Liontown pursuing downstream processing in WA

22nd October 2020 By: Esmarie Iannucci - Creamer Media Senior Deputy Editor: Australasia

PERTH (miningweekly.com) – A downstream scoping study into the Kathleen Valley lithium/tantalum project, in Western Australia, has demonstrated the financial upside to an integrated mining, processing and refining operation to produce lithium hydroxide monohydrate (LHM), or lithium sulphate monohydrate (LSM).

An updated prefeasibility study (PFS) recently completed at the Kathleen Valley lithium/tantalum project found that the project could support the production of 350 000 t/y of 6% spodumene concentrate, along with 430 000 t/y of tantalum, with the mine life estimated at around 40 years, based on a throughput rate of two-million tonnes a year.

The updated PFS estimated a capital cost of A$325-million.

The downstream scoping study estimated that an integrated LHM operation would require a total capital spend of A$1.1-billion, while an integrated LSM operation would require a capital spend of A$0.9-billion.

At steady state production, both the LHM and the LSM projects would produce at a rate of 430 000 t/y of tantalum, with the LHM refinery to have a design production rate of 58 000 t/y, while the LSM refinery would have a production rate of 88 000 t/y.

The scoping study estimated that the integrated LHM operation would have a post-tax net present value (NPV) of A$4.8-billion and an internal rate of return of 41%, with life-of-mine (LoM) cash flows estimated at A$19.5-billion post tax. LoM operating costs for the LHM operation have been estimated at $4 744/t.

Meanwhile, the scoping study estimated that the integrated LSM project would have a post-tax NPV of A$3.2-billion and an internal rate of return of 35%, with LoM free cash flows estimated at A$13.7-billion, and LoM cash operating costs at $2 649/t.

“Downstream processing to deliver battery-grade products is the portion of the global lithium-ion battery supply chain which generally sees a huge value uplift,” said Liontown MD David Richards.

“As a second-generation lithium/tantalum developer, we believe we have a unique opportunity to explore this scenario at Kathleen Valley, given the scale, grade and quality of our project and its location proximal to infrastructure, key logistics and supply chains in the North-Eastern Goldfields of Western Australia.

“The integrated project examined in the downstream scoping study builds on the extremely robust financial outcomes of the recent PFS and clearly shows the substantial financial and economic returns that would be generated by developing an integrated project.”

Richards noted that Liontown’s primary objective was now to press ahead with a planned definitive feasibility study, including further engineering and testwork associated with developing an integrated project at Kathleen Valley.

“We are delighted with the initial results of the downstream scoping study and intend to continue to vigorously pursue ongoing engineering, marketing and funding efforts to bring Kathleen Valley into production,” he added.

Subject to funding and board approval, ongoing metallurgical and process engineering work will continue in the second quarter of the 2021 financial year.