Lithium Universe Limited (referred to as ‘Lithium Universe’ or the ‘Company,’ ASX: ‘LU7’) 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 Bécancour Waterfront Industrial Park (BWIP). The site is Lot 22 of the Parc industriel et portuaire de Bécancour, Bécancour, Québec, Canada, with an area estimated to be 276,423 square metres (the Site).
Highlights
Strategy for closing the North American lithium processing gapSecured prime industrial property in the Bécancour Waterfront Industrial Park (BWIP)Strategic location, hydroelectricity, gas, road, rail, and spodumene import facilitiesThe site has the capability for three 16,000 tpa Lithium Carbonate refineriesLocated within 1km of General Motors/POSCO Cathode factory and Ford/EcoPro BM Cathode factory and 140km from Northvolt’s EV battery facility at Saint-Basile-le-GrandIntegral component of the Québec Lithium Processing Hub (QLPH) StrategyFavourable terms including no option fee until July 2024 and option term of 3 yearsAcquisition is subject to regulatory and shareholder approvalsLand acquisition depends on Li Refinery project financeNo funds are required to be raised for land acquisition
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 collaborations 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 Québec 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 Québec 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 Bécancour, just south of Trois-Rivières, and is optimally positioned between Montreal and Québec 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 Bécancour, 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 Québec. 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 Bécancour 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 south- west of Bécancour and more recently, Swedish battery developer and manufacturer Northvolt is set to build a wholly integrated lithium-ion (Li-ion) battery gigafactory in Québec, Canada. This facility will have an annual cell manufacturing capacity of 60 gigawatt hours (GWh).
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