TORONTO, Dec 28 (Reuters) - Lithium exploration company Orocobre said it is making progress on its flagship Olaroz lithium-potash project in Argentina and expects construction to begin in second quarter of 2012.
Brisbane, Australia-based Orocobre and its partner on the project, Japanese trading firmTsusho Corp, have chosen Mizuho Corporate Bank as the lead arranger for the debt component of the project financing. Debt will fund about 60 percent of the projected $207 initial costs.
In a statement late on Tuesday, Orocobre said it expects project financing agreements to be completed by the end of February.
The project, located in the Jujuy province of northwest Argentina, is subject to final approval from the provincial government.
"While it is difficult to predict the exact timing, we remain optimistic that this approval will materialize within a timeframe that correlates with the completion of key financing agreements," the company said in its statement.
Orocobre completed a feasibility study on the Olaroz project earlier in 2011. The lithium brine project is expected to eventually produce about 16,400 tonnes per annum of battery-grade lithium carbonate. (Reporting By Euan Rocha)