Innovative Partnership Paves the Way for Enhanced Lithium Extraction
Lithium Australia Limited (ASX:LIT) a prominent player in the lithium sector, has recently forged a ground breaking joint development agreement with Mineral Resources Ltd (ASX:MIN), a leading Australian mining company. The agreement revolves around the advancement of a disruptive lithium extraction technology, LieNA®. This technology holds the potential to significantly boost lithium extraction yields, promising a game-changing impact on the industry.
MinRes: A Mining Giant with Extensive Operations
Mineral Resources, commonly known as MinRes, stands as a key figure in the Australian mining landscape. The company boasts a diversified portfolio of mining ventures, encompassing various commodities, including lithium and iron ore. With a robust market capitalisation of approximately A$13.6 billion, MinRes commands a significant presence in the market. In the fiscal year 2022, the company recorded an impressive revenue of A$3.4 billion, demonstrating its prowess in mining operations. Notably, MinRes has established itself as a major player in the lithium sector, having produced over 450,000 dry metric tons (DMT) of spodumene concentrate for lithium extraction.
Pioneering LieNA® Technology
The heart of this collaboration lies in the development and deployment of LieNA® technology, a proprietary innovation by Lithium Australia. This revolutionary technology has the potential to revolutionise lithium extraction yields by up to 50% compared to current industry standards. One of the groundbreaking aspects of LieNA® is its ability to recover lithium from fine and low-grade spodumene, a material that is often discarded as waste. By harnessing this innovative process, mining efficiency, sustainability, and profitability could see substantial improvements.
Path to Partnership: Key Highlights of the Agreement
Under the terms of the joint development agreement, MinRes is set to take the lead in financing the development and operation of a pilot plant, along with an engineering study for a demonstration plant. The pilot plant’s budgeted cost is capped at A$4.5 million, and MinRes will provide the necessary raw materials to support the extraction process at no cost to Lithium Australia. In return, Lithium Australia brings its pioneering LieNA® technology to the table, managing the pilot plant’s production process.
Upon successful completion of the pilot plant operations and engineering study, a pivotal transformation will occur. MinRes’ convertible note, initially issued for A$4.5 million, will convert into equity in a newly formed joint venture between MinRes and Lithium Australia. This joint venture entity will be equally owned by both companies and will exclusively hold the rights to the LieNA® technology.
Driving Commercialisation: A Licensing Model
The joint venture is primed for the commercialisation phase, with a strategic plan in place. The partners intend to license the LieNA® technology to third parties under a licensing model. The target headline gross product royalty rate for this licensing arrangement stands at an attractive 8%. This royalty model has the potential to significantly expand Lithium Australia’s market reach, as it can capture fees from all tonnage processed using the LieNA® technology.
Elevating the Partnership: Demonstration at Scale
The journey doesn’t stop at the pilot plant. The joint venture partners have their sights set on a larger demonstration plant, where MinRes has the option to independently fund, develop, and operate the plant under the license agreement. This larger plant aims to extract lithium salt at a commercial scale, offering a tangible pathway to a sustainable future for the LieNA® technology.
Global Outlook: Licensing Potential
The partnership between Lithium Australia and MinRes is strategically aligned with the global demand for lithium extraction solutions. As a prominent lithium producer, MinRes brings a wealth of experience and resources to the table, making it an optimal strategic partner for Lithium Australia. The initial target jurisdictions for licensing the LieNA® technology include Western Australia and North America. With the potential for further expansion into Europe and Africa, the partnership’s impact could resonate on a global scale.
Leadership Insight: A Positive Vision for the Future
Simon Linge, Chief Executive Officer of Lithium Australia, expresses his excitement about the new partnership with MinRes, hailing it as a significant step forward. He highlights MinRes’ strategic move downstream into the battery materials sector and acknowledges the company’s substantial operations as a perfect fit for complementing Lithium Australia’s cutting-edge extraction technology. Linge emphasises the partnership’s potential to license the high-value technology to lithium mines worldwide, fostering a sustainable and profitable future.
The joint development agreement between Lithium Australia and MinRes marks a pivotal moment in the evolution of lithium extraction technology. The fusion of MinRes’ operational prowess and Lithium Australia’s innovative LieNA® technology holds the promise of enhanced efficiency, sustainability, and profitability in the lithium mining sector. As the partners embark on the pilot plant phase and chart a path toward commercialisation, the potential for global industry transformation is undeniable. With an eye toward licensing the revolutionary LieNA® technology to mines across the world, this partnership could reshape the landscape of lithium extraction and propel the industry into a new era of advancement.
