[SMM Lithium Mine] ORE: estimates that the lithium hydroxide gap will reach 80, 000 tons by 2025

SMM11, 14 Nov: on November 13, lithium product manufacturer Orocobre (ORE) released its November investor introduction, the company said that due to the key advantage of low cost, the company's net profit after tax reached US $25.7 million in 2018. The company's profits rose sharply from $13.8 million in fiscal 2017.

It is predicted that the lithium hydroxide gap will reach 80,000 tons / year in 2025.

Orocobre believes that in the long run (2017-2030), the price difference between battery-grade lithium hydroxide and battery-grade lithium carbonate will remain at about $2500 per tonne, and the hydroxide gap is currently forecast to reach 80, 000 tons per year by 2025 (equivalent to lithium carbonate equivalent).

The company expects the share of high nickel ternary cathode materials (NCM 811 and NCA models) to grow from 33 per cent in 2017 to about 80 per cent, and its market size will grow from about 80Gwh in 2017 to 816Gwh in 2025.

(Orocobre reality)

Planned Naraha plant

The company's plant in (Naraha), Japan, will gain a first-mover advantage in Japan, and its hydroxide capacity has not yet been announced. The lithium hydroxide plant will process lithium carbonate from Olaroz and reach an agreement with Orocobre and Toyota Trading Co., Ltd. (Toyota Tsusho) to provide lithium hydroxide.

(factory in (Naraha), Japan)

According to Orocobre estimates, operating costs are estimated at about $1500 / tonne, down from the initial estimate of $2500 / tonne, and factories have received about $27 million in subsidies from the Japanese government.

The scale of lithium salt production will continue to be expanded in the future.

As a low-cost and high-margin manufacturer, Orocobre expects production in fiscal 2019 to be higher than in fiscal 2018, and the ongoing Olaroz will expand to 42500tpa due to sufficient funding for the project. At the same time, the company will build a 10000 ton / year lithium hydroxide plant in Japan, and the final investment decision is that the general contract for the lithium hydroxide plant in (Naraha), Japan will be completed this quarter. Both projects are expected to be debugged in the second half of 2020. Orocobre believes that in the long run, the fundamentals of the lithium market is still strong, the company will further expand Olaroz production in phases.

Drawings

Orocobre Forecast of supply and demand in Lithium Market (LCE t):

Carbonate pre-tax cost curve and owner mine royalties:

Lithium hydroxide pre-tax cost curve and owner mining area usage fee:

Lithium hydroxide after tax cost curve and owner mining area usage fee: