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LITHIUM | Nemaska Lithium
NEMASKA LITHIUM Proving its position as a world-class battery grade lithium salt supplier
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LITHIUM | Nemaska Lithium
‘Out with the old and in with the new’ is an adage often attached to the beginning of a new year, and for Nemaska Lithium at the start of 2018 it couldn’t have rung any truer. Barely two weeks into the new year the TSX-listed company released an updated feasibility study for its Whabouchi project in Québec, an area that contains some of the largest and richest spodumene hard rock lithium deposits in the world. Nemaska Lithium’s president and CEO Guy Bourassa, speaks to RGN about the improved project metrics outlined in the feasibility and how the vertically integrated company will become one of the largest battery grade lithium salt suppliers in the world when Whabouchi reaches commercial production.
2018 feasibility study After completing an extensive diamond drilling programme throughout 2016/17, Nemaska Lithium’s 2018 feasibility charted a host of enhanced project metrics, including an increased life of mine production to 7Mt of spodumene concentrate at a rate of 6.25% Li2O, up from 5.5Mt outlined in the 2016 feasibility. The expected mine life was also extended from 26 to 33 years.
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LITHIUM | Nemaska Lithium
The manufacturer for OEM’s We manufacture industrial components comprising:
TS EN M KS IP U OR Q W YE E V T A A HE PL
mecanitec.com
In addition, the company raised the overall
16,000 tonnes per year [up from 3,250
capacity of its electrochemical plant by 20%,
tonnes per year].”
going from a capacity of 27,400 tonnes of lithium carbonate equivalent (LCE) per year to
Nemaska Lithium’s electrochemical plant is
33,000 tonnes LCE per year.
located in the city of Shawinigan, Quebec and will process spodumene concentrate
“Initially in 2016 we had the capacity to
extracted from the mine site near the town of
produce 3,250 tonnes per year of lithium
Nemaska and develop it into two usable end
carbonate and the rest of our production
product salts; lithium carbonate and lithium
capacity was lithium hydroxide,” says
hydroxide, thus confirming the company’s
Bourassa. “But because of the signing of
positioning as a fully integrated lithium
offtake agreements for lithium carbonate in
supplier.
2017 and our discussions with other potential clients, we realised it was important that we
Both forms of lithium salts are used in the
could produce more carbonate from our
making of lithium-ion batteries, particularly
plant.
high energy density batteries found in electric vehicles, although cathodes with high nickel
“This, along with our continuous assessment
content only work with lithium hydroxide salt
of the market, prompted our decision to
while cathodes with a lower nickel chemistry
add flexibility and increase our carbonate
can use either hydroxide or carbonate.
production capacity by a factor of five to
However, both are currently in high demand
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by OEM car battery manufacturers and other
project financing by the first quarter of this
large cathode makers.
year.
While recent rises in demand for lithium
“We are still working on a 60:40 debt equity
carbonate shaped Nemaska Lithium’s
ratio. We have already had very advanced
decision to increase its carbonate capacity,
discussions with banks private lenders and
the company has maintained its capability
institutions that are interested in the project
to produce up to 100% lithium hydroxide
financing,” he says.
and boosted its capacity by 20% to 33,000 tonnes of lithium carbonate equivalent
Nemaska has not just received attention
(LCE) per year, providing further flexibility
from a range of investors, but also from the
to its customers from the OEM large battery
end user market, primarily from the lithium
manufacturing sector.
battery and production space.
Project financing
The company has maintained an open-
Raising the capital required to construct
minded approach to distribution, negotiating
the mine and the electrochemical plant has
with several large end users and potential
always been one of the biggest barriers to
strategic partners from Asian, North
overcome for Nemaska Lithium, however in
American and European markets, building on
early 2018 Bourassa revealed his confidence
the two supply deals it signed back in 2015
in securing the full US$616million CAPEX
with Johnson Matthey (JM) and FMC Lithium.
LITHIUM | Nemaska Lithium
This brings us to Nemaska Lithium’s other major news release of 2018. On January 8th the company confirmed that a second shipment of battery grade lithium hydroxide had been delivered to JM from its Phase 1 plant in Shawinigan.
Battery grade lithium “We have achieved a very significant milestone here,” says Bourassa referring to the successful processing of spodumene concentrate at its small-scale demonstration plant and the subsequent delivery of the end product to its partner.
Resource Global Network “We are the only emerging producer that has decided to make a demonstration plant of a good size. “People were doubtful about the feasibility of having a good product with our electrochemical process. However, the fact that we built it [the phase 1 plant], commissioned it and started the operation and were finally able to deliver a very high purity lithium hydroxide to our initial client, that was a real eye-opener for a lot of people.” Proving doubters wrong was not the only reason for the Phase 1 plant decision. Along with being able to qualify its end product with its customers, Nemaska Lithium has also been able to weave in all the additional test work and data from the plant into its updated feasibility, painting a much more detailed and accurate picture of the overall project.
