Strong Swedish Support Provides Synergy Opportunities
Battery anode company Talga Resources Ltd (ASX:TLG) has entered into a non-binding tripartite Letter of Intent (LoI) with international high-tech mining and minerals group Luossavaara-Kiirunavaraa Aktiebolag (LKAB) and Mitsui & Co. Europe Plc.
Talga is establishing a European supply of sustainable, low-CO2 emission anode materials for lithium-ion batteries, including construction of a scalable coated anode production facility and integrated graphite mining operations in northern Sweden, known as the Vittangi Anode Project.
LKAB, Mitsui and Talga have executed the LOI with the intent of jointly developing the Vittangi Anode Project, subject to Talga’s detailed feasibility study (expected March 2021) and related due diligence.
The project is located close to LKAB’s existing mining operations in Northern Sweden and a range of potential synergies have been identified, including local resources, skills and infrastructure.
In addition there may be commercial synergies across sales and distribution, alongside Mitsui, and in LKAB sustainability innovations in recycling and by-product processing.
Talga Managing Director, Mark Thompson, said that under the LOI the parties have the non-exclusive right to negotiate and enter binding co-development agreements with Talga by June 30, 2021, or as mutually agreed.
“We are very pleased that LKAB has decided to join with Talga and Mitsui at this stage, as we continue building partner relationships to develop the Vittangi Anode Project,” Mr Thompson said.
“LKAB play a significant role in the Swedish economy and offer strong synergies, complementary to our joint partner Mitsui, in Talga’s mission to supply European and global battery markets with sustainable anode products.”
Mr Thompson said Europe is undergoing unprecedented growth in the demand for domestic, sustainable and cost- effective battery production, driven by the move to renewable energy storage and electric vehicles.
This is creating new demand for sustainable and locally sourced battery anode materials, as cell manufacturers and automotive OEMs look to secure stable raw material supply chains and strive to minimise their carbon footprints. “Talga’s aim is to establish scalable European anode manufacturing in Sweden underpinned by vertical integration and in-house technology to build a secure, cost competitive and high-quality co-located supply. Building the operations in northern Sweden, given its availability of fossil free energy supply enables Talga to position itself as a low-carbon leader in anode production.”
