Galaxy Resources Limited (ASX:GXY) Positive Results From The Final Jiangsu Definitive Feasibility Study
Tokyo, Oct 22, 2009 AEST (ABN Newswire) - Emerging lithium producer Galaxy Resources Limited (ASX:GXY)(PINK:GALXF) is pleased to announce positive results from the final Definitive Feasibility Study (DFS) into downstream processing of lithium carbonate at its Jiangsu Lithium Carbonate Plant.
The estimated capital cost is CNY 342 million or A$55 million (based on an exchange rate of RMB:AUD of 6.2).
Managing Director, Mr Iggy Tan said that the final DFS capital cost estimation is well in line with Galaxy's earlier estimates (A$50 million) and confirms the estimated returns of the project that have been previously published.
"The slight increase in capital costs represents extra processing equipment associated with alumina silicate and sodium sulphate by-product processing/packaging that was not included in the pre-feasibility study. The revenue generated from these by-products is expected to offset the extra capital costs," Mr Tan said. "In addition, the new capital estimate includes a spodumene stockpile facility and the Zhangjiagang land costs."
"The estimate also incorporates a conservative 24% in contingency costs which will allow Galaxy to manage any changes to projected costs or in the future economic environment. Galaxy has great confidence in the robustness of the DFS completed by Hatch Engineering which is well aligned with Galaxy's prudent and comprehensive approach to delivering the project," he said.
The Company will now move very quickly to awarding an EPCM contract for the Jiangsu project ahead of detailed design and the commencement of site preparation works in December 2009.
Galaxy expects to commence construction of the Jiangsu lithium carbonate facility in April 2010 with first production scheduled for Q4 2010.
"The successful outcome of the Jiangsu DFS represents the final pre-development stage in the value adding aspect of the Company's China operations, and moves Galaxy closer to becoming a key supplier of battery grade lithium carbonate to the Asian market," Mr Tan said.
Capital Costs Estimation
The study was conducted by Hatch Engineering in China and Brisbane. Hatch China has 20 years project experience in the Peoples Republic of China (PRC). The Hatch China team has successfully completed assignments on over 260 projects with a capital value in excess of US$2 billion.
The scope of the DFS included basic engineering, procurement and project execution planning in sufficient detail to support development of the Capital Cost Estimate, along with assisting Galaxy in progressing statutory approvals for establishment of the Chinese business entity. The estimate is based on enquiry documents including tender schedules, scope of work, technical specifications, datasheets and terms and conditions issued to tenderers on the approved Bidders Lists.
Jiangsu Lithium Carbonate Plant
The following key process steps are involved in the conversion of spodumene to lithium carbonate:
- Decrepitation - rotary kiln
- Sulphating roast and leaching
- Precipitation and Ion exchange
- Lithium carbonate crystallisation
- Sodium sulphate crystallisation
- 17,000 tpa battery grade lithium carbonate production
- Sales of 1 tonne lots in 25kg bags of product through the port of Zhangjiagang to Japan, Korea and Europe
- Sales of 1 tonne lots in 25kg bags of product within China
Feed Preparation
Decrepitation is an essential prerequisite for the hydrometallurgical processing of spodumene ore. In this step, the heat treatment of the ore results in a crystal phase change from the alpha to the beta form, thus making the lithium content amenable to displacement by sodium. Moist spodumene concentrate averaging 6% Li2O and 5% moisture is reclaimed from an open stockpile area and is fed to a rotary kiln. Decrepitation takes place at 1,070DEG - 1,090DEG. The kiln product consists of a granular mix of beta-spodumene and unreacted gangue minerals, which upon leaving the kiln is cooled to about 100DEG in a fluid bed cooler. The cooled kiln product is then milled in a dry grinding mill to reduce the material to below 200im in preparation for the subsequent sulphation process step.
Sulphating Roast
Dry, milled beta spodumene is thoroughly mixed with concentrated sulphuric acid in a pug mixer. The mixed material exiting the pug mixer is fed directly into the sulphating kiln. The sulphating kiln has a 2 hour residence time and the roast takes place at a pH of about 1-2 and temperature of 230DEG. Around 3 tonnes per hour of Li2SO4 is produced in the sulphating roast. Dry material exiting the sulphating kiln is cooled and gravity fed directly into the leach tank.
