forward to growing our business in line with this market growth."

The company says besides in China, there are no new suppliers or capacity expansions planned in the market until at least 2016.


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