Piedmont Lithium Inc has released the results of its preliminary economic assessment (PEA) for a proposed merchant lithium hydroxide plant to increase Piedmont’s planned US manufacturing capacity to 60,000 tonnes per year.
These results demonstrate the potential for the company to expand its lithium hydroxide manufacturing business at the LHP-2 Project, using spodumene concentrate from market sources, including under existing offtake agreements with Sayona Quebec and Atlantic Lithium Ltd.
Growth of electrified vehicle market
The company plans to capitalise on the growth of the electrified vehicle market in the US.
“Current and forecasted battery manufacturing capacity now exceeds 500 gigawatt hours, with public announcements of over $25 billion in capital investments to occur by 2025,” said president and CEO Keith Phillips.
“The potential lithium volume these battery plants will require reinforces the importance of developing a domestic lithium supply chain and solidifies our decision to aggressively evaluate and pursue expansion opportunities for a second lithium hydroxide plant.”
Outstanding project economics
“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 Phillips.
The company is encouraged by projections suggesting lithium shortages will grow into the 2030s, and believes the project offers significant leverage relative to possible higher lithium prices.
Piedmont aspires to be America’s leading producer of lithium hydroxide, and at 60,000 tonnes per year, the plant’s planned capacity would be around quadruple the entire domestic installed base today, which positions the company to be a critical supplier to the US supply chain.
Offtake agreements in place
Long-term supply agreements are in place with partners Atlantic Lithium and Sayona Mining, meaning that Piedmont has now locked in the raw material required for expansion and can capture the economics of an integrated production process.
The focus for the remainder of 2022 is on execution, with four major projects under development.
The company is 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 the integrated Carolina Lithium Project and LHP-2 Project to be advanced according to ‘earliest practical timelines’.
“Lithium markets are strong, and we are fortunate to possess a strong project timeline to capitalise on the generational opportunity presented by the electrification of the vehicle business,” said Phillips.
“With spot prices at approximately triple the fixed pricing assumptions used under the PEA, Piedmont has substantial leverage relative to higher lithium prices across our entire portfolio of projects.”