Ground Breakers: More lithium developments to brighten your day as Sayona and PLL complete NAL restart

Sayona and Piedmont Lithium’s US$80mn North American Lithium restart is up and running
Companies will be the only near term spodumene suppliers in Canada when concentrate shipments begin in the September quarter
Rio Tinto drafts in FQM to develop massive Peruvian copper mine

Sayona Mining (ASX:SYA) has completed the US$80 million ($120m) restart of its 226,000tpa North American Lithium operation in Quebec, Canada, moving the $1.8 billion capped miner and its JV partner Piedmont Lithium (ASX:PLL) into the ranks of the ASX’s lithium producers for the first time.

It is the start of what could be an avalanche of Australian miners emerging in North America, viewed as the next major growth region for lithium supply outside the dominant Australian, South American and Chinese markets.

The restart of the previously operating Quebec mine, which collapsed under its old owners during the last lithium downturn, represents the only major source of lithium supply coming online in Canada in the next two years.

In the context of the Inflation Reduction Act and Biden Administration’s push to bring its electric vehicle supply chain closer to home, it is a major development.

“Since announcing our restart intentions in 2021, our project team has maintained a forward looking focus to improve lithium capture, achieve more consistent runtimes, and streamline operating costs from the past-producing operation,” Sayona MD Brett Lynch said.

“Improvements were made as planned in our timeline and budget, and we are eager to see the impact the upgrades bring to both product quality and operational efficiency as we prepare for our first commercial shipments of spodumene concentrate in July of this year.”

The project is owned in a 75-25 JV between Sayona and Piedmont, with Sayona targeting four shipments of up to 120,000t by the end of 2023. They are expected to head to major battery and EV manufacturers, including LG Chem and Tesla.

A PFS is also due this half on the completion of a lithium carbonate plant, which was partially finished by the mine’s previous owners, which could turn Sayona into a Canadian based lithium chemicals producer.

North American market

In the past couple of years there has been an explosion of ASX-listed companies chasing spodumene in Canada and particularly Quebec, home to the James Bay region where ASX 200 giant Allkem (ASX:AKE) is planning to build a major new hard rock lithium mine in the coming years.

Other Australian raiders to have made a move on the country’s massive untapped lithium potential include Ken Brinsden chaired Patriot Battery Metals (ASX:PMT), Winsome Resources (ASX:WR1), Green Technology Metals (ASX:GT1), Battery Age Minerals (ASX:BM8) and Cygnus Metals (ASX:CY5).

PLL president and CEO Keith Phillips, whose firm has US Government backing for a planned lithium hydroxide plant in Tennessee, said NAL’s restart was an exciting milestone not just for Sayona and Piedmont but for the North American market in general.

“NAL is positioned to be a key contributor to the electric vehicle and battery supply chains as demand for lithium continues to rapidly expand along with the electrification economies in both Canada and the US,” he said.

Deliveries to the Port of Quebec City have started, with the first commercial shipments due in the September quarter.

It is the latest in a string of major announcements in the lithium space, which have kept the market frothy despite falling prices in China for downstream battery grade lithium chemicals hydroxide and carbonate.

On Tuesday the battery metals sector surged as investors readied themselves for takeover premiums after Liontown Resources (ASX:LTR) rejected a $2.50 per share bid from Albemarle valuing the emerging lithium producer at around $5.5 billion.

A day later Pilbara Minerals (ASX:PLS) announced it would be splashing $560 million on an expansion that will bring the capacity of its Pilgangoora mine in the Pilbara to more than 1Mtpa by September 2025, with MD Dale Henderson telling Stockhead he remained bullish on the outlook for raw materials, insisting they remained undersupplied given the massive jump in conversion and EV making capacity seen in recent years.

Sayona Mining (ASX:SYA) and Piedmont Lithium (ASX:PLL) share price today:

Rio Tinto and FQM seal deal on Peruvian copper mine

The big miners are falling further in love with copper thanks to its upcoming starring role in the energy transition.

But there aren’t many massive new copper mines to be found.

That is setting the scene for the approval of mines majors have been sitting on for decades, gathering cobwebs in their stairwells.

Rio Tinto (ASX:RIO), which spent billions doubling its share of production at the Oyu Tolgoi mine in Mongolia last year, has now brought First Quantum Minerals, the Canadian owners of the Ravensthorpe nickel mine in WA, on board to develop its long dormant La Granja copper mine in Peru.

At 4.32Bt and a grade of 0.51% copper, the high altitude deposit in Cajamara in North Peru is one of the largest undeveloped copper mines in the world.

Rio picked up the right to develop the mine from the Peruvian Government in 2006. But it is FQM that will take the lead, stumping up US$105m for a 55% stake and promising to spend up to US$546m to sole fund capital and operational costs through the completion of a feasibility study.

Rio would contribute pro-rata once those pre-development commitments are undertaken.

“La Granja is an exciting but complex project that has the potential to be a significant new source of the copper that is needed for the energy transition. We are pleased to enter into this agreement with First Quantum, that will bring our combined development capabilities and deep knowledge of La Granja to progress the project,” Rio copper chief executive Bold Baatar said.

“This partnership underscores not only La Granja’s potential to be a significant copper producer, but Peru’s position as one of the world’s most important mining investment destinations. Developing La Granja would also further strengthen Rio Tinto’s copper portfolio following the acquisition of Turquoise Hill Resources and commencement of underground mining at Oyu Tolgoi in Mongolia.”