A N N U A L R E P O R T

2021

Orocobre

at a Glance

Orocobre Limited is a dynamic global lithium chemicals supplier and an established producer of boron.

The key assets of Orocobre Limited (Orocobre, the Company) are a 66.5% interest in Olaroz Lithium Facility (Olaroz), 100% of the Cauchari Lithium Project, a 75% economic interest in the Naraha Lithium Hydroxide Plant and 100% of Borax.

Contents

Overview

Financial Report

41

Letter from the Chairman

3

Financial Statements

41

Sustainability and Safety

4

Directors' Declaration

82

Operating and Financial Review

5

Independent Auditor's Report

83

Financial Overview

5

Additional Information

90

Assets Overview

6

Resources and Reserves

90

Olaroz Lithium Facility

7

Schedule of Tenements

99

Naraha Lithium Hydroxide Plant

9

Shareholder and ASX Information

105

The Lithium Market

10

Shareholder Information

105

Borax Argentina S.A.

11

Corporate Directory

110

Directors' Report

12

Company Directors

12

Environmental Regulation and Performance

20

Remuneration Report

21

Auditor's Independence Declaration

38

Corporate Governance Statements

39

OROCOBRE ANNUAL REPORT 2021

2

Letter from the Chairman and CEO

FY21 has been one of the most successful ever for Orocobre.

Despite the ever-present backdrop of COVID-19, FY21 has been a watershed year for Orocobre. We have delivered the best operating results to date and as we write we have now completed a company making merger with Galaxy Resources.

COVID-19 remains a challenge for the whole world, but it has been an occasion for our team to shine. With the collaboration of our employees, we have adapted work practices to allow our businesses to continue operating while keeping employees, their families and communities safe and healthy. With the support and cooperation of government and local health authorities we have started vaccinating our workforce in Argentina.

The operating performance of our business units has been exceptional given the circumstances and at Olaroz we have seen improvement in all key metrics including:

  • A record level of battery grade lithium carbonate production, reaching 66% in the last quarter;
  • A 6% increase in total production despite COVID related shutdowns;
  • A 12% decrease in cost of sales with a strong focus on efficiency; and
  • A 14% increase in revenue despite the weak market and pricing conditions at the start of the year.

Importantly, we finish the year with significantly higher prices for our product and the best industry outlook we have seen.

With such a strong market backdrop, it is timely that FY22 should see completion of construction at the 25,000 tonne Olaroz Stage 2 expansion and commissioning of the 10,000 tonne per annum Naraha Lithium Hydroxide Plant in Japan.

In April we announced a merger of equals with Galaxy Resources and with the overwhelming support of Galaxy shareholders we have now completed this merger.

This merger provides the combined group a portfolio of world class assets that allow us to partner with the largest and most influential customers that are looking for secure supply of high-quality lithium chemicals.

This merger was never about cutting people or costs to achieve synergies but is based on the complimentary sets of capabilities in the two organisations. We now have teams experienced in both brine and hard rock asset development and an unparalleled pipeline of projects that should see us grow to be the 5th largest producer of lithium chemicals.

As we move into the implementation phase of the merger, we would like to take the opportunity to welcome all Galaxy employees and shareholders to Orocobre.

The merged group will require a new name to reflect the potential synergy and value that comes from combining the two companies. We will soon put to shareholders a change of name to ALLKEM Limited, recognising that together we can achieve more and our focus on battery chemicals.

We would like to acknowledge our employees, management team and Board colleagues for their work through this most challenging but successful year. In particular, we single out our thanks and appreciation to our board colleagues Patricia Martinez, Masaharu Katayama and John Gibson who have retired from the board as part of the merger process. We would also like to thank the communities with whom we operate every day, our joint venture partner Toyota Tsusho Corporation, JOGMEC and Mizuho as well as the National and Provincial governments in Argentina who continue to support us as we grow our business for the benefit of all stakeholders. Finally thank you, our shareholders for your support and encouragement throughout the year.

Robert Hubbard

Martín Pérez de Solay

Chairman

Managing Director and CEO

August 2021

August 2021

OROCOBRE ANNUAL REPORT 2021

3

Sustainability

and Safety

OROCOBRE ANNUAL REPORT 2021

Sustainability Overview

As a signatory of the UN Global Compact, and in accordance with the UN Sustainable Development Goals, Orocobre seeks to promote the global transition to a low-carbon future, optimise operational performance with respect for people and the environment, and improve the quality of life for local communities.

Orocobre's Sustainability Strategy is based on the understanding that the Company can only grow within the limits set by society and the environment, ensuring stakeholder relationships and respect for local and global environmental issues are factored into the management of the Company's products, operations and communities.

