Junior explorer Lithium Australia is buying a lithium and tin project in Germany to be close to European lithium ion battery producers.

The company is adding the Sadisdorf lithium and tin project, which has an existing 25-million tonne resource in the region.

Asia has typically been the world leader in lithium ion battery production, but that’s set to change, according to Lithium Australia.

Right now Europe has only one factory — located in the UK — making lithium-ion cells for electric car batteries.

But China’s BYD recently announced plans to build a battery factory in Europe while Northvolt, together with Siemens and Scania, is investing €4 billion ($7 billion) to do the same.

Contemporary Amperex Technology Co, Samsung SDI, and LG Chem are also establishing European production capacity and SK Innovations is building a factory in Hungary.

Lithium Australia (ASX:LIT) shares over the past year.
Lithium Australia (ASX:LIT) shares over the past year.

Lithium Australia says the planned capacity in Europe will dwarf the much-publicised Tesla Gigafactory, and Europe may well become the highest concentration of energy metal consumption outside China.

The lithium at the Sadisdorf project is hosted within lithium micas – the preferred feed for Lithium Australia’s trademarked SiLeach process.

The process is designed to convert all lithium silicates to lithium chemicals, from which advanced components for the battery industry can be created.

“Acquisition of Sadisdorf is a key component of our European energy metal supply strategy,” managing director Adrian Griffin said.

“SiLeach is the only practical means of realizing the full potential of deposits of this type where value can be recovered from the lithium, tin, potassium and other valuable by-products.”