Project partners Orocobre and Toyota Tsusho Corp have approved the stage-two expansion of the Olaroz lithium facility in Argentina.

The expansion, set to cost $295 million including $25 million contingency, will increase the facility’s capacity by 25,000 t/y of lithium carbonate, bringing total capacity to 42,500 t/y.

It will also see Olaroz produce technical grade (>99% Li2CO3) lithium carbonate, part of which will be used as feedstock for the proposed Naraha lithium hydroxide plant to be built in Japan.

The stage-two expansion involves construction of evaporation ponds, roads and camp upgrades, all of which have already commenced. Commissioning of both the stage-two expansion and the Naraha plant are expected in the second half of 2020.

During the development of stage two, the stage one plant will progressively migrate to 100% battery-grade lithium carbonate production, Orocobre said. Upon achievement of full production rates, the product distribution, post stage two, is expected to be:

• 17,500 t/y of battery-grade lithium carbonate;
• 9,500 t/y of technical-grade carbonate as feedstock for 10,000 t/y battery-grade lithium hydroxide production at the Naraha plant
• 15,500 t/y of technical-grade lithium carbonate.

The expansion will be funded by a combination of project debt, operation cashflows and shareholder loans, Orocobre said.

Negotiations on the engineering, procurement and construction (EPC) contract for the proposed Naraha hydroxide plant were advancing rapidly between Toyota Tsusho as operator and Veolia the preferred EPC contractor, Orocobre said.

“As previously advised, the EPC contract is expected to be finalised during this quarter,” the company said.

The Olaroz lithium facility is in Jujuy Province, northern Argentina. After seven years of planning, developing, construction and commissioning, the first sale of lithium carbonate from the facility occurred in late April 2015 and volumes have been increasing since that time.

Olaroz hosts a JORC/NI 43-101 compliant measured and indicated resource of 6.4 Mt of lithium carbonate equivalent and is capable of sustaining current continuous production for 40-plus years with only circa-15% of the defined resource extracted, the company says.