https://www.miningweekly.com
PROJECT|Surface|Waste|Products|Waste
PROJECT|Surface|Waste|Products|Waste
project|surface|waste-company|products|waste

Lepidico reruns lithium project economics

30th October 2023

By: Mariaan Webb

Creamer Media Senior Deputy Editor Online

     

Font size: - +

Australia-listed Lepidico has rerun the economics of its Phase 1 project, comprising a mine in Namibia and a chemical conversion plant in Abu Dhabi, to reflect prevailing lithium price forecasts and to include new ore reserves.

Phase 1 investment fundamentals remain robust, the company said on Monday, reporting an aftertax net present value (NPV), using an 8% discount, of $457-million for the integrated project.

The pretax NPV is $522-million, of which 32% is attributable to the Karibib operation, in Namibia, and 68% to the Abu Dhabi chemical conversion operation.

Capital cost estimates remain unchanged at $266-million and the payback for the project remains less than three years, Lepidico said.

The greatest single variance in valuations since the May 2020 definitive feasibility study (DFS) is associated with the prevailing BMI lithium price forecast.

Lepidico said that lithium chemical prices have been particularly volatile over the past five years, and as a result, price forecasts have evolved rapidly.

Further, the inclusion of the Helikon 4 satellite openpit and the surface stockpile material at Rubicon ore reserves has added more years to the Phase 1 project life. The additional reserves extended the operating life by four years to 19 years on higher grade material of 0.62% lithium oxide.

Lepidico also said that the integrated Phase 1 project is positioned in the second quartile of the global all-in sustaining costs (AISC) curve for 2030 after by-product credits are taken into account.

Life-of-mine AISC are estimated to average $8 730/t lithium carbonate equivalent (LCE) ($7 680/t lithium hydroxide) while C1 costs are estimated at $5 890/t LCE ($5 185/t lithium hydroxide), after by-product credits.

Chemical plant by-products include caesium, rubidium, amorphous silica, sulphate of potash and a gypsum-rich residue, with no solid process waste.

The BMI 2023 cost curve indicates that the marginal cost of production is over $35 000/t LCE. However, at prevailing prices of $20 000/t to $25 000/t, some high cost lithium production has been curtailed. The marginal cost of production in 2030 is forecast to be about $30 000/t LCE, which provides fundamental support for the long term price forecast of US$28 980/t LCE real ($30 980/t lithium hydroxide).

Meanwhile, Lepidico said that it is continuing to work with advisers to develop funding structures and secure conditional finance commitments this quarter.

The company’s financing strategy for the vertically integrated project has centred on core funding from the public sector for the Karibib mine-concentrator and the Abu Dhabi chemical plant. However, the firm noted that these funding processes have taken “far longer than originally envisaged”.

Edited by Creamer Media Reporter

Comments

Showroom

Rio-Carb
Rio-Carb

Our Easy Access Chute concept was developed to reduce the risks related to liner maintenance. Currently, replacing wear liners require that...

VISIT SHOWROOM 
Immersive Technologies
Immersive Technologies

Immersive Technologies is the world's largest, proven and tested supplier of simulator training solutions to the global resources industry.

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Magazine round up | 23 February 2024
Magazine round up | 23 February 2024
23rd February 2024
Resources Watch
Resources Watch
21st February 2024
Photo of Martin Creamer
Major hydrogen economy developments in SA
21st February 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.203 0.242s - 145pq - 2rq
Subscribe Now