Melbourne, Feb 21, 2024 AEST (ABN Newswire) - Lithium Universe Limited (
ASX:LU7) (ESMAF:OTCMKTS) is pleased to announce that as part of its strategy to address the Lithium conversion capacity gap in the North American market, the company has successfully executed an option agreement (Option Agreement) to acquire a commercial property strategically located within the Becancour Waterfront Industrial Park (BWIP). The site is Lot 22 of the Parc industriel et portuaire de Becancour, Becancour, Quebec, Canada, with an area estimated to be 276,423 square metres (the Site).
Video summary of the Company's proposed Becancour Lithium Refinery location: https://investorhub.lithiumuniverse.com/link/XyMO4r
Closing the Lithium Conversion Gap
The East Coast of North America is set to witness a substantial surge in battery manufacturing, with over 20 major battery manufacturers planning to deploy an estimated 900GW of battery capacity by 2028. By 2030, Georgia, Kentucky, and Michigan are poised to dominate electric vehicle (EV) battery production in the United States, joined by key players such as Kansas, North Carolina, Ohio, and Tennessee. These states aim to collectively manufacture between 97 and 136 gigawatt hours of EV batteries annually. To meet the escalating demand for EVs, North America's EV battery manufacturing capacity will skyrocket from 55 gigawatt-hours in 2021 to nearly 1,000 gigawatt-hours by 2030, requiring an investment exceeding $40 billion. This strategic expansion is expected to support the production of 10 to 13 million all-electric vehicles annually by 2030, positioning the U.S. as a formidable global EV competitor. Additionally, Canada's recent focus on investing in battery plants, backed by collabo rations with Volkswagen, Stellantis, LG Energy Solution, and Northvolt, aims to safeguard its auto sector, potentially creating 250,000 jobs and contributing $48 billion annually to the economy by 2030.
The industry encounters a significant challenge in establishing a reliable supply chain, especially due to limited access to lithium converters in North America. The region seeks to decrease dependence on China and Chinese companies, aligning with both commercial and national security goals. Presently, Chinese companies dominate the global market for lithium converters and refining capacity. Similarly, Canada, acknowledging the significance of energy security, has intensified efforts to reduce Chinese involvement in the sector as part of a "decoupling" or "de-risking" strategy, mirroring the actions taken by the United States. The issue lies in the scarcity of independent lithium converters planned for construction in North America, potentially stemming from a lack of expertise or a series of recent failures and delayed startups in the sector. A significant gap in lithium conversion and processing looms in North America. Assuming the planned battery manufacturing capacity of 900 GW by 2028, using a ratio of 850g lithium carbonate equivalent (LCE) per KWh, the Company estimates that 800,000t of LCE per annum will be required to satisfy demand in North America. The Lithium Universe strategy is to bridge this gap by leveraging a proven track record in constructing such converters, with the Lithium Dream team being crucial to the success of this strategy.
Option Agreement
The execution of the Option Agreement follows from the Company's announcement that Hatch Ltd (Hatch) has been appointed to undertake an engineering study for the design of a multi-purpose battery-grade lithium carbonate refinery, which will form part of the Company Quebec Lithium Processing Hub (QLPH) strategy. The BWIP is the preferred site for the Company's 16,000 tpa Lithium Carbonate Refinery, validated through a comprehensive location option study conducted by Hatch. Investissement Quebec has played an integral role in supporting the Company in its objective to secure this strategic location for the Company's QLPH strategy.
The execution of the Option Agreement for the Site is another important step in the Company's fast-tracking strategy to become a producer of lithium in Quebec, Canada. The land acquisition hinges on securing project finance for the Lithium Refinery Project. The Company isn't required to raise funds specifically for buying the land. If the project finance for the Lithium Refinery Project falls through, the Company retains the option to withdraw from the agreement.
About the Site
The Company's Site is strategically situated in Becancour, just south of Trois-Rivieres, and is optimally positioned between Montreal and Quebec City. Positioned near a major highway, the site seamlessly connects to the extensive North American highway network. Additionally, the facility benefits from daily service by the Canadian National Railway (CN), enabling cross-continental transportation from east to west and north to south, linking key ports on the Atlantic and Pacific coasts. The Port of Becancour, operational all year-round, boasts a water depth of 10.67 meters, accommodating vessels of varying sizes. It features a pier extending 1,130 meters into the St. Lawrence River, equipped with 5 berths and a roll-on/roll-off ramp, further solidifying its strategic fit as the location for the Company's proposed Lithium Carbonate Refinery due to its ability to easily access international spodumene supply whilst the Canadian internal spodumene supply develops.
