Anson Resources Ltd (ASX:ASN) is working towards a major expansion in planned lithium production capacity of its core asset, the Paradox Lithium Project in Utah, USA, now targeting 10,000 tonnes annually of battery-grade lithium carbonate.
A detailed feasibility study (DFS) will target the new stage 1 production capacity, representing a 275% increase from the 2,674 tonnes published in an updated preliminary economic assessment (PEA) in September 2021.
Driven by three factors
This decision is driven by three factors:
- Anticipated significant JORC resource increase at the Paradox Project;
- Growing lithium demand and higher lithium prices; and
- Enhanced lithium recoveries and superior performance of Anson’s 99.95% purity lithium carbonate.
Bromine production capacity at the project will be added progressively, to align with forecast substantial demand growth for zinc-bromine batteries for renewable energy storage and other bromine derivative products.
Project’s unique attributes
Substantial developments in the lithium market, combined with the unique attributes of the Paradox Project have allowed Anson to pursue the major expansion.
This strategic expansion will be incorporated into the DFS, which is being undertaken by global engineering firm, Worley.
Anson’s executive chairman Bruce Richardson stated: “The decision to increase our proposed Stage 1 lithium carbonate production capacity to 10,000 tonnes per annum will enable Anson’s shareholders to take advantage of the burgeoning lithium market and realise more value from of the immense potential of the Paradox Lithium Project.
"The US location of the project means Anson is strategically well-placed to benefit from increasing commitments by US car manufacturers towards electric vehicles and announced investments in developing US-based battery manufacturing facilities."
Increases in price and demand
This major expansion in planned production capacity is driven by:
1. Anticipated JORC resource upgrade and increase to be delivered from an ongoing Resource Expansion Program and increased project area;
2. Higher lithium recoveries achieved from Anson’s Direct Lithium Extraction (DLE) test-work; 91.5% recoveries against previously estimated 80%;
3. In excess of 1,000% increase in the lithium carbonate price over the past 24 months driven by forecast demand growth, stemming from the global electric vehicle revolution (see below);
Lithium carbonate price chart versus forecast increase electric vehicle sales.
4. Rapid expansion in private sector investment in lithium-ion battery manufacturing facilities in the US (see below) and increased offtake activity for sustainably produced lithium carbonate;
Pipeline of US Giga factories relative to the Paradox Lithium Project.
5. The superior performance of Anson’s 99.95% purity lithium carbonate relative to commercially available battery-grade lithium carbonate in lithium-ion battery cells, indicating a longer battery lifespan;
6. The designation by the US Government of lithium as a critical mineral, with domestic production being in the national interest; and
7. The allocation of approximately US$20 billion in low interest loans by the US Government to support the transition from fossil fuels to an alternative energy economy, including the development of a domestic lithium supply chain.
Bromine production plan
Anson will also progressively add bromine production capacity at the Paradox Project aligned with market/customer requirements.
The US and global markets are experiencing a major increase in demand for zinc-bromine batteries, to support electricity networks and renewable energy storage, and other bromine derivative products.
This includes calcium-bromide (CaBr) and sodium-bromide (NaBr), which are used in multiple industrial applications.
"We are also excited by the enormous potential that exists in the development of zinc-bromine batteries to support electricity networks and provide power storage," Richardson said.
"We are fortunate to have a massive bromine endowment that we can bring into production progressively to match customer demand for zinc-bromine batteries and other bromine derivative products.”
Progress towards FID
Anson is making strong progress toward a final investment decision (FID) on the Paradox Project, with the DFS well advanced and multiple resource upgrade and expansion workstreams progressing.
The DFS will reflect the updated lithium development strategy.