JOHANNESBURG (miningweekly.com) – Nasdaq- and ASX-listed Piedmont Lithium plans to start construction on its lithium hydroxide chemical project, in North Carolina, in the US, early in 2021.  

CEO Keith Phillips tells Mining Weekly Online that construction should take between 12 and 18 months to complete and will start once the company’s permitting and feasibility processes have been finalised.

The construction of the mine and the chemical plant will happen concurrently and first production is targeted for late 2022.

Piedmont applied for its mine’s federal permits in December last year, which should be granted before the end of this year, while the chemical plant is undergoing a different permitting process that kicked off in September.

Phillips expects this process to take about 12 months.

The company is, meanwhile, progressing infill drilling to declare a reserve as part of a feasibility study, informed by a scoping study that was published in August.  Chemical conversional testwork to produce lithium hydroxide will commence this month.

The company’s mineral resources are estimated at 27.9-million tonnes, grading 1.11% lithium oxide.

The study included a steady-state 22 700 t/y lithium hydroxide chemicals plant with a 23-year plant life, supported by a mine producing 160 000 t/y of 6% lithium oxide spodumene concentrate, with a 25-year mine life.

Phillips expects the mine to employ over 100 people and the chemical plant a further 100 people.

Initial project capital expenditure is estimated at $510-million, with equity and debt funding to be arranged in parallel with the feasibility study and permitting processes.

He believes the company will be the lowest-cost lithium hydroxide producer in the world, owing to its location in North Carolina, which ensures low-cost power, low transportation costs and the fact that it is situated near automotive manufacturers.  

The company is continuing with discussions with potential offtake partners and Phillips says the company expects at least three-quarters of its supply to be sold under offtake agreements to “four to five main customers”, including cathode and battery companies, as well as automotive companies, with a focus on European and North American battery supply chains.

DEMAND FACTORS

Piedmont has determined that lithium hydroxide demand will grow at a 35% compound annual growth rate (CAGR) between 2018 and 2025, while hydroxide shortages are expected by 2023.

Lithium carbonate demand will grow at a lower CAGR of 15% over the same period.

Phillips says lithium hydroxide demand is growing owing to increased use of high-nickel cathodes; people are looking for batteries with higher energy density, more power and more range.

Typically, automakers such as Volkswagen, Tesla and Porsche are using high-nickel chemical cathodes, which require lithium hydroxide.

He adds that lithium carbonate is a bigger business globally now and will remain an important commodity for the time being, since it is widely used in mobile phones and other electronic devices.

Phillips further highlights that hydroxide shortages will come off the back of the significant demand growth and new lithium hydroxide projects will not be built fast enough.

This should ensure strong pricing by the time Piedmont’s project comes on line.

Mining Weekly Online earlier this month reported that the electric vehicle industry continues to grow. E-trader Amazon.com said it would buy 100 000 electric delivery vans in the near future, which will be the largest electric vehicle order in history.

Piedmont states that automakers Volkswagen, BMW, Geely, Changan, Renault and Ford have already made capital investments into electric vehicles, which will start being developed before 2025.