Issue link: http://resourceworld.uberflip.com/i/119004
AUST R ALIAN UP DAT E Orocobre advances Argentine lithium and potash projects by Greg Barns Airline and car manufacturers think about lithium a good deal these days. That's because they need to find environmentally friendly, super efficient and cheap substitutes for oil and conventional battery technologies. This may be the reason Orocobre Ltd. [ORL-TSX; ORE-ASX], a company developing a lithium project in Argentina, has been able to attract the interest of Japanese auto giant Toyota. Orocobre's Olaroz Lithium Project is located in the northwest Argentinean province of Jujuy. The company has 63,000 hectares of tenements over a salt lake, which contains both lithium and potash in brine. Currently, the JORC/ NI 43-101 resource for the project sits at 6.4mt LCE and 19.3 mt KCL. Last October, the company announced the Toyota joint venture to develop the project. Orocobre has 66.5% of the project, Toyota 25% and the Jujuy provincial mining company 8.5%. Project financing is being provided by Mizuho Corporate Bank for a maximum facility amount of US $192M. Around US $65M of the total project capital budget of US $229M has already been committed to construction, which began late 2012. APRIL 2013 Orocobre Managing Director, Richard Seville, highlighted the major strengths of the Olaroz Project in a February 19 presentation to Australian shareholders. Excellent infrastructure road, gas pipeline, water, people, a large resource, and a depth potential of 600 metres are attractive features of the project, said Seville, also pointing to strong EBITDA margins. Construction and commissioning will be approximately 18 months with initial battery grade lithium carbonate production scheduled for April 2014. About 20 km away from the Olaroz Project is the Cauchari lithium and potash project. The project is less advanced but has an inferred resource of 470,000 tonnes lithium carbonate equivalent and 1.6 million tonnes of potash. Orocobre is set for further drilling at the project and noted in its December 2012 quarterly, "Considering the similarities and close proximity of the Cauchari and Olaroz projects, there are compelling synergies including the expected use of shared infrastructure and processing plants, and it is likely that any future development of the Cauchari brines would use the Olaroz facilities. Consequently, from this point forward, the company considers the Cauchari Project and its brine body part of the larger Olaroz Project. In the future, resources for Cauchari will be reported as a discrete part of the overall Olaroz Project resources." Orocobre has also acquired Rio Tinto Borax Argentina in August last year, a company that has been mining and producing boron minerals, boric acid and borax chemicals for over 50 years. In keeping with its aggressive business development approach, Orocobre says it wants to look at expanding Borax Argentina's three mines and undeveloped mineral deposits. The lithium market has shown promise for a number of years, but potential for the commodity over the next decade may be substantial. UK-based research firm Frost & Sullivan released a forecast in February this year that says global lithium-ion battery sales will increase from US $2.13 Bn in 2012 to US $12.84 Bn by 2019. This may mean very good things for companies like Orocobre, who hold lithium deposits in a future where we are expecting global food shortages and a lack of arable land. n www.resourceworld.com 33