Lithium miner Orocobre and its joint venture (JV) partner Toyota Tsusho Corporation have approved the development of the $77.6-million Naraha lithium hydroxide plant, in Japan.

“We are excited to announce the approval of the Naraha project. The construction of the Naraha lithium hydroxide plant will further cement Orocobre’s position as a global lithium chemicals producer operating at the bottom quartile of the lithium cost curve,” said MD and CE Martin Perez.

“The new hydroxide plant will be the first of its kind in Japan and provides Orocobre product diversification suitable for different battery technologies and the potential for significant margin growth on our primary lithium carbonate being converted to battery grade lithium hydroxide.”

The feedstock for the Naraha plant will be sourced from Orocobre’s Olaraz project’s Stage 2 expansion, which will produce primary grade lithium carbonate.

Some 9 500 t/y of primary grade lithium carbonate will be used to produce 10 000 t/y of battery grade lithium hydroxide.

Orocobre, which will hold a 75% interest in the project, on Friday said that construction of the lithium hydroxide plant would start in the first half of 2019, with commissioning expected in the first half of the 2021 calendar year.

The JV will be entitled to a Japanese government subsidy of some $27.1-million, which will reduce the capital cost of the project to $50.5-million, while operating costs have been estimated at around $1 500/t.

Orocobre noted that the plant will be funded through a combination of term loans and shareholder equity, with Orocobre contributing $6.8-million in equity with Toyota Tsusho contributing $2.3-million.

Sales of the lithium hydroxide will be managed by Toyota Tsusho as exclusive sales agent under a joint marketing arrangement, and the majority of the production is expected to be delivered into the Japanese battery industry.