PERTH (miningweekly.com) – A preliminary economic assessment (PEA) by dual-listed Piedmont Lithium into a proposed merchant lithium hydroxide plant to expand its US manufacturing capacity to 60 000 t/y of lithium hydroxide, has demonstrated positive economics.
Piedmont on Thursday told shareholders that the results of the PEA demonstrated the potential for the company to expand its lithium hydroxide manufacturing business using spodumene concentrate from market sources, including existing offtake agreements with Sayona Quebec and Atlantic Lithium.
The PEA estimated that the new lithium hydroxide plant would have a 30-year operational life, similar to Piedmont’s current Carolina lithium operation, and would produce 30 000 t/y of lithium hydroxide for an initial capital cost of $572-million.
The project is estimated to have an after-tax net present value of $2.24-billion and an internal rate of return of 33%, with average annual steady-state earnings before interest, taxes, depreciation and amortisation of $346-million.
“We are very pleased with the results of the PEA for our second planned US lithium hydroxide plant. The project’s economics are outstanding using a fixed price deck that is at a 66% discount to prevailing spot prices,” said Piedmont CEO and president Keith Phillips.
“With many analysts projecting lithium shortages to grow into the 2030s, the project offers substantial leverage relative to possible higher lithium prices.
“We aspire to be America’s leading producer of lithium hydroxide, and at 60 000 t/y, Piedmont’s planned capacity would be approximately quadruple the entire domestic installed base today, positioning us to be a critical supplier to the US supply chain.
“With long-term supply agreements in place with our partners Atlantic Lithium and Sayona Mining, we have locked in the raw material we require for this expansion, enabling us to control our own destiny while capturing the economics of the integrated production process,” said Phillips.
He said that the company’s focus for 2022 would turn to execution, with four major projects currently under development.
“Along with our partners, we are targeting first spodumene concentrate production at North American Lithium in 2023 and at the Ewoyaa project, in Ghana in 2024. US lithium hydroxide production will follow, with our integrated Carolina lithium project and the second lithium hydroxide plant to be advanced on the earliest practical timeline.
“Lithium markets are strong, and we are fortunate to possess a strong project pipeline to capitalise on the generational opportunity presented by the electrification of the vehicle business.”
Piedmont will now look to finalise a site selection for the new proposed plant, and would undertake further technical studies, while also submitting a second loan application to the Department of Energy’s Loan Programme Office under the Advanced Technology Vehicle Manufacturing programme.