PERTH (miningweekly.com) – The bankable feasibility study (BFS) on the Carolina lithium project, in the US, has confirmed that it could be one of the world’s biggest and lowest cost producers of lithium hydroxide.
ASX- and Nasdaq-listed Piedmont Lithium on Wednesday reported that over its 30-year mine life, the Carolina project would produce 30 000 t/y of lithium hydroxide, for an initial capital investment of $988-million.
The BFS emphasises an initial ore reserves only production target of 11 years of spodumene concentrate to be processed at the company’s chemical plant, which will be located adjacent to mining operations. The BFS incorporates assumptions of additional lithium hydroxide production sourced from offtake agreements which allow the company to secure spodumene from alternate sources, increasing the chemical plant life to 30 years.
Piedmont said on Wednesday that opportunity remains to increase the operational life of Carolina beyond 11 years by conversion of existing mineral resources to ore reserves or by discovery of additional resources within a reasonable trucking or conveying distance to the proposed concentrator.
The project is expected to have an average yearly earnings before interest, tax, depreciation and amortisation of $459-million over the first ten years of the project life, and $346-million over the life of the operations, while after tax cash flows are targeted at $296-million a year in the first ten years, and at $244-million a year over the life of the operation.
The BFS has estimated an after tax net present value of $2.04-billion and an internal rate of return of 27%.
“We will soon commence detailed engineering for the project with a view to a final investment decision in 2022,” said Piedmont president and CEO Keith Phillips.
“We are actively engaged in project financing discussions, including possible debt finance via the US Department of Energy’s Advanced Technology Vehicle Manufacturing loan program, and potential strategic equity investments via the partnering process being coordinated by our financial advisors. An important priority for 2022 will be the evaluation of expansion opportunities incorporating the spodumene concentrate assets we control in Quebec and in Ghana.
“Our ambition is to build America’s largest lithium hydroxide business, and the spodumene resource base we’ve assembled during 2021 should underpin substantial growth,” he added.