JM, it seems the industrial grade product is in strong demand from customers as well as being required for Orocobre's own use for in their rapid expansion plans which shows the benefits of using industrial grade as lower risks/higher pricing for the Hydroxide - see slide below from their 1H FY 2017 Presentation.
RAPID EXPANSION STRATEGY
Orocobre and TTC plan a rapid expansion strategy to double current lithium carbonate production capacity to 35ktpa and to construct a 10ktpa lithium hydroxide plant in Japan
Proposed product mix
• 17,500tpa Battery Grade from existing purification circuit, and 17,500tpa Industrial Grade, of which 9,000tpa will be used to feed the planned 10,000tpa* lithium hydroxide plant in Japan
Benefits of the proposed product mix
Lower risk – simple duplication of bores, ponds and primary circuit
Higher pricing – lithium hydroxide price premium to be captured
Capital Cost
Olaroz expansion estimated capex $US160M – lower capex with no duplication of purification circuit
Lithium Hydroxide plant estimated capex $US30M Funding and Subsidies
Anticipated access to Japanese supported project debt on similar terms to the existing Mizuho facility
Subsidies available at both Japanese national and prefecture level to support the Lithium Hydroxide project Further Potential
• Development of a second lithium hydroxide plant outside of Japan is being investigated
