An anonymous director reports

OROCOBRE LIMITED HALF-YEAR ACCOUNTS

Orocobre Ltd.'s Olaroz project joint venture is operated through Sales de Jujuy S.A., a subsidiary of Sales de Jujuy PTE, a Singaporean company that both Orocobre and Toyota Tsusho Corp., respectively, are shareholders in, directly and indirectly. The effective Olaroz project equity interest is Orocobre 66.5 per cent, TTC 25.0 per cent and Jujuy Energia y Mineria Sociedad del Estado 8.5 per cent.

The joint venture between the company and TTC was created on Oct. 17, 2012, and the accounting consequences reflected in the June 30, 2013, financial statements. Since that date, Orocobre has recognized its interest in the joint venture as an equity-accounted investment. Under the equity method of accounting, Orocobre's interest in the joint venture was recognized on the balance sheet at the date of the transaction at fair value.

This carrying amount is then adjusted for subsequent equity investments, the company's share of the postacquisition profit or loss, other equity movements of the joint venture, and any dividends received. As a result, capital expenditure by the joint venture and drawdowns on the project financing facility are not being recognized directly in the group's financial statements.

Olaroz lithium project (Orocobre, 66.5 per cent)

The Olaroz lithium project is located in the Puna region of Jujuy province in northern Argentina approximately 230 kilometres northwest of the capital city of Jujuy at an altitude of approximately 3,900 metres above sea level. The project is the first large-scale greenfields lithium brine development in approximately 20 years and was designed to have an initial capacity of 17,500 tonnes per annum of battery-grade lithium carbonate. This capacity accounts for approximately 10 per cent of the current global lithium market, which is forecast to experience a 10-per-cent year-on-year growth in demand until 2020.