We have said during the past years that this business has the potential of double digit growth. Our management team has delivered that growth in the past ten years and we expect that growth rate to continue in the future. Therefore, it is important for me to explain the reported growth of only 3.5% in constant currency terms in this quarter.
As you know, a byproduct of our Lithium production is potash which is sold as a fertilizer. In the past, we used to sell our potash exclusively in semi-finished form to a Chilean company. In 2011 we made a strategic decision to build our own finishing facility so that we will be able to sell the finished potash product directly to the market. We expect that this will eventually result in higher profitability for us.
Therefore, as of January 1, 2012, we have canceled our contract with the Chilean company and are in the process of establishing the infrastructure to sell products directly to the market. Since all of the required infrastructure was not in place, our sales of potash in the first quarter of 2012 was about $7 million, less than the comparable quarter last year. We expect to sell the potash produced and stored in the first quarter in the coming months.
If we exclude this potash sales, the rest of our lithium business grew by double digits in the first quarter. One other important item to mention is the sale to the lithium iron battery market, which will be the main engine of growth in the future. Our battery grade lithium sales in the first quarter of 2012 grew more than 100% versus first quarter of 2011.Read the rest of this transcript for free on seekingalpha.com
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