Piedmont Lithium Inc (ASX:PLL, NASDAQ:PLL, XETRA:) and partner Sayona Mining Ltd (ASX:SYA) have formally approved the restart of the North American Lithium (NAL) operation in Quebec, Canada, with a budget of about C$98 million (~A$110 million).
NAL is on track for resumption of spodumene concentrate production in the first quarter of 2023, to become the first North American local supplier of lithium concentrates
Piedmont holds a 25% project interest in the North American Lithium and Authier projects in Quebec through an equity stake in Sayona Quebec and an equity interest of 17% in Sayona Mining.
Looking ahead, both parties are evaluating options for downstream processing in Québec, to capture further value in the fast‐growing EV and battery sector.
“Growing demand”
Sayona managing director Brett Lynch said: “We are delighted to put the seal on our plan to launch North America’s first local spodumene concentrate production, amid growing demand from both Canada and the United States for local and sustainable sources of this key battery metal.
“Our team in Québec has hit the ground running since our official takeover of the operation in August 2021.
“Progress to date has been excellent, including the recruitment of experienced operating personnel and the move to secure major items of equipment early before recent cost hikes.
“Importantly, we continue to work closely with both the Québec Government and Piedmont to take the next step of downstream processing.
“This will maximise local value add, delivering increased returns to shareholders, enhancing local employment and investment, and minimising the carbon footprint in supplying North America’s battery industry compared to current imports."
Expedite production restart
Sayona has made significant steps to expedite the production restart, having recruited key personnel, secured critical long-lead equipment items, progressed detailed engineering design work and obtained nearly all required regulatory approvals.
Lynch adds: “All the key players in the North American auto and battery sector are moving to invest in local production in Québec, benefitting from its world‐class infrastructure, skilled labour, proximity to key battery markets and low cost, sustainable hydroelectric power.
"Combined with our emerging northern lithium hub, NAL will ensure Québec is at the centre of lithium carbonate and/or hydroxide production in North America, becoming the axis on which, a successful battery ecosystem can be built.”
“The NAL restart project has been funded through cash contributions by both Sayona and Piedmont, each company having successfully completed significant capital raises in the first half of 2022."
What's next after restart ?
Following the restart of NAL operations, Piedmont's offtake agreement entitles it to purchase the greater of 113,000 tonnes per year of spodumene concentrate or 50% of production from NAL.
Prior to the NAL restart, the agreement provided for the offtake of 60,000 tonnes or 50% of concentrate produced from ore mined at Sayona’s nearby Authier Lithium Project.
This offtake agreement will remain in place until the commencement of operation of a lithium conversion plant in Québec.
Any remaining concentrate not required by the conversion plant will be delivered to Piedmont.