PERTH (miningweekly.com) – Studies by ASX-listed Piedmont Lithium has delivered a viable alternative source for lithium hydroxide based out of the US.
Piedmont on Tuesday revealed that a prefeasibility study (PFS) into a proposed lithium hydroxide chemicals plant in Kings Mountain, in North Carolina, had proven the optionality of a standalone merchant chemicals plant that would convert purchased spodumene concentrate, while a scoping study into an integrated mine-to-hydroxide project had also confirmed that the company could be a low-cost strategic producer of battery grade lithium hydroxide.
The PFS into the potential merchant project estimated that some 22 720 t/y of lithium hydroxide could be produced over a project life of 25 years, at an average cost of production of $6 689/t.
The merchant project is expected to require a capital investment of $377-million for the chemicals plant, and would generate annual earnings before interest, taxes, depreciation and amortization (Ebitda) of $149-million a year, have an after-tax net present value (NPV) of $714-million and an internal rate of return (IRR) of 26%.
“The chemical plant PFS demonstrates the economic benefit of developing a lithium chemical business in North Carolina, with its exceptional infrastructure, low operating cost and competitive tax regime,” said Piedmont president and CEO Keith Phillips.
“Eighty percent of the world’s lithium hydroxide is produced in China, largely by non-integrated merchant producers sourcing spodumene concentrate from Western Australia.
“As global automotive companies electrify their fleet, we expect them to increasingly seek ex-China sources of lithium supply, and North Carolina is ideally positioned to benefit given its proximity to major auto markets in the US and Europe, and the deep lithium talent pool resident in the region.”
For its part, the scoping study into the integrated project has estimated that lithium hydroxide production would remain at 22 720 t/y over a project life of 25 years, with the Piedmont lithium mine to produce at a rate of 160 000 t/y of spodumene concentrate.
In addition to the $377-million required for the chemicals plant, the mine and concentrator operation is expected to require a further investment of $168-million. However, average cost of lithium hydroxide production would reach $3 712/t, while the average cost of spodumene concentrate is estimated at $201/t.
The integrated project is expected to deliver annual Ebitda of $218-million, and would have an after-tax NPV of more than $1-billion, and an IRR of 26%.
Phillips said on Tuesday that Piedmont would now advance the chemical plant through the permitting and definitive feasibility study process, providing the company the option to move aggressively on either a merchant or integrated basis towards first lithium production in 2023, as the transition to electric vehicles begins to take hold.