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- ECS co-funded under cooperation agreement with Portugal’s largest chemical producer, Bondalti, to jointly develop a 25,000tpa lithium hydroxide operation in a 50:50 JV;
- ECS estimates indicate a lithium-brine conversion cost of €1,768 per tonne of battery-grade lithium hydroxide;
- Capital cost estimate of €405 million (including 15% contingency) indicates a capital intensity of €16,200 per production tonne.
April 26, 2023 – Emerging, sustainable battery materials producer, Neometals Ltd (ASX: NMT & AIM: NMT) (“Neometals” or “the Company”), is pleased to announce the results of the Engineering Cost Study for a lithium chloride Brine conversion operation using the proprietary ELi™ electrolysis process owned by Reed Advanced Materials Pty Ltd (“RAM”) (70% Neometals, 30% Mineral Resources Ltd). The ECS is based on a plant with a production capacity of 25,000tpa of battery-grade lithium hydroxide monohydrate (“LHM”). ELi™ utilises conventional purification processes and chlor-alkali electrolysis cells.
The ECS was co-funded under a binding Co-operation Agreement (“ELi™ Co-operation”) with Portugal’s largest chemical producer, Bondalti Chemicals S.A. (“Bondalti”). The parties will co-fund pilot trial and evaluation studies to allow consideration of a decision to form a 50:50 incorporated joint venture (“JVCo”). JVCo would look to construct and operate a 25,000tpa lithium refinery at Bondalti’s extensive chlor-alkali operations in Estarreja, Portugal (“Estarreja Lithium Refinery” or “ELR”). We expect the commissioning and commencement of operations for the plant to take place in Q1 2027.
Table 1 – Key Metrics
| ECS Metrics (100% ownership basis) |
Annual Production | 25,000tpa LHM |
Annual Throughput | 80,000 tpa Brine @ 6% Li |
Average Operating Cost (±15%)** | €1,768/t (US$1,945/t) LHM |
Total initial capital costs (±15%)*** | €405M (US$446 M) |
Capital Intensity**** | €16,200/t (US$17,840/t) LHM capacity |
See Table 2 for further information on ECS capital costs, includes direct and indirect costs
* Association for the Advancement of Cost Engineering
** from receipt of 6% Li brine concentrate to packaged high purity “battery grade” lithium hydroxide product, excluding by-product credits
*** Total of direct and indirect capex including 15% contingency, EPC fees and design post-Class 3
**** Based on total capex and 25,000tpa LHM capacity
Neometals Managing Director Chris Reed said:
“Successful completion of the ECS has provided additional confidence in the operating and capital costs of the proposed Estarreja Lithium Refinery. The combination of Bondalti’s operating experience with RAM’s innovative Eli™ process for lithium brine concentrates can deliver a much needed domestic supply of lithium hydroxide in the EU. Furthermore, we are excited about the prospect of marketing a technology that can deliver a potential step-change in operating cost to developers of lithium brine sources. Lithium is the soft underbelly of the energy transition story, it is un-substitutable in EV batteries and the looming supply deficits appear permanent without innovation and government intervention. The US IRA and EU CRM Acts are evidence of the need to address this existential threat to car making in the West.”
The ECS was completed with assistance from leading Australian engineering firm Primero Group (“Primero”). The ECS has been completed to a ±15% level of accuracy to the AACE* Class 3 standard and subjected to internal and external reviews. Capital and Operating cost estimates are denominated in US dollars using an exchange rate of 1 Euro: 1.1 US$.
Neometals, via RAM, is commercialising ELi™ to produce lithium hydroxide from lithium chloride solutions using electrolysis. A feasibility study in 2016 (“Historical FS”) indicated the potential for ELi™ to significantly reduce the operating cost and carbon footprint associated with consumption and transport of carbon-intensive reagents used in conventional lithium refining processes. Neometals is encouraged by the results of the ECS, which confirms the potential for exceptionally low operating costs and competitive capital intensity. The operating cost is consistent with the 2016 Historical FS despite considerable industry cost escalation and the operating cost advantage over the conventional process has been maintained (see Figure 1). The ECS confirms the economic advantages of ELi™and Neometals expects the lifecycle assessment to confirm the low-carbon footprint of the process, which is just one of the associated environmental benefits that ELi™ has been designed to deliver to its users.
