Highlights
The Lithium Universe Technique
– Constructive, strong Becancour Refinery PFS even in low pricing setting
– LU7 has a counter cyclical technique – develop mission, prepared for worth restoration
– Closing the Lithium Conversion Hole – development in useful resource and finish market tasks
The Monetary Modelling
– Economically viable with glorious pre-tax NPV8% of roughly US$779M
– IRR (pre-tax) of roughly 23.5% and payback of three.5 years based mostly on;
– Worth forecast of US$1,170/t SC6 and US$20,970/t for battery grade Li2CO3
– Present spot worth is approx. US$775/t SC6 and US$10,680/t for battery grade LC
– Working prices at round US$3,976/tonne; capital price estimate of US$494 million
– Anticipated annual income of approx US$383 million and EBITDA of round US$147 million
– Venture break even at round US$780 /t (SC6) and round US$14,000 per tonne LC
The Design
– LU7 presents an answer to worldwide lithium conversion failures and startup issues
– Utilizing confirmed Jiangsu Refinery working know-how and lithium business expertise
– Producing as much as 18,270 tonnes/12 months of inexperienced battery-grade lithium carbonate
– Smaller off-the-shelf model plant relatively than giant difficult-to-operate amenities
– Preliminary concentrate on lithium carbonate manufacturing – feed for LFP batteries
– Assumptions based mostly on actual working information and expertise – not new aspirant
The Location
– Quebec ultimate trans-Atlantic lithium conversion centre, similar to China
– Feedstock from Canada, Brazil and Africa – finish market North America
– Vital price advantages – low-cost inexperienced energy, transport mine/finish market financial savings, US/Canada tariffs
– 95% GHG emission discount with Hydro Quebec’s inexperienced power
Subsequent Steps
– Offtake discussions with OEMs underway
– LU7 continues to progress full Definitive Feasibility Research
The Firm plans to construct a dependable, low-risk lithium conversion refinery with an annual capability of as much as 18,270 tonnes, using confirmed experience from the Jiangsu processing mannequin. The power will produce environmentally pleasant, battery-grade lithium carbonate. The Firm goals to ascertain a Canadianbased lithium chemical substances enterprise, buying spodumene feedstock from each home suppliers and worldwide markets, together with Brazil and Africa and producing a battery grade lithium carbonate product. This aligns with the Firm’s broader imaginative and prescient of contributing to the North Atlantic lithium provide chain and shutting the Lithium Conversion Hole.
The mission’s economics are extremely beneficial, even with conservative worth assumptions. The refinery is economically viable with a pre-tax Web Current Worth (NPV) of roughly US$779 million, utilizing an 8% low cost price, and a pre-tax Inner Price of Return (IRR) of round 23.5%. The payback interval is estimated at 3.5 years. The monetary mannequin is constructed on cautious worth forecasts of US$1,170 per tonne for spodumene focus (SC6) and US$20,970 per tonne for battery-grade lithium carbonate equal (LCE). LU7’s administrators consider they’ve an affordable foundation for utilizing the assumed worth within the research of US$20,970 per tonne for battery grade lithium carbonate. Key operational assumptions embrace 86% plant availability and 88% lithium restoration. At full manufacturing capability, the mission is anticipated to generate roughly US$383 million in annual income, with prices totalling round US$236 million, resulting in an annual EBITDA of roughly US$147 million and a gross margin of within the area of 38%. Submit-tax, the NPV at an 8% low cost price is estimated at roughly US$501 million. The capital price for the mission is estimated at US$494 million, which features a contingency of US$68 million. The capital price estimate relies on superior design specs from the Jiangsu Lithium Refinery mannequin, guaranteeing strong monetary planning and projection. These elements spotlight the mission’s robust monetary viability, even below conservative pricing situations.
MANAGEMENT COMMENT
Lithium Universe Chairman, Iggy Tan mentioned “The profitable completion of our Preliminary Feasibility Research is a major milestone for the corporate, particularly on condition that we solely launched in August of final 12 months. Early on, we acknowledged that bridging the lithium conversion hole in North America, leveraging our gathered lithium experience and the confirmed know-how from Jiangsu, was a transparent and strategic path ahead.”
“Our counter-cyclical technique is centered on advancing tasks throughout market downturns, permitting us to strategically place ourselves for development because the market rebounds. We’re devoted to funding and establishing a confirmed, low-risk lithium conversion refinery in Quebec, marking step one towards establishing Quebec because the lithium conversion hub for the Transatlantic area.”