Leaching and Residue Removal
Leaching takes place in a single stage leach tank which receives solids from the sulphating kiln, spent liquor and make up water. An optimal pulp density is maintained to maximise the lithium concentration at crystallisation as well as to ensure that the solubility limit of lithium sulphate during leaching is not exceeded. The leach tank will operate at ambient pressure and temperature of approximately 80-90DEG. The lithium sulphate / residue slurry exiting the leach tank is pumped to a thickener and filter system to separate the gangue solids from the process liquor.
Precipitation and Ion Exchange
The precipitation circuit is designed to remove iron, magnesium and calcium impurities from the lithium sulphate solution and present a clear filtrate to the lithium carbonate crystallisation stage. Caustic soda is added in three precipitation steps.
The precipitated solids and process liquor is then pumped to the precipitate thickener and filter system to separate the process liquor from the precipitated solids. The process liquor is then passed through a media filter to polish the liquor stream prior to it entering the ion exchange module. The ion exchange module comprises two resin columns in a duty - standby arrangement to allow for a backwash stage once the column resin is loaded.
Li2CO3 Crystallisation
Lithium carbonate crystallisation takes place in a two-stage crystalliser system. The essential requirements for the crystallisation process are the addition of soda ash (sodium carbonate) and the increase in temperature of the system. The first crystallisation stage operates at atmospheric pressure and at 80DEG primarily for crystal nucleation. The second stage of crystallisation is for crystal growth. The second stage of crystallisation operates at atmospheric pressure and at 95DEG and provides additional crystal residence time. The lithium carbonate slurry from the second crystalliser reports to the lithium thickener where the lithium carbonate crystals are allowed to settle to allow separation from the spent liquor.
Product Recovery and Packaging
The slurry containing the lithium carbonate crystals is gravity fed onto a two stage wash centrifuge with intermediate hot condensate wash to remove residual sodium from the cake. The product filter cake discharging from the centrifuge at 15 - 25% moisture is fed into an indirectly heated rotary drum drier, heated by a gas fired burner system. The dried product is then conveyed to a storage silo in the bagging facility.
Na2SO4 Crystallisation
Removal of sodium sulphate is essential from the process liquor before it is reused at the front of the process. Sodium sulphate crystallisation takes place in an evaporative crystalliser system. The sodium sulphate slurry formed in the sulphate crystallisation stage reports to the sodium sulphate thickener where the solids are allowed to settle and then underflow to a vacuum belt filter. The sodium sulphate is sold as a by-product to the detergent industry.
Plant Location
Galaxy's lithium carbonate plant is being established at Zhangjiagang, a rapidly growing industrial port city located in the centre of the Yangtze River delta, some 80 km north west of the key central coastal city of Shanghai. The Yangtze is the largest river in China and the backbone of the Chinese economy.
Galaxy's plant is therefore located in one of the most developed and most modern parts of China. In selecting this location, Galaxy has succeeded in its targeted strategy of establishing itself on the most competitive terms within the one nation which has demonstrated its ability to successfully produce high quality lithium carbonate from (hard rock) spodumene through the up and down cycles of the market.
Galaxy's cost and product quality advantages will make it the lowest cost producer in China. These include:
- The proposed scale of operation and the logistical benefits of it's coastal location adjoining a major port.
- Advantages offered by operating in the Jiangsu Yangtze River International Chemical Industrial Park
- The benefits of adapting proven Chinese extraction techniques to incorporate Australian standard continuous operation procedures.
- The fact that most of China's existing lithium carbonate production is located in the far western regions of the country, and hence involves very considerable additional transport charges as it takes about 8 tonnes of concentrate to make each tonne of carbonate.
- Galaxy's designated plant capacity of 17,000 tpa which is far larger than the existing largest producer (current largest is 6,000 tpa).
- Galaxy's intention to pay particular attention to the quality of process input materials, an area where existing Chinese producers may not be strong.
- Strategic location of the site is close to major Li battery cathode materials producers.
About Zhangjiagang
Zhangjiagang has a population of some 880,000, with a per capita GDP exceeding USD 12,000. It is an important shipping and distribution centre for steel, oil, timber and cereals. The port has the capacity to cater for vessels of up to 80,000 dwt and it handles cargoes through some 19 international shipping lines, handling freight business to more than 140 ports globally. Port throughput capacity currently exceeds 100 million tonnes annually.
