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Orocobre says price per tonne of lithium down 24%

Kitco News

Orocobre (TSX:ORL) said today that its average price per tonne of lithium carbonate was down 24% to $5,419 compared to the same quarter a year ago.

Orocobre, which runs its Salar de Olaroz in Argentina's “Lithium Triangle”, released its operation report for the quarter.

Gross cash margins were squeezed, dropping 41% quarter-on-quarter to $1,310 per tonne. The company said it was able to reduce operating expenses 16%. The company said it was still able to stay cash-flow positive.

Looking forward, the company said low prices are shaking out suppliers.

"Growing pressure on non-integrated Australian hard rock suppliers became increasingly apparent resulting in one mine going into care and maintenance. Meanwhile, others announced a shift from continuous to campaign-based production driven by customer orders rather than the previous approach of maximizing operational output," said the company in a news release.

The whole lithium industry has been backed into a corner. Last week Australia-based lithium producer Galaxy Resources (ASX:GXY) is slashing output at its Mt Cattlin operation to conserve mineral resources until market conditions improve. Nemaska Lithium, which is in creditor protection, halved its workforce.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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