PERTH (miningweekly.com) – Lithium miner Orocobre has swung into a loss during the half-year ended December, as lithium prices tumbled.
The ASX- and TSX-listed company on Friday reported a net loss of $18.9-million for the interim period ending December, compared with a net profit of $24-million in the previous corresponding period.
While lithium carbonate production increased from 6 075 t to 6 679 t in the period under review, and lithium carbonate sales volumes increased from 5 163 t to 6 395 t, the realised lithium carbonate price declined from $12 295/t to $6 157/t, while the gross cash margin for lithium carbonate declined from $8 044/t to $1 514/t.
Revenues for the interim period reached $39.4-million, compared with the $63.5-million generated in the previous corresponding period.
“Orocobre has continued to deliver positive operating margins despite weaker market conditions,” said MD and CEO Martin Perez on Friday.
“Our operating strategy retains a focus on safety, quality and productivity which is delivering improved operating results and ensuring we remain a profitable, low cost producer of lithium carbonate.
“Cost management is paramount and towards the end of the half, we have implemented further cost saving initiatives at Olaroz, and across the rest of our business through the elimination of non-essential contractors, travel and similar expenses.”
Orocobre noted that the cost reduction plan had resulted in a restructuring cost of some $400 000.
Looking ahead at the full year, Orocobre was expecting production from Olaroz to be at least 5% higher than the production achieved in the full 2019, with product prices in the March quarter expected to around $5 000/t.
Meanwhile, construction of the Stage 2 expansion of the Olaroz lithium facility was some 25% completed by the end of the interim period.
The Stage 2 expansion will increase total expected lithium carbonate production to around 42 500 t/y, with part of this industrial grade lithium carbonate to be used as feedstock for the proposed Naraha lithium hydroxide plant.
The Stage 2 expansion is currently estimated to cost some $295-million.