An updated scoping study into Piedmont Lithium’s proposed US integrated lithium hydroxide business confirms the project will be a large and low-cost project with a sustainability footprint superior to incumbent producers in China and South America.
The Caroline project, in Gaston county, North Carolina, is located close to established infrastructure, a local talent pool, low-cost energy and proximity to local markets for the monetisation of by-product industrial minerals.
Compared with the 2020 study, the updated scoping report reduced the mine life to 20 years, increased the hydroxide production to 30 000 t/y, increased initial capital costs substantially, but also yielded better economic outcomes.
The new study puts a price tag of $838.6-million on the project, up from $545-million, but reduced the payback period from 3.23 years to 2.92 years. The Carolina project will have an aftertax net present value, using an 8% discount, of $1.92-billion (2020: $1.07-billion) and an internal rate of return of 31% (2020: 26%).
The study is based on Piedmont’s April mineral resource estimate of 39.2-million tons at a grade of 1.09% lithium oxide, and a by-product mineral resource of 7.4-million tons of quartz, 11.1-million tons of feldspar and 1.1-million tons of mica.
Steady-state production increased to 30 000 t/y of lithium hydroxide, from the previous estimate of 22 720 t/y. The project will also produce 248 000 t/y of spodumene concentrate, 252 000 t/y of quartz, 392 000 t/y of feldspar and 70 000 t/y of mica.
The study calculates average lithium hydroxide production cash costs of $2 943/t, and an average production all-inclusive sustaining cost of $3 145/t.
In terms of the envisioned long-term lithium hydroxide price, the latest study uses an average of $15 239/t, up from $12 910/t suggested in a 2020 study.
The study proposes that a downstream lithium hydroxide chemical plant start operations 90 days after the start of concentrate production. The chemical plant is assumed to achieve full capacity within 12 months.
Piedmont report that the new scoping study, prepared by consultancy Roskill, is a substantial improvement over prior studies, despite the use of more conservative assumptions related to mining and metallurgical recoveries.
The project contemplates a single, integrated site with a 20-year mine life, comprising quarrying, spodumene concentration, by-product processing and spodumene conversion to lithium hydroxide.
Piedmont president and CEO Keith Phillips says he is particularly proud of the project’s sustainability profile. “It is critical that raw material supply chains do not detract from the overall sustainability of the transition to electric vehicles.”
He adds that a definitive feasibility study will be carried out later this year, and that Piedmont has engaged with Evercore and JPMorgan as financial advisers to evaluate potential strategic partnering and financial options for the project.