Monsters of Rock: Allkem sets up third production centre with feasibility study on Canada’s James Bay project
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Allkem (ASX:AKE) says it will cost US$286 million to bring a third lithium production centre online at its James Bay project in Canada.
The company released the results of a feasibility study today on James Bay, a proposed hard rock lithium mine which would produce 321,000t of 5.6% spodumene a year for 19 years for the EV and battery industry, with an ore reserve of 37.2Mt at 1.3% lithium oxide.
Allkem, formed from the merger of Orocobre and Galaxy Resources this year, already operates the Olaroz brine lithium carbonate mine in South America and the Mt Cattlin hard rock lithium mine in Australia.
At operating costs of US$333/t, Allkem says James Bay would take 2.4 years to pay back with a pre-tax NPV of US$1.42 billion and IRR of 45.8%.
Post tax that would become US$823 million and 35.2%, 2.5x higher than the NPV in a preliminary economic assessment released in March.
A final investment decision on the Quebec mine, which would further solidify Allkem’s status as one of the largest lithium raw materials producers in the world, is due in the June quarter of 2022, with construction due to begin in Q3 2022 and commissioning in the first quarter of 2024.
“The Feasibility Study results clearly demonstrate the exceptional value that will be generated for all stakeholders through the development of this project,” Allkem boss Martin Perez de Solay said. “It will utilise clean hydro-power to provide lithium into the EV and other low carbon industries.”
“Supply chain and logistics emissions can be minimised by supplying into the rapidly expanding markets in North America and Europe.”
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