TORONTO (miningweekly.com) – Shares in TSX-listed Talison Lithium climbed 5% on Thursday morning, after the miner said it had hiked production at its Australian Greenbushes operation by 25% for the three months ended June.

For the full year, production showed a 30% increase to 342 097 t of lithium concentrate.

While production was significantly higher, sales for the quarter only edged up 5% to 92 416 t lithium concentrate, meaning that the company might not enjoy the full financial benefit of the production boost when it reports its financial results in September.

The company noted that it sells its product in large shipments, which can cause production and sales to differ in individual quarters.

Talison also said that it planned on building a minerals conversion plant that would process lithium concentrate into lithium carbonate, used to make rechargeable batteries.

The first stage of the plant would have a 20 000 t/y lithium carbonate capacity, to be doubled in the second stage.

The company said it had started basic engineering and location studies for the plant, which it expected would start producing in 2015.

“We are very optimistic about the outlook for Talison as a result of the rapidly changing supply/demand dynamics developing in the lithium industry. Recent substantial price increases from other lithium suppliers are reflective of a tightening in supply conditions while global demand remains strong,” said CEO Peter Oliver.

Talison was busy with an expansion at the Greenbushes mine, which is set to double lithium concentrate capacity to 740 000 t/y by the middle of next year.

“Completion of the current expansion will ensure Talison is highly leveraged to a stronger lithium price in a world where security of supply is expected to become increasingly important as governments look to reduce reliance on oil imports and decrease carbon dioxide emissions,” Oliver commented.

The Australia-based company also owns the Salares 7 brine deposit in Chile, where it is accelerating its exploration program.

Earlier this week, Chile-based signumBOX GM Daniela Desormeaux said that while demand for lithium was growing at a fast pace, thanks to electronics and the electric vehicle industry, supply would likely manage to keep pace.

“If demand grows as we expect, we should expect that the market remains balanced, and prices should remain at current levels, in real terms,” she said.

Talison’s shares gained 5% in Toronto to trade at C$4.03 each by 10:25, valuing the firm at C$428-million.
 

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