ioneer saves US$60m with key contract award for Rhyolite Ridge sulphuric acid plant
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Special Report: Emerging lithium-boron producer ioneer is steaming ahead with the engineering for its low-cost Rhyolite Ridge Project in Nevada — and potentially saving millions at the same time.
ioneer (ASX:INR) has contracted leading engineering firm SNC-Lavalin Group to design and eventually build its sulphuric acid plant for the project following a comprehensive bidding process.
SNC-Lavalin will incorporate MECS best-in-class sulphuric acid production technology from DuPont Clean Technologies.
Importantly, the contract with SNC-Lavalin reduces the capex estimate for the sulphuric acid plant construction by about $US60m ($84.2m).
And what’s really nifty about the sulphuric acid plant is that it generates its own heat, steam and power.
This means not only does the cost of building it come in $60m lower than what was estimated in the pre-feasibility study (PFS), but it also eliminates the need for ioneer to source power from the grid.
“In fact, we’ll end up with quite a lot of surplus power that we could sell into the grid,” managing director Bernard Rowe said.
“The cost of the sulphuric acid plant is a key capex driver for the Rhyolite Ridge Project and the saving of approximately $US60m is significant and materially improves the already robust project economics demonstrated through the PFS.”
The acid plant will produce 3500 tonnes per day of sulphuric acid for the leach process and the steam/heat necessary for the process plant.
Excess steam will be used to generate about 50 megawatts each year of CO2-free electricity.
Mr Rowe told Stockhead the reason the cost came in so much lower was because the tender process was more than just completing the work for the Definitive Feasibility Study or DFS.
“We had bids from a number of suppliers of sulphuric acid plants, but they’re not just bidding on the job of completing the acid plant part of the DFS, they’ve actually bid for the design and ultimately the supply of the plant,” he said.
“They’re obviously going to be far more competitive in their pricing, because if they’re not then they won’t win the job.”
And ioneer thinks there are still more cost savings to be made.
The sulphuric acid plant was one of a series of trade-off studies undertaken by ioneer to identify possible further capex cost savings.
Mr Rowe said other trade-off studies had been done on the processing plant and the generation of electricity.
“We’re not too far away from having another update on the results of some of the other trade-off studies,” he said.
At full capacity the Rhyolite Ridge mine will produce 20,000 tonnes of lithium carbonate and ioneer’s goal is to be in production by mid-2021.
The junior has landed five members of Rio Tinto’s highly-skilled sales and marketing team, has one of the projected lowest cost lithium projects in the world and that project is in the very mining jurisdiction that Canadian public policy think tank Fraser Institute just ranked number one.