Neometals Ltd (ASX: NMT) has commenced a Feasibility Study (FS) within its lithium refining collaboration with Indian company, Manikaran Power Limited.
The FS will evaluate a lithium hydroxide refinery located in India with a nameplate capacity of a nominal 20,000 tonnes per annum of lithium hydroxide (LiOH).
Neometals Managing Director Chris Reed said an originally planned lithium carbonate co-product stream has been eliminated, offering scope for significant economies of scale from the expanded output and overall capital efficiency gains arising from a simplified flowsheet and process plant.
The companies have appointed Primero Group manage the engineering study and key vendor package integration, supported by Sichuan Calciner Technologies (SCT) to design and estimate the pyrometallurgical process package and Veolia HPD to design and estimate the hydrometallurgical process package.
SCT will also conduct calcine testing on the spodumene concentrate feed from the Mt Marion project in Western Australia, noting that Mt Marion concentrates have been successfully calcined in China for more than three years by Ganfeng Lithium.
In mid-2019, Neometals entered-into a binding memorandum of understanding (MOU) with Manikaran to jointly fund evaluation towards developing the first lithium refinery in India.
Evaluation activities include, amongst other things, feasibility studies, contractor/equipment provider reviews and site selection. Evaluation activity outcomes will support staged investment decisions to progress towards a 50:50 joint venture to develop the Lithium Refinery.
Mr Reed said the commencement of the FS is significant as it represents a commitment from both parties to advance the evaluation to a higher level of accuracy and detail and to jointly fund costs associated with the FS (Neometals contribution to the FS out to 31 March 2021 is estimated to be A$2 million).
The decision to increase the capacity of the Lithium Refinery and simplify the product mix is in response to feedback from potential offtake customers. Advancement to FS supports Manikaran’s conviction to refine lithium chemicals in India and to do so in a manner that is capital efficient and adequately meets growing forecast domestic demand. The immediate next steps will see the various parties contributing towards this Class 3 study, which includes further vendor test-work, engineering and the development of capital and operating cost estimates.
Our conviction in the long-term opportunity for lithium, and indeed for a suite of other lithium battery raw materials, remains very strong,” Mr Reed said.
“The Lithium Refinery supports Neometals’ desire to derive value from its life-of-mine spodumene offtake option at Mt Marion by moving downstream to capture higher value and margins from lithium chemical products.
“In short, the Lithium Refinery represents a strategic low-cost option to produce the key ingredient in the EV battery, timed to deliver into a strong supply shortage mid-decade.
“Given recent global economic events, the importance of nationalised supply chains is more evident than ever. This is particularly relevant for India with its government target of achieving 100% electric vehicle sales by 2030, despite presently having no domestic lithium chemical production to supply significant planned domestic cathode and LIB cell production capacity.”
