PERTH (miningweekly.com) – Dual-listed lithium miner Allkem posted record production from its Olaroz lithium facility, in Argentina, during the three months to December.

The ASX- and TSX-listed company on Wednesday reported that Olaroz had produced a record 4 253 t of lithium carbonate in the three months to December, up 17% on the previous corresponding period.

Half-year production from the project also reached a record 7 542 t, up 13% on the previous record in 2019.

Olaroz generated $151-million in sales revenue during the quarter under review, up from the $150-million in the previous quarter, despite sales volumes declining by 16% quarter-on-quarter, to 3 131 t of lithium carbonate, of which 42% was battery grade. The average price received from third party sales reached $53 013/t.

Cash costs for goods sold from Olaroz rose by 8% on the previous corresponding period, to $4 682/t, owing to inflationary impacts which Allkem said were partially offset by a materially improved operational performance and a lower proportion of battery grade sales.

Meanwhile, construction of the Stage 2 expansion of the Olaroz project, which comprises a primary lithium carbonate production circuit designed to deliver an additional 25 000 t/y of technical grade lithium carbonate, has reached a 96% completion rate, with up to 850 personnel on site during the quarter.

Pre-commissioning activities are underway within the carbonation plant, with full process plant commissioning commencing in the March quarter and progressing through to the June quarter. New operating staff have been recruited and are being trained in Olaroz Stage 1 in anticipation of first production and operations ramp-up during the June quarter.

At the Mt Cattlin operation, in Western Australia, 16 404 t of spodumene concentrate was produced in the quarter, down slightly from the 17 606 t produced in the previous quarter, while costs of production at the Australian operation increased from $796/t to $1 016/t in the same period.

Allkem said on Wednesday that 15 702 t of spodumene concentrate was shipped during the quarter at an average grade of 5.3% lithium oxide, generating revenue of $83-million, a 5% quarter-on-quarter increase.

An additional $32-million in revenue was generated from shipments of 53 715 t of low-grade spodumene concentrate.

At Naraha, in Japan, Allken produced its first lithium hydroxide in late October last year, using technical grade lithium carbonate from Olaroz. Product quality exceeded expectations, enabling approximately 200 t of technical grade lithium hydroxide to be sold to third-party customers.

Allkem told shareholders that with first production achieved, the focus will be on progressively increasing the product quality and consistency to reach nameplate capacity of 10 000 t/y and to achieve qualification of the product by customers.

Meanwhile, construction work on the first stage of the Sal de Vida project, in Argentina, also progressed during the quarter under review. Development of the project is being undertaken in two stages with Stage 1 currently in construction targeting 15 000 t/y production capacity.

During the month of December, the Catamarca government issued the environmental impact assessment approval to construct the third string of ponds fully enabling the 15 000 t/y production capacity.

As reported by Mining Weekly earlier this week, the Canadian government has now also approved Allkem’s James Bay lithium project, in Quebec, which will produce an average of 321 000 t/y of spodumene concentrate with a 19-year mine life.

According to a December 2021 feasibility study, James Bay will require a capital cost of $285.8-million. The project has an aftertax internal rate of return of 35.2% and a payback period of 2.9 years. The net present value is $823-million.

Allkem said that engineering work on the project was 54% complete by the end of the quarter, and engineering of the process plant package was at 75%.

A 19 255 m resource extension drilling programme commenced in late November to test open mineralisation around the current orebody. Drilling progress was 24% at the end of the quarter. A mineral resource update is targeted by the end of the first half of 2023.