Battery metals: Neometals is poised to develop India’s first lithium chemical project
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For Aussie-based hard rock producers, the shift into value-added lithium chemical processing is gathering apace.
Although not technically a producer anymore, cashed-up battery metals play Neometals (ASX:NMT) has made its intentions to produce higher value, higher margin lithium chemicals very clear.
Neometals recently sold its 13.8 per cent stake in the producing Mount Marion lithium mine near Kalgoorlie in Western Australia for $103m.
This means that the company still has about $116m in the bank, which is handy as it progresses a number of projects around the world.
These include a battery recycling plant in Canada, the Barrambie vanadium-titanium project in WA, and now, a lithium chemical plant in India.
The company has just signed a binding memorandum of understanding (MOU) with Indian power company Manikaran to look at developing India’s first lithium refinery.
There is currently no lithium chemical conversion capacity in India. Yet there’s talk the Indian government will start using attractive financial incentives to woo battery makers to set up shop in-country, as part of a 50GW domestic battery manufacturing plan.
Neometals says a lithium refinery feasibility study will take 18-24 months, with a decision on whether to proceed with a potential 50:50 JV likely to be considered in the first half of 2021.
It if does go ahead, Neometals will use its Mt Marion life-of-mine offtake as feed – up to 57,000t per annum of 6 per cent spodumene concentrate – which it retained as part of the sale agreement.
Any extra feed can be sourced from external sources as required.
There’s also the benefit of pairing up with a local energy heavyweight like Manikaran, who could take a lead role in securing finance, a suitable refinery site, regulatory approvals, and Indian government subsidies. Bonus.
Given India’s growth projections for electric vehicle and lithium battery manufacturing capacity, this opportunity to partner in India’s first domestic lithium development is compelling, Neometals boss Chris Reed says.
“Manikaran has significant on-the-ground presence and commercial standing in India to assist with site location, regulations, access to finance, utilities and reagents, and is part of a group of companies with broad competencies that enhance their value proposition as partners,” he says.
This won’t be Neometals’ first rodeo, either.
The company already completed a capital cost study on a proposed 10,000t lithium refinery operation in Kalgoorlie, WA, which wasn’t economic in the current climate.
But the company is certain of the project’s longer-term viability.
It says the medium-to-long term spodumene concentrate supply from existing and emerging mining projects in the Eastern Goldfields will eventually support an even larger 20,000t conversion facility.
Lithium Australia (ASX:LIT) spends $100,000 to increase stake in lithium-ion battery recycler Envirostream to 11.76 per cent. LIT plans to progressively increase its stake to 18.91 per cent. Envirostream will eventually provide LIT with spent cathode powder to be processed into raw materials for the battery industry.