TORONTO (miningweekly.com) – Talison Lithium, which on Monday reported a 68% drop in net income to A$1.6-million for the September quarter on a stronger Australian dollar, said it expected prices for its products would continue to climb next year in a constrained market.

CEO Peter Oliver reiterated his view that the long-term and short-term trends for lithium prices remained strong, despite global economic uncertainty, adding that the turmoil in Europe would not have a major direct impact on Talison.

The company only sells one-tenth of its output into the continent, mainly to Germany.

Oliver said Talison had contracted its 2012 fiscal second-quarter (calendar fourth quarter) sales at current prices, while it expected tighter markets would lead to higher prices over the full 2012 calendar year.

The TSX- and ASX-listed company, which owns the Greenbushes mine near Perth, said earlier this year it hiked prices after other major producers did so by up to 20% in June.

According to Talison, it is the biggest global producer of lithium, with a 28% market share.

The company reported higher production for the quarter ended September 30, as well as higher prices, but profit fell because of a 16% appreciation in the value of the Australian currency.

At Greenbushes, Talison is busy building an expansion that will double capacity to 740 000 t/y of lithium concentrate, or 110 000 t/y of lithium carbonate equivalent, in a project costing A$65-million to A$70-million.

The Perth-based firm also plans to build a plant that will upgrade the lithium concentrate it currently produces at the mine into higher-value lithium carbonate.

That would allow it to take greater advantage of the growing market for the material used to make rechargeable batteries that go into electric vehicles and electronics.