Making savings: Ioneer can now cheaply process lithium and boron resources at its world-class Rhyolite Ridge development
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Leach test results have confirmed that Ioneer’s Rhyolite Ridge project has the potential to quadruple US lithium production by 2026 whilst having enough resources to power over 50 million electric vehicles.
The Rhyolite Ridge project in Nevada is a rare beast indeed, being not just the only known lithium-boron deposit in North America but also just one of only two known such deposits in the world.
Ioneer’s (ASX:INR) 2020 Definitive Feasibility Study outlined Rhyolite Ridge as a low-cost lithium producer capable of producing 22,000tpa of lithium carbonate equivalent (LCE) and 174,400tpa of boric acid for an initial 26 years.
All-in sustaining cash cost to produce battery grade lithium hydroxide was estimated at US$2,510 per tonne.
Highlighting the attractiveness of Rhyolite Ridge, the company then entered into an agreement in September 2021 with $7.5bn global miner Sibanye-Stillwater for the establishment of an equal joint venture over the project.
Under the JV agreement, Sibanye-Stillwater will contribute US$490m for a 50% interest in the project while Ioneer will maintain the remaining 50% and retain operational management responsibility.
In January 2023, the company also received a conditional commitment from the US Department of Energy Loan Programs Office for up to $700 million of debt financing.
Offtake agreements have also been reached with Ford Motor Company and PPES (joint venture between Toyota and Panasonic) in 2022 and Korea’s EcoPro Innovation in 2021.
In April this year, the company upgraded contained resources at the project to 3.4Mt of lithium carbonate equivalent and 14.1Mt of boric acid equivalent – an increase of 168% and 18% respectively over the previous estimate from April 2020.
There is also a high degree of certainty in this resource as about 80% is classified under the higher confidence Measured and Indicated categories that can be used for mine planning.
Recent leach tests conducted on low-boron, low-clay (Type 3) mineralisation at the project, which are currently excluded from project economics, returned results that far exceeded expectations.
The testing returned leach recoveries of 89-94% coupled with free draining characteristics, confirming that both Type 3 and North Basin mineralisation are candidates for heap or vat leaching methods similar to those that will be used for processing Type 1 mineralisation that has high lithium and boron content.
Importantly for Ioneer, this could deliver considerable scale improvements to the project as 79% of the 360Mt resource can now be processed using heap or vat leaching, a considerable improvement to the DFS, which had only considered Type 1 mineralisation in the development plan and economic analysis.
Vat and leach processing is attractive as it offers a reduction in processing cost, water requirements and energy consumption together with dewatering and storage advantages for the leached ore over the agitation tank leach method.
This is also well timed as a recent S&P Global study flagged that the US Inflation Reduction Act had resulted in a 15% increase in its 2035 lithium demand forecast.
“Rhyolite Ridge is one of a limited number of lithium projects in the US expected to begin production this decade,” Ioneer managing director Bernard Rowe said.
“These results further reinforce Rhyolite Ridge’s unique minerology and our ability to deliver these urgently needed battery materials within the existing footprint of our proposed mine site.
“We look forward to completing the important federal permitting process, delivering these critical and valuable materials, and strengthening domestic EV supply chains.”
Stage 1 construction at Rhyolite Ridge is largely funded through the combination of conditional commitments from Sibanye-Stillwater and the debt offered by the Loan Programs Office.
Construction is set to begin in 2024 with lithium production expected to follow in 2026.
This article was developed in collaboration with Ioneer, 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.