The Lithium Universe Ltd (ASX:LU7, OTC:ESMAF) board and CEO recently travelled to China to meet with various Chinese lithium producers as the company works to develop its Québec Lithium Processing Hub (QLPH) strategy.
This trip saw executive chairman Iggy Tan, board directors Patrick Scallan and Dr Jingyuan Liu, alongside CEO Alex Hanly, visit existing lithium refineries to gather direct feedback from industry executives, validate Lithium Universe’s process design, reaffirm construction philosophy and assess market-induced strategic expansions.
The group undertook inspections at various lithium refinery facilities in the Shangdong, Hubei and Sichuan provinces.
News of the visit comes a day after Lithium Universe announced it has raised more than $3.6 million in a capital raising to sophisticated investors to further support development of the QLPH strategy.
Lithium market poised to recover
Discussions with lithium conversion executives highlighted the current market conditions and sustainability concerns.
The consensus among industry players suggests that current market pricing represents the likely breakeven point for the production of battery-grade lithium hydroxide and carbonate. This reaffirmed Lithium Universe’s commitment to navigating lithium market dynamics and solidifying its pivotal role within the growing lithium supply chain in North America.
In anticipation of a strengthening lithium market, each of the Chinese lithium producers presented various strategic expansion plans within China and Asia. Most notably, the lithium producers that the company met with were expanding or modifying existing plants to be able to produce battery-grade lithium carbonate, as opposed to expansion into lithium hydroxide.
The significant increase in demand for lithium carbonate in China is due to the popularity of lithium iron phosphate (LFP) batteries. Lithium carbonate is the feedstock for LFP batteries, whilst lithium hydroxide is used in the higher nickel, cobalt (NMC, LCO) type of batteries.
Essential and extremely valuable discussions
Lithium Universe chairman Iggy Tan said: "The discussions had with various Chinese converters were essential and extremely valuable to the company’s understanding of the existing global conversion environment.
“The company has multiple points of difference that were validated on this excursion, including proven technology, demonstrated development experience, focus on lithium carbonate, and access to convert within the North American battery supply chain."