Piedmont puts $809m price tag on Tennessee lithium
miningweekly.com
21st April 2023
By: Esmarie Iannucci
Creamer Media Senior Deputy Editor: Australasia
PERTH (miningweekly.com) – A definitive feasibility study (DFS) into dual-listed Piedmont Lithium’s proposed Tennessee lithium project, in the US, has estimated that the project would require a capital investment of $809-million.
The DFS was based on the production of 30 000 t/y of lithium hydroxide over an operating life of 30-years, with the PFS estimating an after-tax net present value of $2.4-billion and an after-tax internal rate of return of 32%.
The study estimated average annual steady-state earnings before interest, tax, depreciation and amortisation of $376-million a year, and steady-state after-tax cashflows of some $317-million a year, with the pay-back period estimated at just under three years.
Piedmont said on Friday that while the DFS for the Tenneesee lithium hydroxide project assumed feedstock from Piedmont’s joint ventures in Quebec and Ghana, it did not incorporate the profits expected to be derived from the company’s offtake agreements or the economic interests held in joint venture partners Sayona Mining and Atlantic Lithium.
Piedmont CEO Keith Phillips on Friday said he was pleased with the economics of the DFS, and the positive impact that the US Inflation Reduction Act would have, which strongly favours US battery and critical minerals production.
“America’s pro-electric vehicle (EV) and battery manufacturing policies are providing an advantage to Piedmont at a time when many analysts are projecting lithium shortages to continue into the 2030s. Piedmont’s selection for a $141.7-million grant last year by the US Department of Energy exemplifies America’s commitment to developing a domestic lithium supply chain.
“Tennessee Lithium is positioned to be a key resource for EV and battery manufacturers. Through long-term supply agreements with our partners, we can source raw material from spodumene that we own or in which we have an economic interest, providing greater control of our feedstock while capturing the economics of integrated production,” said Phillips.
“We can advance the development of the operation with revenues anticipated from the restart of North American Lithium (NAL) and our recent offtake agreements with Tesla and LG Chem. Further, with the Metso:Outotec flowseet, we believe we can sustainably produce critical lithium materials on a cost-effective basis for a more responsible profile compared to producers using sulfuric acid roasting.”
Piedmont is now advancing permitting and project financing for the lithium hydroxide project with the goal of starting construction in 2024. First commercial shipments from NAL is slated for the third quarter of this year, with revenue generation to support activities across Piedmont’s portfolio of projects, including Tennessee. |
