Orocobre cuts lithium guidance on weather impact

Orocobre cut its output guidance for its Olaroz lithium facility in Argentina due to heavy snow.

Production at the Jujuy province asset was suspended for three days last week after stocks of soda ash, a key process reagent, were depleted as a result of a three-week closure of the Paso de Jama road under heavy snow.

Paso de Jama mountain pass through the Andes is the northernmost road border crossing between Chile and Argentina. The pass has since reopened allowing soda ash stocks to be replenished, Orocobre said in a release.

Conditions at the Olaroz facility were less severe than at Paso de Jama, but light snowfall and cloud cover impacted evaporation rates, resulting in lower harvest pond concentrations and lower output.

Orocobre expects 2017 lithium carbonate production of 11,700-11,800t, down from 12,000-12,500t previously forecast, with Q2 output in the 2,400-2,500t range.

A backlog of exports at the site due to the adverse weather conditions has been cleared, the company added.

BORAX ARGENTINA

Snow and freezing conditions significantly affected mining and transport of water at the Tincalayu mine, part of Orocobre's Borax Argentina operations.

Processing was suspended for 10 days, resulting in the loss of about 700t of decahydrate equivalent production.

The Sijes operations were less affected, with about 200t lost concentrate output and export delays.

"Our planning saw us holding the maximum level possible of consumables with additional contingency measures in place," CEO Richard Seville said. "However, it was not sufficient to see us through this extreme event."

The overall process of re-profiling the pond brine inventory is developing as expected, despite the impact of the weather conditions, he added.

Orocobre plans to increase lithium carbonate output to 17,500t/y at Olaroz.

Several mines in northern Chile's Antofagasta region (II) were suspended after unusually heavy rains earlier in June. The rains were caused by the same weather systems which affected Olaroz, Orocobre said.