Highlights
The Lithium Universe Technique
– Constructive, sturdy Becancour Refinery PFS even in low pricing setting
– LU7 has a counter cyclical technique – develop challenge, prepared for worth restoration
– Closing the Lithium Conversion Hole – progress 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 primarily based on;
– Value 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 value estimate of US$494 million
– Anticipated annual income of approx US$383 million and EBITDA of round US$147 million
– Undertaking break even at round US$780 /t (SC6) and round US$14,000 per tonne LC
The Design
– LU7 provides 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 type plant fairly than giant difficult-to-operate services
– Preliminary give attention to lithium carbonate manufacturing – feed for LFP batteries
– Assumptions primarily based on actual working knowledge and expertise – not new aspirant
The Location
– Quebec superb trans-Atlantic lithium conversion centre, corresponding to China
– Feedstock from Canada, Brazil and Africa – finish market North America
– Crucial value advantages – low cost inexperienced energy, transport mine/finish market financial savings, US/Canada tariffs
– 95% GHG emission discount with Hydro Quebec’s inexperienced vitality
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 challenge’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 Inside 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 imagine they’ve an inexpensive foundation for utilizing the assumed worth within the examine 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 challenge 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 value for the challenge is estimated at US$494 million, which features a contingency of US$68 million. The capital value estimate is predicated on superior design specs from the Jiangsu Lithium Refinery mannequin, making certain sturdy monetary planning and projection. These components spotlight the challenge’s sturdy monetary viability, even beneath conservative pricing situations.
MANAGEMENT COMMENT
Lithium Universe Chairman, Iggy Tan stated “The profitable completion of our Preliminary Feasibility Research is a major milestone for the corporate, particularly provided 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 collected 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 progress because the market rebounds. We’re devoted to funding and developing 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 sturdy NPV and returns for the challenge point out an economically viable challenge. We shall be seeking to safe strategic companions on the challenge degree to assist fund the challenge. There’s vital curiosity from OEMs with spodumene offtake provide looking for conversion exterior 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 pacesetter 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 centered 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 sturdy long-term demand for lithium, pushed by the rising electrical car (EV) and vitality 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 challenge growth. With falling and depressed costs, much less viable tasks and weaker gamers have been cleared out of the market, leaving house for extra sturdy and well-prepared firms. By advancing its Becancour Lithium Carbonate Refinery throughout this downturn, LU7 goals to be prepared for a worth restoration and capitalize on future progress, making certain its plac within the evolving lithium market.
Over the previous 4 years, lithium costs have skilled vital fluctuations because of the increasing electrical car (EV) market and elevated demand for vitality 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 vitality. 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 because of new mining and refining tasks. Though current oversupply has led to cost declines, long-term demand for lithium stays sturdy, necessitating continued funding in mining and refining.
The lithium market is at present present process a rebalancing part because of oversupply and strategic manufacturing shutdowns by main producers. Firms and operations equivalent to Core Lithium, Greenbushes JV, Mineral Sources, Albemarle’s Kemerton and extra just 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 sturdy, notably from rising EV gross sales in China. LU7 believes that costs are anticipated to get better to extra sustainable ranges over the subsequent 12-18 months, though not reaching the unsustainable peaks of 2021-2022. This market rebalancing is crucial for the sustainability of future lithium tasks and the general market. LU7’s counter-cyclical technique means creating a challenge throughout market downturns to learn when the market recovers.
CLOSING THE LITHIUM CONVERSION GAP
At present, over 90% of world 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 centered on enhancing charging pace and vitality density. LG Power Options is investing $5.6 billion in Arizona to supply LFPs for vitality storage techniques and EVs.
By 2028, North America is anticipated so as to add almost 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 progress. Canada can also 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 each year shall be required to fulfill demand in North America by 2028.
*To view the complete particulars of the announcement, please go to:
https://abnnewswire.web/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 staff has a confirmed observe report of fast-tracking lithium tasks, demonstrated by the profitable growth of the Mt Cattlin spodumene challenge for Galaxy Sources Restricted.
As a substitute of exploring for the sake of exploration, Lithium Universe‘s mission is to rapidly receive a useful resource and assemble a spodumene-producing mine in Quebec, Canada. In contrast to many different Lithium exploration firms, Lithium Universe possesses the important experience and abilities to develop and assemble worthwhile tasks.
Supply:
Lithium Universe Ltd