Detailed disclosures regarding Orocobre's Sustainability Strategy and Performance, including Material Issues, Performance Data, Case Studies and Management Approach Disclosures for all Orocobre's Sustainability Focus areas are available at www.orocobre.com/corporate-responsibility/sustainability-report/

Responsible Product

Sustainable Operations

Thriving Communities

To be the supplier of choice for

To maintain the highest levels

To cultivate thriving, resilient

quality chemicals that promote

of safety, efficiency, and resilience

communities that are autonomous

the global transition to a low-

and the lowest operating costs in

and self-sustaining.

carbon economy.

the industry.

Climate Risk

Orocobre has identified a series of Climate-related risks and opportunities across our operations and value chain which have been evaluated and integrated into the Enterprise Risk Register. Complete disclosure of our Climate Risks and progress in alignment with the Task Force for Climate Related Disclosures are provided in our Climate Management Approach Disclosure.

Health and Safety

The health and safety of our employees and contractors remained a priority focus for Orocobre in FY21. Key Health and Safety Indicators across our operations in FY21 are provided below.

Sales de Jujuy (Olaroz)

Borax

Group

Employees

Contractors

Total

Employees

Contractors

Total

Employees

Contractors

Total

TRIFR

TRIFR

TRIFR

FY21

3.0

1.7

2.3

3.0

0.0

2.6

3.0

1.6

2.4

FY20

1.8

3.8

3.0

8.3

14.0

8.8

4.7

4.2

4.5

FY19

3.3

3.3

3.3

3.8

0.0

3.4

3.5

3.1

3.3

LTIFR

LTIFR

LTIFR

FY21

0

0.9

0.5

3.0

0

2.6

1.2

0.8

1.0

FY20

0

3.1

1.9

3.6

14

4.4

1.6

3.6

2.5

FY19

3.3

3.3

3.3

2.5

0

2.3

2.9

3.1

3.0

TRIFR: number of lost time, medical treatment, restricted work and fatality incidents per million man hours worked

LTIFR: total incidents resulting in lost time by million man hours worked

Detailed information about Orocobre's management of Health and Safety can be found in our Health and Safety Management Approach Disclosure. This will be updated as part of our FY21 Sustainability Report process.

4

Operating and

Financial Review

Financial Overview

To assist readers to better understand the financial results of Orocobre, the financial information in this Operating and Financial Review includes non-IFRS unaudited financial information.

Olaroz is operated through Sales de Jujuy (SDJ), a 91.5% owned subsidiary of Sales de Jujuy Pte Ltd (SDJ PTE), a Singaporean company owned by Orocobre (72.68%) and Toyota Tsusho Corporation (TTC, 27.32%). The effective Olaroz equity interest is Orocobre 66.5%, TTC 25.0% and Jujuy Energía y Minería Sociedad del Estado (JEMSE) 8.5%.

Group

The Group produced a net loss after tax of

US$89.5 million (2020: US$67.2 million) on revenue

of US$84.8 million (2020: US$77.1 million).

The net loss after tax includes US$96.8 million of non-cash items consisting of income tax expense of US$66.1 million, depreciation of US$18.8 million, impairment of US$0.9 million, foreign exchange net

loss of US$3.6 million, offset by provision remeasurement of US$3.5 million. Finance net costs during the year were US$21.1 million including US$8.4 million of non- cash charges.

The income tax expense included the impact on deferred tax balances from an increase in the tax rate in Argentina from 25% to 35% (US$49.7 million) and foreign exchange and inflation adjustments (US$25.3 million).

Group EBITDAIX was profit US$2.9 million inclusive of US$2.4 million income from a sale of usufruct and US$3.7 million of restructuring costs, care and maintenance, COVID-19 costs and US$1.2 million of Galaxy merger costs.

The net assets of the Group increased to US$725.1 million as at 30 June 2021 (2020: US$690.6 million), including cash balances of US$258.3 million (2020: US$171.8 million). The main reasons for the increase in net assets is due to the issue of shares of US$119.4 million offset by net loss for the year of US$89.5 million.

Capital expenditure for the year totalled US$97.6 million (2020: US$136.9 million).

Olaroz (100%)

Unit of measurement

2021

2020

Olaroz key operational results for year ended 30 June 2021

Lithium carbonate produced

tonnes

12,611

11,922

Lithium carbonate sold

tonnes

13,319

10,514

Realised lithium carbonate price

US$/tonne

4,983

5,520

Gross cash margin lithium

US$/tonne

1,123

1,148

Cash operating costs lithium carbonate

US$/tonne

3,860

4,372

1 'EBITDAIX' is 'Earnings before interest, tax, depreciation and amortisation, impairment, foreign currency gains/(losses), share of associate losses, share of profit of joint ventures, gain and other costs on business combination'.

This measure is non-IFRS financial information and has not been subject to audit by the Company's external auditor.

OROCOBRE ANNUAL REPORT 2021

5

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Disclaimer

Orocobre Limited published this content on 25 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 August 2021 22:53:08 UTC.