Laboratory testwork has begun on brines from Lithium Energy’s Solaroz lithium project in Argentina after the company sent a 10,000-litre sample to Xi’an Lanshen New Material Technology’s laboratory in Chile.
It comes just six months after China-based Lanshen committed to building and funding a demonstration plant at Solaroz that would be capable of producing up to 3000 tonnes of battery-grade lithium carbonate a year from the project’s brines.
Management says the testwork would aim to optimise Lanshen’s direct lithium extraction (DLE) process flowsheet and optimise resin performance. It is also expected to provide preliminary engineering data to assist the development of Lanshen’s proposed DLE plant facility.
The proposed plant will include Lanshen’s proprietary sorbent-based DLE technology, which has already been proven on industrial and commercial scales.
While Lithium Energy’s recent scoping study confirmed conventional pond evaporation as the go-forward base development case for Solaroz, the third party-funded DLE plant project with Lanshen provides the benefit of alternative potential production pathways for the Argentine operation.
The project takes in about 12,000 hectares in South America’s renowned Lithium Triangle. The zone is projected to host about a third of the world’s lithium resources in underground bodies of fluid known as brines and is nestled between Argentina, Bolivia and Chile.
Earlier this year, Lithium Energy unveiled its maiden mineral resource at the operation, with 3.3 million tonnes of lithium carbonate equivalent (LCE).
Lanshen, a widely-respected environment protection company, is a leading provider of DLE technology and plant manufacturing, with industrial-scale commercial plants currently in operation. Its major shareholders include China Minmetals and Softbank Capita.
Plans are in place for the DLE plant to be built at Lithium Energy’s Mario Angel concession that sits to the south-west of the Solaroz concessions in an area covering about 543ha. The company says the testing and plant operation at Mario Angel will not impact on the development of the greater concessions at Solaroz.
Lanshen will solely fund the engineering, design, construction, transportation, assembly, commissioning and initial operation of the plant. Lithium Energy will later have the right to purchase the operation once it is constructed and as long as it meets pre-agreed acceptance criteria.
Lithium Energy will be responsible for securing all necessary approvals and permits.
Commissioning is expected during the second half of next year, subject to local approvals and permits, while Lanshen has also expressed potential plans to operate a bigger plant capable of producing at least 20,000 tonnes of lithium carbonate each year.
In October, Lithium Energy released an extraordinary scoping study, with financial metrics showing Solaroz could churn out up to $1.15 billion a year during a 19-year mine life. The company says the operation is capable of producing up to 40,000 tonnes of LCE per annum and can be paid back in just two years.
The study numbers – at the high-case estimate – also show an eye-popping pre-tax net present value of US$3.9 billion (AU$6.2 billion) and a pre-tax internal rate of return of 44 per cent, based on a forecast cash operating cost of US$4611 (AU$7247) per tonne of LCE. Management says the economics of the project are based on a life-of-mine assumed price of US$25,000 (AU$39,295) per tonne of lithium carbonate.
Using the low-case production estimate of 20,000 tonnes of LCE per year, the company expects a mine life of 36 years, a capital payback period of 2.5 years, an annual EBITDA of $US378 million (AU$594 million) and a pre-tax internal rate of return of 41 per cent.
Lithium Energy recently converted more than 70 per cent of its 3.3-million-tonne resource estimate into the higher indicated category. Significantly, its neighbours include lithium majors Allkem and Lithium Argentina Corporation.
The company now finds itself in the enviable position of having Lanshen fund the costs of the pilot plant and testwork as it looks to maximise the economics of its operations at Solaroz.
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