“The robust NPV and returns for the mission point out an economically viable mission. We will likely be seeking to safe strategic companions on the mission degree to assist fund the mission. There may be important curiosity from OEMs with spodumene offtake provide in search of conversion outdoors of China, and discussions are already underway. We’re assured that the Becancour lithium refinery, with an annual capability of 18,270 tonnes, will emerge as a frontrunner in producing inexperienced, battery-grade lithium carbonate.”
“The Firm will advance rapidly to finish a Definitive Feasibility Research and finalise offtake partnerships”.
COUNTER CYCLICAL STRATEGY
Leveraging expertise with cyclical actions within the lithium market, Lithium Universe makes use of a counter-cyclical technique targeted on creating tasks throughout market downturns to strategically place itself because the market recovers. Though the current oversupply of lithium has resulted in worth declines, the Firm stays assured within the robust long-term demand for lithium, pushed by the rising electrical automobile (EV) and power storage sectors. This ongoing demand underscores the necessity for continued funding in lithium mining and refining tasks. LU7 believes that the present market situations present an optimum window for mission improvement. With falling and depressed costs, much less viable tasks and weaker gamers have been cleared out of the market, leaving area for extra strong and well-prepared corporations. By advancing its Becancour Lithium Carbonate Refinery throughout this downturn, LU7 goals to be prepared for a worth restoration and capitalize on future development, guaranteeing its plac within the evolving lithium market.
Over the previous 4 years, lithium costs have skilled important fluctuations because of the increasing electrical automobile (EV) market and elevated demand for power storage. From 2020 to early 2022, costs surged as provide struggled to maintain tempo with demand pushed by the worldwide shift in the direction of cleaner power. By 2022, lithium carbonate and hydroxide costs had risen over 400%, influenced by COVID-19-related provide disruptions. As of late 2023, costs have begun to stabilize on account of new mining and refining tasks. Though current oversupply has led to cost declines, long-term demand for lithium stays robust, necessitating continued funding in mining and refining.
The lithium market is at the moment present process a rebalancing part on account of oversupply and strategic manufacturing shutdowns by main producers. Firms and operations corresponding to Core Lithium, Greenbushes JV, Mineral Assets, Albemarle’s Kemerton and extra lately, CATL’s Yichun mine and Arcadium’s Mt Cattlin have both slowed manufacturing or halted operations in response to current worth drops. Regardless of these provide changes, demand for lithium stays strong, notably from rising EV gross sales in China. LU7 believes that costs are anticipated to recuperate to extra sustainable ranges over the following 12-18 months, though not reaching the unsustainable peaks of 2021-2022. This market rebalancing is important for the sustainability of future lithium tasks and the general market. LU7’s counter-cyclical technique means creating a mission throughout market downturns to learn when the market recovers.
CLOSING THE LITHIUM CONVERSION GAP
At present, over 90% of worldwide LFP battery manufacturing is concentrated in China, however North America is quickly increasing its capability. Ford plans to construct a $3.5 billion manufacturing unit in Michigan with an annual capability of 35 gigawatt-hours (GWh) by 2026, whereas Tesla is creating a facility in Nevada with a ten GWh capability targeted on enhancing charging velocity and power density. LG Vitality Options is investing $5.6 billion in Arizona to provide LFPs for power storage methods and EVs.
By 2028, North America is anticipated so as to add practically 1,000 GWh of battery manufacturing capability, supporting the manufacturing of 10 to 13 million electrical autos yearly. Key states like Georgia, Kentucky, and Michigan will lead this development. Canada can be investing within the sector, with partnerships from Volkswagen, Stellantis, and others, serving to to safe its place within the world automotive market and meet the rising demand for EVs.
The Firm estimates that 850,000t of LCE every year will likely be required to fulfill demand in North America by 2028.
*To view the complete particulars of the announcement, please go to:
https://abnnewswire.internet/lnk/WY641GJW
About Lithium Universe Ltd:
Lithium Universe Ltd (ASX:LU7) (FRA:KU00) (OTCMKTS:LUVSF), headed by business path blazer, Iggy Tan, and the Lithium Universe group has a confirmed monitor report of fast-tracking lithium tasks, demonstrated by the profitable improvement of the Mt Cattlin spodumene mission for Galaxy Assets Restricted.
As a substitute of exploring for the sake of exploration, Lithium Universe’s mission is to rapidly get hold of a useful resource and assemble a spodumene-producing mine in Quebec, Canada. In contrast to many different Lithium exploration corporations, Lithium Universe possesses the important experience and expertise to develop and assemble worthwhile tasks.
Supply:
Lithium Universe Ltd
