Orocobre Expects to Complete De-Bottlenecking at Olaroz in January 2016

Orocobre (TSX:ORL,ASX:ORE) reported on the progress of production ramp-up at its Olaroz lithium facility in Argentina. The company expects to reach a breakeven point in terms of operating costs in December 2015 (originally October 2015), and expects all de-bottlenecking projects to be completed by early January 2016, paving the way for the plant to reach nameplate production.
As quoted in the press release, highlights included:

• Production ramp up continues with production of approximately 256 tonnes of lithium carbonate in September, in line with forecast. Of this total there was approximately 50 tonnes of saleable lithium carbonate produced in the month that was recovered within the purification circuit.
• Modifications made to the purification circuit to attain the required temperature reduction to achieve efficient dissolution of the primary lithium carbonate in the absorption circuit have been successful. Further simple enhancements are required to gain the full benefit of these changes.

The company also commented on its production guidance:

The Olaroz Lithium Facility will reach breakeven point on an operating cost basis (net of taxes paid or reimbursed), when production reaches approximately 650 tonnes per month, subject to variability in final average sales price. The Company has previously advised that this would occur in October 2015 however, due to the engineering matters discussed above, this is now expected in December 2015.
All de-bottlenecking projects impacting production are now expected to be completed by early January 2016 permitting the plant to enter the final stage of ramp up and achievement of the nameplate production run rate. The timing of achievement of the nameplate production run rate is dependent upon the successful optimisation of operating practice once the debottlenecking rectifications are complete. Current brine inventory is up to approximately 40,000 tonnes of lithium carbonate equivalent (LCE) up from approximately 32,000 tonnes of LCE in June. There are no material changes to the capital cost estimates previously announced.

Orocobre managing director, Richard Seville, said:

We remain positive about our progress at the Olaroz Lithium Facility. The more we progress, the better we understand what remains to be done and the level of uncertainty reduces. We have continued to make rapid advances in removing bottlenecks, we improve our “know how” and operating practices on a daily basis and our revenues are rapidly increasing in line with increasing production and rising market prices.

Click here for the full press release.