Galaxy's plant will be located within the Jiangsu Yangtze River International Chemical Industrial Park, one of four adjoining zones established at Zhangjiagang that are given preferential tax treatment.
One of the aims in establishing these zones is to facilitate the development of environmentally friendly technology. Since the first approvals were given in 1992, they have attracted more than 3,000 enterprises, including some 400 foreign funded enterprises, of which 20 are "Fortune 500" companies.
All of these zones offer preferential terms to industrial and logistics companies. In the case of Galaxy, the benefits include preferential income tax treatment as well as access to land on preferential terms; the waiver of a number of local taxes; and VAT rebates.
About the Jiangsu Yangtze River International Chemical Industrial Park
The Park has an area of 24km2 and was approved for development by the provincial government in May 2001. Since that time it has attracted investment from 7 of the top 10 world chemical companies including Dow Chemical, Dow Corning, Du Pont, Chevron Phillips, Unocal, Wacker, Messer and Sumitomo.
The Park has the biggest liquid chemical storage facilities in the Yangtze River Valley with ten separate 10,000 tonne petrochemical storage terminals either completed or under construction. The total volume of liquid storage capacity is nearly 800,000 cubic metres. The focus has been on products such as Fine Chemicals, Biomedical Engineering and Engineering Plastics. There is also an eco-friendly industry focus and an aim to develop a "Circular Economy" - where the intermediate products produced within the Park are also consumed within the Park.
An element of this is the offering to all participants of reticulated liquid chemicals, raw materials, industrial gases, steam and finished products throughout the park. For Galaxy, this means it will have ready access to its key process inputs being power, steam, sulphuric acid and caustic soda, as well as a ready market for its two by-waste products, being alumina silicate (saleable to cement works) and sodium sulphate (saleable to detergent manufacturers).
The Park has been acknowledged for its environmentally friendly operation. It has been awarded as a model for synchronised development of the economy and the environment.
The Company's spodumene feed will be shipped and unloaded at the Zhangjiagang Port and transferred to the nearby lithium carbonate plant (less than 0.5km from the berth) for conversion.
Key Supplies Secured
Galaxy has signed a Letter of Intent (LOI) with site neighbour, Two Lions (Zhangjiagang) Fine Chemicals Co. Ltd. (Two Lions) to supply 38,000 tonnes of sulphuric acid per annum for 15 years. The supply arrangement also includes a quantity of caustic soda (sodium hydroxide) and steam, as well as access to state of the art wharf unloading facilities. Two Lions is based in the Yangtze River International Chemical Industrial Park, next door to the site for Galaxy's lithium carbonate plant.
Two Lions was founded in 2003 and is a large scale chemical enterprise, predominantly engaged in producing basic chemical raw material feed.
The Company has also secured a key supply of soda ash (sodium carbonate) with the Jiangsu Huachang Chemical Co. Limited (Huachang). Huachang will supply 40,000 tonnes of soda ash (Na2CO3) per annum for 15 years. Huachang is based in the Yangtze River International Chemical Industrial Park, close to Galaxy's lithium carbonate plant site. Huachang is a core enterprise of Jiangsu Huachang Group Limited and is mainly involved in the manufacture of basic chemicals, fine chemicals and bio-chemicals.
About Galaxy Resources Limited
Galaxy Resources Limited (ASX:GXY) (OTCMKTS:GALXF) is an international S&P / ASX 200 Index company with lithium production facilities, hard rock mines and brine assets in Australia, Canada and Argentina. It wholly owns and operates the Mt Cattlin mine in Ravensthorpe Western Australia, which is currently producing spodumene and tantalum concentrate, and the James Bay lithium pegmatite project in Quebec, Canada.
Galaxy is advancing plans to develop the Sal de Vida lithium and potash brine project in Argentina situated in the lithium triangle (where Chile, Argentina and Bolivia meet), which is currently the source of 60% of global lithium production. Sal de Vida has excellent potential as a low cost brine-based lithium carbonate production facility.
Lithium compounds are used in the manufacture of ceramics, glass, and consumer electronics and are an essential cathode material for long life lithium-ion batteries used in hybrid and electric vehicles, as well as mass energy storage systems. Galaxy is bullish about the global lithium demand outlook and is aiming to become a major producer of lithium products.
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