Closing the North American lithium gap: Lithium Universe

Wed 21 Feb 24, 10:07am (AEST)
City lights Of USA,Elements of this image are furnished by NASA world
Source: Shutterstock

Key Points

  • North America's EV battery manufacturing capacity set to rise over 17-fold by 2030, but downstream sector, especially lithium converters, remains unexplored
  • Lithium Universe secures strategic property in Quebec's Bécancour, aiming to develop a Lithium Process Hub partnering with local lithium producers
  • Proximity to major battery players and infrastructure advantages drive the decision; facility positioned near 25 proposed battery and cathode facilities

North America's EV battery manufacturing capacity is forecast surge over 17-fold from 55 gigawatt-hours in 2021 to almost 1,000 gigawatt-hours by 2030. Despite this remarkable expansion, the North American downstream sector remains largely unexplored, particularly in the development of lithium converters.

Lithium Universe (ASX: LU7) has successfully executed an option agreement to acquire a commercial property strategically located within the Bécancour Waterfront Industrial Park in Quebec, Canada. The property will support the company's ambitious plans to develop a Lithium Process Hub within proximity of the prolific James Bay region.

The envisioned hub aims to partner with local lithium producers to provide spodumene for a 1 million tonne per annum concentrator and a 16,000 tonne per annum battery-grade lithium carbonate refinery.

Bécancour – Infrastructure, Utilities & Big Neighbours

The industrial property, spanning across approximately 276,400 square meters, is strategically positioned near local infrastructure and roads including:

  • The extensive North American highway network

  • Canadian National Railway services

  • The Port of Bécancour

The networks support cross-continental transportation, linking key ports on the Atlantic and Pacific coasts. The site's location also presents the opportunity to tap into low-cost hydroelectric power, industrial water as well as advanced industrial waste facilities.

"Québec’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," said Managing Director Iggy Tan.

Notably, the Bécancour area already hosts several prominent industry players, including the General Motors and Korea's POSCO Chemicals joint venture. The two heavyweights have committed CAD$500 million to develop a cathode active material factory, forecast for first production in 2025. Ford and EcoPro BM have also committed CAD$1.3 billion to develop a cathode factory, set to hit production status by 2026. Both factories are within 1 km of Lithium Universe's proposed site.

Lithium Universe Chief Executive Alex Hanley says the proximity to major battery players results in "direct demand within a short distance from our refinery and a collaborative approach to process additives and residues."

2024-02-19 15 19 08-Ann LU7 ASX Lithium Universe Secures Prime Industrial Land for Refinery.pdf
The Bécancour facility is proximal to approximately 25 new battery manufacturing and cathode facilities proposed to be in operation by the end of 2027 (Source: Lithium Universe)

Key Terms

The key terms and conditions of the option agreement are set out below:

  • Subject to shareholder and regulatory approvals

  • Expected purchase price of CAD$12.6 million (A$14.3 million) but subject to a final survey

  • Purchase price increased by the cost of any infrastructure works

  • Option term of 36 months from the date of signing the option agreement

  • First option fee of CAD$63,135 per month for a period of 30 months from July 2024. The option fee reduces the purchase price

The Quebec Lithium Processing Hub

An engineering study is currently underway for the company's Quebec Lithium Processing Hub. The latest study outlined a production profile of 16,000 tonnes of lithium carbonate per annum. The production of lithium carbonate was chosen over lithium hydroxide due to the widespread use of the concentrate in fast-growing lithium-ion phosphate batteries.

Lithium Universe seeks to complete a Definitive Feasibility Study for both the 1mtpa concentrator and 16,000tpa refinery before the end of the calendar year.

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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