Way back in the beginning the project was billed as a lithium-potash project. There is certainly plenty of potash there - the Olaroz Measured & Indicated resource is equivalent to 19.3 million tons of potash (KCl).
It got a favourable mention in the DFS - it was expected that the potash co-production could reduce the Lithium carbonate production cost by around 280 USD/t. Output was expected to be 10 ktpa as per this comment in the NI43-101 report
"The production of potash and boric acid has been a secondary focus. Test work has shown that potash of commercial grade can be produced by flotation of mixed halite and potash (Sylvite) salts. Higher sulphate concentrations at depth has impacted on expected potash recoveries with the current process route now expected to produce approximately 0.6 tonnes of potash per tonne of lithium carbonate or 10,000 tonnes per annum.
"The Company plans to undertake additional process development work with the aim of reducing the impact of the increased levels of sulphate and increasing potash production. As the potash circuit is required two years after the lithium carbonate production has commenced, it is expected that this work will be completed well in advance of this deadline."
By the time the project was financed this potential yield had been lifted to 20,000 tpa, presumably with further reduction in lithium production cost.
The potash circuit was expected to cost 14.5m USD and be required from the third year of operation. The potash circuit is quite separate from the lithium plant - precipitated salts would be harvested from the more concentrated ponds and fed to the Potassium Chloride plant.
"The purpose of this plant is to produce a potash product by flotation of a potash
concentrate [KCl or silvite] from the mixed salts, mainly glaserite [Na2SO4.3K2SO4]
obtained in the solar evaporation process. The potash process has four stages:
KCl liberation (by milling)
KCl concentration (by froth flotation)
Solid – liquid separation (with centrifuges)
Drying"
So, 3 years in, we might have been expecting some word of the potash circuit by now, but for one little problem.
"Roskill has provided Orocobre with a forecast of annual high, low and average price forecasts for lithium carbonate and potash for years 2011 to 2025. The average price forecast for battery grade lithium carbonate is US$6160 per tonne and US$592 per tonne for Potash."
Potash prices have
gone in to a prolonged slump. After a decent price boom, the market responded with a decent amount of new supply. Spot price is currently sitting around 216 USD/t and the outlook still looks uncertain - even the potash bulls at BHP are biding their time with the
Jansen project.
So, as modest as the investment may be, I wouldn't expect a potash circuit any time soon - there are better places for ORE to spend the cash. At the same time we don't need to fret about the potash - it is gradually accumulating in the ponds and will be there for the harvesting when prices improve.
