ioneer Ltd (ASX:INR) (OTCMKTS:GSCCF) (FRA:4G1) is trading higher on the successful conversion of lithium carbonate produced at its pilot plant using ore from the Rhyolite Ridge project in Nevada, USA, into battery-grade lithium hydroxide.
The is a key milestone in ioneer’s lithium hydroxide development path and demonstrates the company’s ability to provide both high purity technical-grade lithium carbonate and battery-grade lithium hydroxide to the burgeoning battery EV sector.
Notably, in the DFS study completed in April 2020, the project produced around 20,600 tonnes per annum of lithium carbonate for the first three years, before converting to the production of battery-grade lithium hydroxide in year four for the life of mine (LOM) at 22,000 tonnes per annum, with boric acid production averaging 174,400 tonnes per annum LOM.
Shares have been up as much as 16.7% to A$0.35, a new high of more than two years, and the company's market cap sits at approximately A$488.9 million.
“Premier US project”
ioneer managing director Bernard Rowe said: “Rhyolite Ridge will be well-positioned to meet both North American and global demand for lithium carbonate and battery-grade lithium hydroxide.
“As the premier US project, ioneer will be uniquely situated to supply the future US electric vehicle platforms of automotive OEMs.
“Benchmark Mineral Intelligence predicts that US demand for lithium carbonate and lithium hydroxide could exceed 344,000 tonnes by 2025 with nearly no domestic supply.
“Additionally, Tesla’s Gigafactory is located 203 miles northwest of the project site.
“The world is in an important transition where renewable power and the electrification of transportation will play an ever more important role.
“The successful and timely delivery of ioneer’s Rhyolite Ridge Lithium-Boron Project in Nevada is a critical early effort to secure the United States an economic, and sustainable domestic supply of this material which is a lynchpin for electrification.”
Comparison of the lithium hydroxide produced from Rhyolite Ridge ore against typical industry specifications for battery-grade lithium hydroxide.
Lithium hydroxide demand
Lithium hydroxide is the second-largest chemical produced by the lithium industry and has recently had the highest growth rate of all lithium products.
This trend is expected to continue due to the growth in higher-nickel chemistry cathode materials for automotive and energy storage markets.
Demand for battery-grade lithium hydroxide is expected to overtake that of battery-grade lithium carbonate in 2021.
The largest incremental cost in the conversion of lithium carbonate to lithium hydroxide is typically energy, including both power and heat. ioneer’s cost to produce battery-grade lithium hydroxide from lithium carbonate will be materially lower than industry norms because of several project-specific factors:
- Ideal quality, technical-grade lithium carbonate produced in the main plant;
- Excess steam and power generated by the sulphuric acid plant;
- High lithium recoveries due to recycle stream back into main plant; and
- A reduction in reagent costs achieved through the recycling of calcium carbonate back into the main plant.
ioneer has successfully produced boric acid, lithium carbonate and now lithium hydroxide from the Rhyolite Ridge ore, reinforcing the company’s unique position in the lithium industry with multiple revenue products.
Going forward, ioneer is focused on securing offtake agreements for its lithium products having already placed under binding offtake initial boric acid production.