Figure 1: Opex comparison showing significantly reduced operating costs to generate LHM when compared to conventional Brine and spodumene routes (noting that conventional Brine processing is a two-stage process with lithium carbonate (“LC”) produced before additional processing into LH
CAUTIONARY STATEMENT
The ECS referred to in this announcement has been undertaken to assess the potential technical feasibility and economic viability of ELR that is required for Neometals to consider investment decisions in relation to ELR. It is based on low-level technical and economic assessments that are not sufficient to provide definitive assurance of an economic development case, or to provide certainty that the conclusions of the ECS will be realised. Finalisation of the FS and further evaluation work will be required before Neometals will be in a position to determine the viability of ELR.
Given the uncertainties involved, all figures, costs, estimates quoted are approximate values and within the margin of error range expressed in the relevant sections throughout this announcement. Investors should not make any investment decisions based solely on the results of the ECS.
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Forward-looking Statements
This release contains “forward-looking information” that is based on the Company’s expectations, estimates and projections as of the date on which the statements were made. This forward-looking information includes, among other things, statements with respect to studies, the Company’s business strategy, plan, development, objectives, performance, outlook, growth, cash flow, projections, targets and expectations. Generally, this forward-looking information can be identified by the use of forward-looking terminology such as ‘outlook’, ‘anticipate’, ‘project’, ‘target’, ‘likely’,’ believe’, ’estimate’, ‘expect’, ’intend’, ’may’, ’would’, ’could’, ’should’, ’scheduled’, ’will’, ’plan’, ’forecast’, ’evolve’ and similar expressions. Persons reading this news release are cautioned that such statements are only predictions, and that the Company’s actual future results or performance may be materially different. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information.
Forward-looking information is developed based on assumptions about such risks, uncertainties and other factors set out herein, including but not limited to general business, economic, competitive, political and social uncertainties; the actual results of current development activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of metals; failure of plant, equipment or processes to operate as anticipated; accident, labour disputes and other risks of the chemical industry; and delays in obtaining governmental approvals or financing or in the completion of development or construction activities. This list is not exhaustive of the factors that may affect our forward-looking information. These and other factors should be considered carefully, and readers should not place undue reliance on such forward-looking information.
Neither the Company, nor any other person, gives any representation, warranty, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statement will actually occur. Except as required by law, and only to the extent so required, none of the Company, its subsidiaries or its or their directors, officers, employees, advisors or agents or any other person shall in any way be liable to any person or body for any loss, claim, demand, damages, costs or expenses of whatever nature arising in any way out of, or in connection with, the information contained in this document. The Company disclaims any intent or obligations to or revise any forward-looking statements whether as a result of new information, estimates, or options, future events or results or otherwise, unless required to do so by law.
Advice
Nothing in this document constitutes investment, legal or other advice. Investors should make their own independent investigation and assessment of the Company and obtain any professional advice required before making any investment decision based on your investment objectives and financial circumstances.
Authorised on behalf of Neometals by Christopher Reed, Managing Director
ENDS
For further information, please contact:
Chris Reed
Managing Director
T +61 8 9322 1182
Jeremy McManus
General Manager, Commercial and IR
T +61 8 9322 1182
About Neometals
Neometals is an emerging, sustainable battery materials producer. The Company has developed a suite of green battery materials processing technologies that reduce reliance on traditional mining and processing and support circular economic principles.
Neometals’ three core battery materials businesses, listed below, are commercialising these proprietary, low-cost, low-carbon process technologies in incorporated joint ventures:
- Lithium-ion Battery (“LIB”) Recycling (50% equity) – to produce nickel, cobalt and lithium from production scrap and end-of-life LIBs in an incorporated JV with leading global plant builder SMS group. The Primobius JV is operating a commercial disposal service at its 10tpd Shredding ‘Spoke’ in Germany and is the recycling technology partner to Mercedes Benz. Primobius’ first 50tpd operation, in partnership with Stelco in Canada is expected to reach investment decision in Q3 2023;
- Vanadium Recovery (72.5% equity) – to produce high-purity vanadium pentoxide via processing of steelmaking by-product (“Slag”). Targeting a 300,000tpa operation in Pori, Finland, underpinned by a 10-year Slag supply agreement with leading Scandinavian steelmaker SSAB. Finnish project investment decision with JV partner, Critical Metals, expected Q2 2023. MOU with H2Green Steel for up to 4Mt of Slag underpins a potential second operation in Boden, Sweden; and
- Lithium Chemicals (earning 35% equity) – to produce battery quality lithium hydroxide from brine and/or hard-rock feedstocks using patented ELi® electrolysis process owned by RAM (70% NMT, 30% Mineral Resources Ltd). Co-funding pilot plant and evaluation studies on a 25,000tpa operation in Estarreja with Portugal’s largest chemical producer, Bondalti Chemicals S.A.
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