The Site stands at the intersection of hydro-electrical distribution networks, making the BWIP a highly reliable centre for low-cost hydroelectric power in Quebec. In addition, the park features a co-generation plant generating 550 MW, reinforcing its appeal to the Company. Additionally, the BWIP benefits from a robust infrastructure, including a 2400 kPa high-pressure line and an underground distribution network, ensuring a seamless supply to user companies. Moreover, the park offers access to both potable and industrial water, as well as advanced industrial waste facilities.
Furthermore, the Becancour Facility hosts the General Motors (GM) and Korea-based POSCO Chemicals' new CAD$500 million cathode active material (CAM) factory forecasted for first production in 2025. In addition, the CAD$1.2 billion Ford/EcoPro BM Cathode factory with a proposed production of 45,000 tonnes of CAM per year and slated to start production in 2026 also is located within the BWIP. Both CAM factories have commenced construction mid-2023 are within 1km of the Company's proposed Lithium Refinery location. Only 140km southwest of Becancour and more recently, Swedish battery developer and manufacturer Northvolt is set to build a wholly integrated lithium-ion (Li-ion) battery gigafactory in Quebec, Canada. This facility will have an annual cell manufacturing capacity of 60 gigawatt hours (GWh).
Proposed Use of the Site
The intended use of the Site will be to host the Company's proposed lithium carbonate refinery. As previously outlined under the Company's QLPH strategy, a lithium carbonate refinery, rather than lithium hydroxide refinery, has been selected due to the widespread use of the concentrate in the fast-growing Lithium Iron Phosphate (LFP) batteries. LFP batteries are increasingly used in EV applications due to their lower costs, longer shelf life and superior stability compared with lithium hydroxide. In addition, having regard to the Lithium Universe Board and management expertise in lithium carbonate processing, the Site is considered to have the necessary attributes to be a success of the Company's proposed facilities. Figure 2* shows the layout of the first 16,000 tpa lithium carbonate refinery. The site is large enough to cater for future expansions, with a further two trains of 16,000 tpa being able to fit on the site, See Figure 5*.
Key Terms of the Option Agreement
The Option Agreement is with the Societe du Parc Industriel et Portuaire de Becancour (SPIPB), a company incorporated in Quebec, pursuant to which SPIPB has granted the Company an exclusive and irrevocable right under the Option Agreement to acquire the Site.
The key terms and conditions of the Option Agreement are set out below:
- it is subject to regulatory and shareholder approvals;
- the expected purchase price is $CAD 12.6 million (Purchase Price). The final price is subject to a survey;
- the Purchase Price is to be increased by the cost of any infrastructure works;
- option term of 36 months from the date of signing of the Option Agreement;
- the first option fee of $CAD 63,135 per month (Option Fee) for a period of 30 months from July 2024. The Option Fee reduces the Purchase Price.
Chairman Iggy Tan said "This is just another positive step forward for the Company as we secure this key landholding in the most attractive emerging battery-focussed jurisdiction. Quebec's low-cost hydroelectricity, high environmental standards, and educated workforce, as well as the location's logistical advantages, including a deepwater port and easy rail access to the rest of North America, were key factors in the decision.
One of the reasons we like the site is that it gives us the opportunity to expand. We have the ability to do that if necessary."
*To view tables and figures, please visit:
https://abnnewswire.net/lnk/SG7K9538
To Watch the Video Interview, please visit:
https://www.abnnewswire.net/lnk/P9030UD9
About Lithium Universe Ltd
Lithium Universe Ltd (ASX:LU7) (FRA:KU00) (OTCMKTS:LUVSF), headed by industry trail blazer, Iggy Tan, and the Lithium Universe team has a proven track record of fast-tracking lithium projects, demonstrated by the successful development of the Mt Cattlin spodumene project for Galaxy Resources Limited.
Instead of exploring for the sake of exploration, Lithium Universe's mission is to quickly obtain a resource and construct a spodumene-producing mine in Quebec, Canada. Unlike many other Lithium exploration companies, Lithium Universe possesses the essential expertise and skills to develop and construct profitable projects.
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