Piedmont Lithium Inc (ASX:PLL, NASDAQ:PLL, XETRA:) has completed a Bankable Feasibility Study (BFS) for its 100%-owned proposed integrated lithium hydroxide business in Gaston County, North Carolina, which confirms that the project could be one of the world’s largest and lowest-cost producers of lithium hydroxide.
The project will have a sustainability footprint that is superior to incumbent producers, all in a highly favorable location to supply the rapidly growing electric vehicle supply chain in the US.
The company is in active project financing talks, 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.
Detailed engineering for the project will commence shortly with the target for a final investment decision in 2022.
Uniquely positioned
Piedmont’s Carolina Lithium Project is uniquely positioned to benefit from its highly favorable location, with exceptional infrastructure, a deep local talent pool, low-cost energy, and proximity to local markets for the monetization of by-product industrial minerals.
The BFS reflects more conservative costing assumptions than prior studies, with recent inflationary pressures having a substantial impact on both capital expenditures and operating costs.
These cost impacts are partially offset using lithium pricing assumptions based on the more positive outlook incorporated in the consensus estimates.
Priority for 2022
Piedmont Lithium president and chief executive officer Keith D Phillips said: “We will soon commence detailed engineering for the project with a view to a final investment decision in 2022.
“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.”
BFS details
The BFS prioritizes the production of the company’s newly defined probable ore reserves.
Following exhaustion of the company’s ore reserves, chemical plant feed is assumed to be supplemented with ore obtained via the company’s equity-backed offtake agreements or other spodumene concentrate purchased from the market.
A production target outlined in the BFS is limited to the company’s probable ore reserves.
The BFS emphasizes an initial production target of 11 years of spodumene concentrate to be processed at the chemical plant, which will be adjacent to mining operations.
The BFS incorporates assumptions of additional lithium hydroxide production sourced from equity-backed offtake agreements, which allow the company to secure spodumene from alternate sources, increasing the chemical plant life to 30 years.
US market
The current year has been transformative for electrification in the US, with the current and forecasted battery manufacturing capacity now exceeding 500 GWh.
More than US$25 billion in capital investments are to occur by 2025.
Based on an average requirement of 960 tonnes of lithium hydroxide per GWh of manufacturing capacity, the US demand for lithium hydroxide could exceed 460,0000 tonnes per year by 2027, dramatically exceeding the current development plans of domestic lithium companies.
Superior international sustainability profile
Carolina Lithium is expected to have a superior sustainability profile relative to current lithium hydroxide producers in China and South America.
Chinese lithium producers are highly reliant on coal-fired power and generally use a carbon-intensive sulfuric acid roasting process to convert raw materials shipped in from Australia, while South American producers tend to utilize vast tracts of land and large quantities of water, all in the driest desert in the world, the Atacama.
Fully integrated manufacturing campus
Carolina Lithium contemplates a single, integrated site, comprising quarrying, spodumene concentration, by-products processing and spodumene conversion to lithium hydroxide.
There are currently no such integrated sites operating anywhere in the world and the economic and environmental advantages of this strategy are compelling:
➢ Premier location in Gaston County, North Carolina – 'the cradle of the lithium business'.
➢ Integrated site eliminates unnecessary SC6 transportation costs and truck movements.
➢ Electric powered conveyors eliminate mine trucks, reduce noise, dust and diesel-based carbon dioxide emissions.
➢ On-site solar complex to power concentrate operations.
➢ Potential to co-locate downstream battery materials, lithium-ion battery manufacturing, and by-product customers.
➢ Creation of up to 500 permanent manufacturing, engineering, and management jobs (Phase 1).
Upside potential
Piedmont Lithium has been transformed from a single project company to a multi-jurisdictional business with access to spodumene concentrate from multiple sources.
It holds a 25% equity interest in Sayona Quebec and North American Lithium along with a 50% offtake right to spodumene concentrate produced by Sayona Quebec on a life-of-mine basis.
Additionally, Piedmont Lithium has an earn-in right to acquire a 50% interest in Atlantic Lithium’s Ghanaian project portfolio including the Ewoyaa Project.
Along with this equity earn-in right, Piedmont holds a 50% offtake right to spodumene concentrate produced by Atlantic Lithium on a life-of-mine basis.
Offtake rights provide Piedmont Lithium the flexibility to extend the operational life of Carolina Lithium or to increase lithium hydroxide production capacity through construction of a Phase 2 Lithium Hydroxide conversion plant.
The company expects to publish additional technical studies in 2022 evaluating potential expansion cases for Phase 2 Lithium Hydroxide operations.