Lithium producer Orocobre to restart operations in Argentina
Australian lithium miner Orocobre will resume production at its Olaroz and Borax plants in Argentina after the South American country’s ministry of production deemed the activities “essential,” it said on Thursday April 9.
On March 20, the Argentinian government imposed strict lockdown measures in the country in its attempt to slow the spread of the Covid-19 pandemic. The measures were scheduled to last until April 12 but they could be extended.
Orocobre temporarily halted production at its Argentina sites on March 20 to abide by the government’s measures.
But the company has said that it is now restarting operations at both the Olaroz and Borax sites.
Production and shipping of lithium carbonate has now restarted at Olaroz, albeit with fewer staff, to comply with the strict health and safety standards.
Onsite works at the Olaroz facility for stage 2 of its expansion project were still suspended, the company said, although offsite work on planning and procurement was continuing.
And production and shipping of essential lithium compounds from the Borax site has restarted, Orocobre said, including shipments to customers in Brazil.
The news came as North American lithium producer Livent announced that it has also resumed operations at its Argentinian production facility, after the government gave the company permission to restart its activities.
Orocobre warned that any disruptions to trading activities that resulted from the measures taken to combat the pandemic could affect operations at both Olaroz and Borax, and that this could include potential reduced demand for lithium compounds because of action being taken elsewhere.
“The duration and severity of these disruptions is currently unknown, and so is the ultimate effect on Orocobre’s financial performance and operating results,” it said.
Bearish lithium market
A raft of lithium miners have recently announced a slowdown in capacity expansions due to low lithium prices and further headwinds caused by the global spread of the coronavirus infection.
For instance, in February, Livent announced a six-months delay to its planned capacity expansion project in Argentina, due to low lithium prices and to align additional supply with expected future demand growth.
Lithium carbonate is a critical component in batteries for electric vehicle (EVs).
Although long-term sentiment for lithium compounds was bullish due to government and social pressure around the world for a switch to cleaner energy vehicles, such as EVs, an oversupply of lithium in recent years has weighed on prices.
Fastmarkets assessed the lithium carbonate, 99.5% Li2CO3 min, battery grade, spot prices, cif China, Japan & Korea, at $8.00-9.50 per kg on April 2. These were unchanged since December 19 last year, but down by around 28.6% from $11.50-13.50 per kg on April 8, 2019.