In a massive milestone for the emerging battery technology company, Lithium Australia (ASX: LIT) has entered into a massive joint development agreement with Australian mining giant MinRes (ASX: MIN) to develop a pilot plant up to the total budgeted cost of A$4.5 million using LIT’s patented LieNA® lithium extraction technology.
Miners will solely fund both the development and operation of the plant as well as provide all the required materials to support the subsequent lithium extraction, with LIT only needing to contribute LieNA® technology, which has the potential to enhance lithium extraction yields by up to 50% over current market performance.
The patented technology allows for the recovery of lithium from fine and low-grade spodumene which is typically disposed of as waste streams, allowing for improved mining efficiency, sustainability and potential profitability.
Following the completion of the pilot plant, a 50/50 joint venture (JV) will be formed between the two companies which will hold both the plant and wholly own the LieNA® technology, with plans for the JV to licence the technology to third parties at a target headline gross product royalty rate of 8%.
This licencing agreement has the potential to boost LIT’s revenue considerably, as the Company could potentially receive income from all tonnage processed via any mine utilising the LieNA® technology.
Maintaining the Course
This development deal is a massive step forward in the Company’s new strategy to shift focus away from lithium exploration and towards lithium-ion battery development, with the Company moving to divest a number of its exploration projects like Lepidolite Hill and GreenBushes as it moved to commercialise its Envirostream and VSPC subsidiaries just under a year ago.
This shift in focus is already showing dividends, with the Company’s battery-recycling subsidiary Envirostream securing a massive agreement with South Korean tech giant LG Energy Solutions and it’s LFP cathode powder producer VSPC producing cathode pure enough to support long-lifetime cell designs that are ideal for a range of applications in the electric vehicle and energy industries.
Boasting a market cap of ~A$13.6bn as of the start of this month and having produced over 450k DMT of spodumene concentrate for lithium extraction, MinRes has already positioned itself as a major player in the burgeoning lithium industry and this deal with Lithium Australia is a massive validation of the potential of LIT’s prospective technology.
Investors have obviously taken note as well, with LIT’s ASX-listed share price skyrocketing 39.39 per cent this morning to trade at 4.6c (9:53 am UTC +800).
The Company said that it was excited to form this partnership with what it termed as the perfect partner for its new focus on battery technology due to its substantial lithium operations.
“MinRes is the perfect partner to complement our leading lithium extraction technology, given its extensive owned operations and strategic movement downstream into the battery materials sector,” Lithium Australia’s Chief Executive officer Simon Linge said.
“Securing a development partner is also noted as a significant step within Lithium Australia’s recently released roadmap and serves as a powerful validation of our patented technology. We are excited by the future opportunity to licence our proven high-value technology to all existing and new lithium mines across Australia and the rest of the world.”