The updated Keliber definitive feasibility study (DFS) to consider producing lithium hydroxide, rather than lithium carbonate, has improved all the key financial metrics of the Finnish project.
The summer of 2018 DFS was based on the production of battery-grade lithium carbonate; however, with demand in Europe moving to lithium hydroxide, Keliber has adjusted its DFS.
“The increase in demand for lithium hydroxide is a result of the shift in battery cathode chemistry used by the automotive industry towards to the so-called high-nickel content chemistry. This change has been very fast. We see the European lithium value chain transforming extensively due to electrification of transport and the strong contribution of the European automotive industry in electrifying their fleets,” comments CEO Pertti Lamberg.
The changes in the DFS are small and only concern the downstream part of the chemical plant in Kokkola. The updated DFS is now based on the production of 12 500 t/y of lithium hydroxide, about 1 500 t/y higher than the previous planned production of lithium carbonate.
The updated DFS of Keliber’s project shows a 73% increase in the pre-tax net present value, at an 8% discount rate, to €510-million, a 17% increase in the pre-tax internal rate of return of 28% and a shorter payback period of 3.7 years.
Keliber states that the project has potential to generate 34% more revenue of €3.06-billion over its 20 year mine life.
The changes, however, will result in a 23% increase in total project development capital cost to €313-million, €236-million of which is a direct investment estimate for the mines, concentrator, tailings storage facilities, chemical plant and closure costs.
The total unit operating cost for lithium hydroxide is estimated at €4 125/t, which the company says makes Keliber one of the low-cost producers of lithium hydroxide.
Citing a forecast by Roskill Consulting Group, Keliber says the selling price of battery grade lithium hydroxide will be between $12 470/t and $15 742/t from 2019 to 2032.
The main purpose of the updated DFS is to qualify the company’s lithium project for construction financing. Keliber reports that it continues, together with the appointed financial advisers, the various activities to ensure optimal combination of debt and equity for the project.