The Naraha lithium hydroxide plant will be built with a production capacity of 10,000 tonnes per year of lithium hydroxide and is the first of its kind in Japan, using lithium carbonate as feedstock.

The companies plan to use lithium carbonate produced following stage 2 expansion at Orocobre's Olaroz lithium facility in Northern Argentina to produce battery grade lithium hydroxide for the battery industry in Japan.

The Naraha plant expects to use about 9,500-9,700 tonnes of lithium carbonate to produce the 10,000 tpy of lithium hydroxide, but these numbers are unconfirmed until the plant ramps up, Orocobre said.

Commissioning at the Naraha plant is expected during the first half of Orocobre’s 2021 financial year starting July 2020.

In the 2019 financial year that ended in June, Orocobre produced 12,605 tonnes of lithium carbonate, an increase of 1.08% from 12,470 tonnes produced in the previous 12 months.

Commissioning of Orocobre’s stage 2 production expansion at Olaroz will start at the beginning of 2020 with the aim of reaching production of 17,000 tpy of battery grade lithium carbonate and 15,500 tpy of technical and industrial grade lithium carbonate.

"This is an exciting time for Orocobre and our joint venture partners as we see construction commencing at the Naraha site. This couldn’t have come at a more opportune time, as we work towards producing low-cost battery grade lithium hydroxide at a time when demand is expected to grow significantly," Orocobre’s managing director and chief executive officer Martín Pérez de Solay said.

Under the joint venture agreement, Toyota will manage the sale of the lithium hydroxide produced at Naraha, which will be situated close to Sumitomo's operating cathode manufacturing plant and a future battery manufacturing facility built in a joint venture between Toyota and Panasonic.

Lithium hydroxide production expansion has been a trend in the lithium industry, with lithium producers seeking toincrease their production of lithium hydroxide ahead of the expected growth of next generation nickel-rich lithium ion batteries which typically use lithium hydroxide.