LITHIUM | Nemaska Lithium Consequently, all the additional information gathered from the Phase 1 plant has contributed to a significant de-risking of Nemaska Lithium’s processing method and the de-risking of the construction and start-up of the commercial plant. “That’s why designing and building the Phase 1 plant was a very sound decision. Now we’ve been able to confirm the quality of the product to a third-party client and end user, which is a very big milestone for any company,” Bourassa comments. Nemaska Lithium also released the purity specifications of its product, the details of which are often a make or break factor for the end user, as the impurities in the lithium content must be within certain level for the product to perform at an acceptable standard. “We took the average minimum and maximum acceptable level of impurities outlined in the current industry standards guideline and compared them to our product. The results show that we exceed the highest standards on the market. That was a great achievement and we are very satisfied with this.” Equipped with these impressive figures, Nemaska Lithium can further venture into the OEM large battery market, armed with a guarantee that it can supply the highest quality lithium currently on the market to any potential customer.
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Guy Bourassa, CEO & president
LITHIUM | Nemaska Lithium
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A global supply deficit
manufacturing market. However, these
Recent years have seen a steady lithium
spodumene producers are a red herring
supply deficit emerge and this pattern is
for those who see them as a solution to the
likely to continue for the next two to three
global lithium supply deficit.
years according to Bourassa, as supplies are squeezed by increasing demand from the
“Currently there is a need to have additional
fast growing EV market.
conversion capacities to be built in China to be able to convert this additional spodumene
Delving deeper into the complex factors
coming from Australia.
shaping the current lithium supply outlook, Bourassa explains how there are two types
“That’s why we have taken the decision to
of newcomers in the global supply market.
build a Phase 1 plant in the first place to pre-
There is a limited number of vertically
qualify our product ahead of the start of the
integrated companies like Nemaska
commercial operation, so that we can more
Lithium, but a large number of spodumene
rapidly enter the chain of supply.”
concentrate producers. Therefore, Nemaska Lithium is set to Of the latter, a significant number of
enjoy a big head start on its competitors
Australian producers are set to come online
over the next few years as additional raw
over the next few years, targeting the
lithium processing capacity comes online,
less stringent domestic Chinese cathode
thanks to its ability to supply end product
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lithium to battery manufacturers from its
a more laborious chemical process to make
electrochemical processing plant.
lithium hydroxide which contributes to a
Vertically integrated Being vertically integrated also allows
total processing cost that could be as much as $1,700 more than Nemaska Lithium’s conversion cost, says Bourassa.
Nemaska Lithium to not only compete with other leading lithium producers, but also gain Aside from drastically improving the project’s a major advantage over suppliers in China
economics, the electrochemical process can
and Chile from a production cost perspective. also be used to remove impurities from the spodumene concentrate before making the “Having our spodumene conversion done
conversion, resulting in Nemaska Lithium’s
in the same province gives us a cost
end product achieving industry-high purity
advantage of at least 55% of Chinese supply,” levels. For example, when the company Bourassa claims. “Then because we have
produces lithium carbonate out of its lithium
an electrochemical process instead of a
hydroxide solution, the immediate result is a
conventional chemical process, we also have
99.99% pure product.
an advantage on the conversion cost, which allows us to compete with the lowest cost
“Furthermore, if you compare our
brine producers of Chile.
electrochemical process to the conventional chemical process for the same tonnes of
The likes of Albemarle and SQM in Chile use
finished product we use about 75% less
LITHIUM | Nemaska Lithium
sulphuric acid and produce up to 80% less
work, with a schedule of 9-12 months
by-products that have no commercial value.
before commissioning the mine and starting operations.
“So, because of the process itself we have a less costly product, we have a higher purity
The construction of the electrochemical
product and we are by far the greenest way
plant is currently scheduled at 18-24 months,
of making lithium salts.�
meaning there will be around a year between
Timeline
the completion of the mine and the plant. In order to fill this gap, Nemaska Lithium
Now that Nemaska Lithium is close to
has entered into discussions with end
finalising project financing, it will look to
users in Asia looking to secure spodumene
resume construction of the mine site, having
concentrate.
previously undertaken some preliminary
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“WE ARE THE ONLY EMERGING PRODUCER THAT HAS DECIDED TO MAKE A DEMONSTRATION PLANT OF A GOOD SIZE.” GUY BOURASSA, CEO AND PRESIDENT
Thanks to the improved metrics contained in its 2018 feasibility study, Bourassa is imbued with an even stronger belief that the project can deliver globally significant quantities of high grade, end product to an increasingly voracious market of lithium-ion battery producers, ahead of the EV revolution. Within the first two weeks of 2018, Nemaska
“We do believe that we will be the largest
Lithium showcased its capabilities as a
lithium hydroxide battery grade producer by
world-class, vertically integrated player
2020-21, and we should represent between
in the lithium-ion battery space through
20-30% of worldwide lithium hydroxide
the successful shipment of battery grade
supply that is battery grade.”
lithium to its client JM, and also confirmed it is within touching distance of securing the all-important financing for its Whabouchi project.
abj
Published by Anderson Murray Media Ltd
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