Rock Tech Lithium Inc. (TSXV: RCK) has completed a bankable project study (BPS) for the construction and operation of the company’s proposed battery grade merchant lithium hydroxide monohydrate converter and refinery facility in Guben, Germany.
The results of the BPS which was conducted in collaboration with Wave International Pty and the Company’s Finnish engineering partner show a significant improvement in the Converter’s economics compared to the previous engineering study and are expected to form the basis for the project financing discussions with potential lenders.
Highlights
- Estimated Pre-Tax NPV (8% discount rate) of US$1,219m
- Estimated Pre-Tax IRR of 24%
- Estimated initial capital costs of approximately US$683m
- Estimated nameplate annual lithium hydroxide monohydrate (LHM) production capacity of 24,000 tonnes
- Estimated C1 Plant Operating Cost of US$4,752/t of LHM produced
- Estimated revenue of approximately US$14,872m over 25-year life of project
- Early construction works are anticipated to begin in Q1’2023 with start of commissioning planned from Q2’2025
Rock Tech’s planned merchant LHM Converter is anticipated to be the first European lithium converter, with capacity to produce 24,000 tonnes of battery grade lithium hydroxide per year, a raw material urgently needed by the battery and automotive industries.
The importance of lithium hydroxide is supported by the European Union’s recent agreement to effectively ban the sale of new combustion engine vehicles from 2035. Such ban will reshape the European mobility sector and further accelerate EV production, leading to an increased demand for lithium hydroxide.
Rock Tech’s plant will be located in Guben covers a total of 12 hectares offers excellent accessibility by road and rail. Additionally, key suppliers and customers reside in the region which is expected to become one of the leading battery and EV clusters in Europe. Transparent federal legislation and comprehensive state subsidy schemes further add to the region’s attractiveness. The Converter is designed to process spodumene concentrates into battery grade LHM via the sulphation-causticisation (S-C) route. The basic process flowsheet was selected in the previous phase of the Project and was subsequently optimised using data supplied by equipment vendors and metallurgical test work completed during the study.
“Our Guben Converter is an exceptional project as it will help address the increasing need for battery-grade lithium hydroxide. Additionally, it will strengthen regional supply chains by offering a processing route for spodumene concentrates in Europe.” Dirk Harbecke, Rock Tech’s, CEO, said.
“The company is very pleased that the technical and economic results of the BPS support the company’s strategy of building a converter in Germany. Although the BPS uses more conservative costing assumptions than the Converter Engineering Study, it estimates an increase in NPV and of project IRR.
“The BPS estimates a pre-tax NPV (8%) of US$1,219 million an increase of US$789 million (or 183 per cent) compared to the Converter Engineering Study. Recent inflationary pressures and global supply chain tightening have had a substantial impact on both the estimated capital expenditures and operating costs. Cost impacts are partially offset by more favourable lithium pricing assumptions based on current market price forecasts.
“We remain conservative with our price forecasting,” Mr Harbecke added.
“However, if we were to assume the current spot market prices for spodumene and lithium hydroxide remain stable, the pre-tax NPV of our Converter would increase substantially to US$4,300 million and an IRR of 37.5 per cent.”
The results of the BPS demonstrate the potential of Rock Tech’s zero waste and ESG strategy, with approximately 96 per cent of the estimated 290,000 tonnes of by-product identified for potential utilization in other industries.
Significant efforts have been undertaken to develop use cases for alumino‑silicates, sodium sulphate and gypsum. In line with its conservative costing assumptions, Rock Tech has not yet reflected such opportunities in its revenue estimates.
The city of Guben has commenced preparatory site activities such as grubbing and clearing. Rock Tech is expecting approval of its first partial permit (TG1) in Q4’2022 and the second and last partial permit (TG2) in Q3’2023. As a result of increased lead times for delivery of major equipment from suppliers, early construction works to the extent permitted under TG1 are anticipated to begin in Q1’2023, with start of commissioning planned to commence in Q2’2025.
For further information please visit: https://www.rocktechlithium.com/
