And the second question is, taking advantage of Gonzalo’s [ph] presence, it’ll be interesting to hear more about your outlook for lithium prices in 2024. I know we’ve discussed this a little bit. I just wanted to understand that. So you mentioned prices are expected to remain flat, while demand should grow around 20%. So in terms of supply then, how do you expect this equation to behave ahead, right? So is this stable price related mostly to supply additions in 2023, or are you also mapping significant additions for 2024? If you could give us some projects that you’re tracking closely, that would be interesting as well. And also, what are you observing in terms of the cash cost curve for the segment, right, given the addition in suppliers here?
In that scenario, would you expect stoppages ahead if current prices remain? That’s it from our side. Thank you.
Ricardo Ramos: Sorry, just a little bit confused about many questions, but let me try to the first one, and we can review the other questions in order to be more clear what you want from us. But the first one about Mount Holland, the project, as you know, is a project. The idea of the project is to be a 50,000 metric tons equivalent capacity of lithium hydroxide. That’s the project itself. We are very positive after two months of production, and we think this year, even though it’s the starting year, there’s commissioning of some of the facilities at the production of spodumene. We will produce close to 300,000 metric tons of spodumene that equivalent in lithium hydroxide. If you convert to lithium hydroxide, it’s close to 40,000.
It means it’s very close to the final production capacity that we estimate in this first step of the project. I hope next second semester this year, second half will be according to our 50,000 metric tons per year capacity. That’s – we are looking forward, very positive about what’s going on in the project. And of course, because we expect to produce this close to 300,000 metric tons, that is close to 40,000 metric tons equivalent in lithium hydroxide at SQM. We have 50% of that. It means close to 20,000 metric tons of lithium hydroxide equivalent. Our strategy is both. First, to try to have some tolling in China in order to convert some spodumene to lithium hydroxide in order to sell lithium hydroxide, probably will be no more than 5,000 to 7,000 metric tons.
We don’t know yet. Probably, we will stock and we have inventory of the difference of spodumene in order to have more spodumene when the facility that we are building in Australia in order to produce lithium hydroxide will be ready, that is going to be ready next year. And we are going to have this additional spodumene, but again, we don’t expect to sell spodumene to the market. It’s not our business. We – if we do something is to transform and to have a total agreement in order to transform to lithium hydroxide. But again, it’s not going to be so relevant. It means if you consider our estimates of total volume sales for this year that I hope is going to be close to 200,000 metric tons. No, that’s too high, maybe lower than that. But okay, close to.
And for this total amount, 7,000 is not that big. But that’s what is going to be the first estimate. And the project, the good news is the project is going ahead very good and the production quality, the volumes, the equipment, the work, everything is working, and we’re very happy about that. The second question, I’m not so sure what’s what related.
Unidentified Analyst: Sure. Thanks for the answer. Actually, the second question is more about the outlook for prices, right? So you mentioned that you expect prices to remain flat, while demand should grow, right, by 20%, right? So this is probably due to the oversupply that you guys have mentioned, right? So I just wanted to understand whether most of this oversupply you expect comes from projects that were added in the end of like closer to the end of 2023 or if you’re also like mapping significant additions in supply for 2024? And which projects you guys are tracking for 2024 that you think could be like important for us to track as well? So that’s one question. And then the other question here about the market is regarding the cash cost curve.
So how you’ve seen that curve change given the new suppliers and new projects that have joined the market and in that scenario with renewed cost curve here, if you would expect any stoppages ahead for new – for older projects, higher cost projects if the current prices remain? That’s it.
Ricardo Ramos: One point that is very important, we don’t want to comment on specific projects from our competitors. We don’t – of course, we have a forecast for different of them, and we put that on average what we estimate of the market. But we will not comment on specific if we think one project is going to go ahead or the other not, it’s good or not good, whatever. But again, as we explained before, we foresee stable prices in the short-term. Probably, we are more optimistic – more positive for the second half of this year. Yes, we are more positive but in the short-term, we are more stable in price environment. There will be some announced – previously announced project that everybody knows, some new projects that are coming to the market that everyone knows.
There’s no secret here. We are the ones that are producing or trying to produce lithium, that’s the average we put together, plus we have a very strong view about the demand for this year and the demand in the future. And at the end, the cash cost, I don’t think cash cost is so important in a market that is growing more than 20% per year. It means, if you’re having a market growing that big in terms of lithium, you should consider the total cost because we need new projects, completely new projects every year in order to supply the demand. That’s why what is important is to keep an eye. What is the total cost of new production coming to the market because that’s what is relevant in order to see what is going to be the equilibrium price of lithium carbonate and lithium hydroxide.
Unidentified Analyst: Perfect. Thank you.
Operator: The next question comes from César Pérez-Novoa with BTG Pactual. Please proceed.
César Pérez-Novoa: Good morning everyone or good afternoon. Two questions here. On your iodine market assessment, you foresee demand growth in 2024, but your volumes, as you mentioned in the press release, will be flat. Is this because your production and global market share actually increased a lot in 2023 on the inception of Pampa Blanca. And my second question relates to the Azure Minerals Transaction, you received competition law approval earlier this week. Can you please comment on the next milestones and subsequent filings that you need to make in that market, including your new report on the transaction. Thank you.
Juan Pablo Bellolio: Hi César, this is Juan Pablo. Well, as we explained in the past, in the call of the last quarters, improving the capacity in iodine is really hard. Last year, even with a weaker demand than expected, we were able to bring up capacity and being able to cover the supply of our competitors that were below our expectations. So that’s why during last year, we went up in our volumes, even the demand went down. We’re expecting for 2024 to keep our ability to keep producing with Pampa Blanca as we have done in the past. But we may expect that some of our competitors recover their supply, and that’s why we are considering flat sales, even the demand may be growing.
Ricardo Ramos: César, Ricardo talking about the Azure project. So you have any further question about the iodine or go to the…
César Pérez-Novoa: No, no, that was my question actually on why volumes were flat. Thank you.
Ricardo Ramos: Okay. About Azure, as you know, this kind of transaction in Australia are fully regulated by law. And there’s very specific procedure to follow. We have been under the procedure. We informed the Board of Azure of everything on time and the authorities on time. And the next steps are according to what is in the legal procedure. I don’t want to comment about that in terms that there is some formal process we have to follow. And we have been following the formal process. And you can be sure that we will inform on time to the market when we move to the next step in the project. But we are fully committed with our partners. We are – we think it’s a great project, and we have a very good relation with Hancock and together, we think we’re going to have a great project. That’s what I want to say now. Thank you.
César Pérez-Novoa: Okay. That’s fair enough. Thank you, Ricardo.
Operator: And at this time, there are no further questioners in the queue, and this does conclude our question-and-answer session. At this time, I would like to turn the conference back to Irina Axenova for any closing remarks.
Irina Axenova: Thank you, Chris, and thank you everyone for joining us today. We look forward to having you on our next call. Have a great day. Goodbye.
Operator: The conference has now concluded. Thank you for attending today’s presentation. And you may now disconnect.
