COVID-19 restrictions have limited the ability of both Olaroz and its customers to complete sales during the quarter. While most logistical issues have now been addressed, delivery of product is yet to return to normal as customers delay shipments due to lower production and excess inventory.
Following the phased restart of battery and electric vehicle (EV) production, manufacturers are taking a cautious approach to ramping up operations due to the lack of visibility regarding the economic impact of COVID-19 on consumer purchases of EV and portable electronics. In particular, European auto manufacturers have been impacted with April new car sales down 74% on those in January.
While COVID-19 has added pressure to the well-stocked supply chain in the short-term, the pandemic has delivered accelerated investment in some jurisdictions which will have medium and long-term benefits. European Governments have expressed a clear intention to utilise electric vehicle investment and support as a platform to stimulate their respective economies.
In
Despite these growth signals, inventory levels are expected to limit any visible price improvements for some time.
At Olaroz, maintenance scheduled for August will be brought forward to late July/early August. This work is planned to be completed entirely by internal staff and resources to minimise costs. It is expected that operations will cease for up to three weeks while maintenance tasks are undertaken. Expenditure on parts and equipment is anticipated to be less than
Olaroz continues to actively manage inventory while sales are reduced and will match production levels to expected shipment volumes.
Safety remains the Company’s highest priority and the focus is on the health of workers, their families and those of related communities. All activities are being undertaken within a strict biosecurity protocol and in coordination with the Provincial COVID-19 Emergency Operational Centres.
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1. Orocobre report price as “FOB” (Free On Board) which excludes insurance and freight charges included in “CIF” (Cost, Insurance, Freight) pricing. Therefore, the Company’s reported prices are net of freight (shipping), insurance and sales commission. FOB prices are reported by the Company to provide clarity on the sales revenue that is recognized by Sales de Jujuy, the joint venture company in
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