- Vertically integrated developer Lithium Universe sent its team to China to see existing lithium refineries up close
- LU7 is developing the Québec Lithium Processing Hub; there are currently no LCE convertors in North America
- The company estimates 850,000t of LCE per annum required to satisfy demand in North America
Special report: In anticipation of a strengthening lithium market, LU7 board members visited various Chinese lithium producers as it looks to build a project which can thrive through the cycle.
Lithium Universe (ASX:LU7) is aiming to bridge a gap in North America’s battery supply chain by developing its Québec Lithium Processing Hub (QLPH), an independent 1Mtpa concentrator and 16,000tpa battery-grade lithium carbonate refinery.
There are lots of explorers, and even some miners, but currently no operational lithium spodumene to LCE convertors in North America.
To address this, LU7 has secured prime industrial land in Bécancour, just south of Trois-Rivières between Montreal and Québec City to build a proposed lithium carbonate refinery.
Lithium carbonate is the feedstock for LFP batteries, whilst lithium hydroxide is used in the higher nickel, cobalt (NMC, LCO) type of batteries.
LFP batteries a dominant force in China’s energy landscape
LFP batteries are increasingly used in EV applications due to their lower costs, longer shelf life and superior stability compared with lithium hydroxide.
These batteries currently reign supreme in China’s domestic EV market, accounting for over 67% of installations in 2023.
With its cathode material reliant on lithium carbonate and iron phosphate, LFP is also well suited to large-scale energy storage applications.
As more Chinese consumers choose LFP batteries, this may be a key indicator of a consumer demand preference shift, LU7 says.
The company estimates that 850,000t of LCE per annum will be required to satisfy demand in North America.
Currently, there are no operational converters in North America and the Company estimates approximately only 100,000t of planned hard rock converters are slated for construction in that part of the world.
Current pricing suggests ‘breakeven point’
A recent trip to operating refineries in China, led by LU7 executive chairman Iggy Tan, proved successful as the company gathered feedback from industry executives on its process design.
Inspections were undertaken at various lithium refinery facilities in the provinces of Shangdong, Hubei and Sichuan.
The company plans to replicate the design and operational methodologies implemented at Jiangsu in North America, the lithium carbonate refinery built by Iggy Tan, Dr Jingyuan Liu, and John Loxton for Galaxy Resources.
LU7 says the consensus among industry players suggests that current market pricing represents the likely breakeven point to produce battery-grade lithium hydroxide and carbonate.
“This reaffirms Lithium Universe’s commitment to navigating through lithium market dynamics and solidifying our pivotal role within the growing lithium supply chain in North America,” the company says.
‘Multiple points of difference’
“The discussions had with various Chinese converters were essential and extremely valuable to the company’s understanding of the existing global conversion environment,” LU7 chairman Iggy Tan says.
“Lithium Universe has multiple points of difference that were validated on this excursion, including proven technology, demonstrated development experience, focus on lithium carbonate, and access to convert within the North American battery supply chain.”
This article was developed in collaboration with Lithium Universe, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.