Trail-blazing lithium chemical company Lepidico is testing a new process which could result in battery-grade lithium hydroxide.

The stock was up almost 16 per cent to 2.2c in morning trade.

Lepidico (ASX:LPD) is finding ways to produces battery-grade lithium from lower grade, higher impurity ore sources.

It’s building a $3 million 15kg per hour, Perth-based pilot plant — or demonstration facility –  to show off this tech to potential sales and finance partners.

Lepidico is then hoping to build a larger Phase 1 processing plant  in Canada.

The company has exclusive rights over this new process, called LOH-Max, which was developed by Perth-based Strategic Metallurgy.

LOH-Max can be integrated into a process to make lithium hydroxide – which attracts a premium price – from all hard rock lithium mines.

Lepidico reckons this can be done using conventional industrial equipment and without producing unwanted by-products.

It’s also cheaper; Lepidico says the process will reduce both construction costs – more than $US10 million for 5000 tonnes per annum of lithium hydroxide – and operating costs.

The Lepidico share price over the past 12 months.

Lepidico will fund the development of the technology itself in exchange for exclusive rights to market it globally. A provisional patent application for this process was recently filed with the Australia Patent Office, the company says.

The final process stages of Lepidico’s Pilot Plant development are being adapted to include a LOH-Max circuit, but this won’t delay the project’s commissioning in April this year.