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Core Lithium secures $6 million in funding from $1.3 billion Modern Manufacturing Initiative

Last updated: 13:54 22 Jul 2021 AEST, First published: 13:36 22 Jul 2021 AEST

Core Lithium Ltd - Core Lithium secures $6 million in funding from $1.3 billion Modern Manufacturing Initiative
Core Lithium will pocket A$6 million in Federal Government funding to hone its lithium production potential.

Core Lithium Ltd (ASX:CXO) (OTCMKTS:CXOXF) is set to receive A$6 million in Australian Government funding under the national, billion-dollar Modern Manufacturing Initiative.

The emerging lithium producer will use the fresh capital to evaluate the potential for a battery-grade lithium hydroxide plant in Darwin Harbour’s Middle Arm Industrial Precinct.

In the meantime, Core is preparing to kick off construction at Australia’s next lithium mine at its cornerstone Finniss Lithium Project in the Northern Territory, with first production slated to take place before the end of 2022.

With support from both the Federal and Northern Territory governments, the ASX-lister claims it is a step closer to realising Finniss’ longer-term potential with a potential lithium concentrate downstream processing facility.

“Meeting future lithium supply gap”

Core Lithium managing director Stephen Biggins said Core had identified a unique opportunity to assist Australia in capturing an increased portion of the lithium value chain.

“We’re thrilled to have received this A$6 million grant and we thank the Federal Government and the Territory Government for their continued support of Core and our Finniss Project, which is firmly on track to become Australia’s next lithium mine.

“Core believes that it has a key role to play in meeting the future lithium supply gap, which is expected to grow at a rapid rate as the demand for electric vehicles and renewable energy ramps up over the next decade.

“With this grant secured, we look forward to potentially realising the long-term value of developing a lithium hydroxide plant in the Northern Territory.”

Shares have been almost 12.3% higher intra-day to A$0.275 while the company's market cap before opening was approximately A$287.7 million.

Core’s lithium strategy

Ultimately, today’s grant represents State and Federal government faith in Core’s commercial potential to produce battery-grade lithium hydroxide near the Finniss Lithium Project.

The company’s immediate goal is to export spodumene concentrate from Finniss, which lies just 25 kilometres from Darwin Port.

Currently, Core is completing a scoping study that examines its potential to capture more of the lithium value chain. The ASX-lister is primarily looking at ways it can subject lithium concentrate to downstream processing, producing lithium hydroxide.

This scoping study will be followed up with feasibility studies, financially supported by today’s government grant. The evaluations are taking place in tandem with Core’s primary objective: developing the Finniss Project in line with its production timeframe.

Modern Manufacturing Initiative

Core says the potential for downstream lithium processing in one of the Northern Territory’s key industrial precincts strongly aligns with the Australian Federal Government’s Modern Manufacturing Strategy.

This campaign includes the A$1.3 billion Modern Manufacturing Initiative (MMI), a grants program focused on increasing Australia’s onshore critical mineral refinement capabilities.

Today’s grant comes after the federal government awarded Core’s Finniss asset Major Project Status earlier this year.

As part of its MMI application process, the lithium project develop received a letter of support from Chief Minister of the Northern Territory Michael Gunner.

“The Territory Labor Government is proud to back in this shovel-ready project, which is creating hundreds of jobs for Territorians.

“This is a big-tick from the Commonwealth and for Australia’s comeback capital – we both know the resources sector is playing a massive role in driving our economic recovery from the coronavirus crisis, so this is really good news.”

Today, Minister for Industry, Science and Technology Christian Porter said Australia was well placed to capitalise on growing global demand for battery systems and the critical minerals associated with their production, with the energy storage market expected to be worth almost US$20 billion by 2027.

“Australia’s resource sector is world-class. Through our A$1.3 billion Modern Manufacturing Initiative, we are helping to unlock this enormous potential by providing targeted support for projects that will deliver big rewards for our local economy in terms of export earnings and new job opportunities.

“Whether it’s building large-scale battery systems, adding value to critical minerals exports through new refining techniques, or driving the adoption of battery power in mining vehicles, these projects will increase Australia’s international competitiveness and help position us a future leader in this crucial sector.”

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