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Lithium Energy makes “try before buy” deal with Lanshen

Updated: Apr 30

Lithium Energy executive chairman William Johnson and projects general manager Graham Fyfe with Lanshen chairman Zhijun Feng, centre. Credit: File

Chinese-based Xi’an Lanshen New Material Technology will build and fund a demonstration plant able to produce up to 3000 tonnes of battery-grade lithium carbonate a year at Lithium Energy’s Solaroz project in Argentina.

The Solaroz lithium brine project takes in about 12,000 hectares in South America’s renowned Lithium Triangle. The zone is projected to host about a third of the world’s lithium resources in underground bodies of fluid known as brines and is nestled between Argentina, Bolivia and Chile.

The company says the proposed plant will include Lanshen’s proprietary sorbent-based direct lithium extraction (DLE) technology, which has already been proven on industrial and commercial scale.

Lanshen, a widely-respected environment protection company, will solely fund the engineering, design, construction, transportation, assembly, commissioning and initial operation of the plant. Lithium Energy will later have the right to purchase the operation once it is constructed and as long as it meets pre-agreed acceptance criteria.

Lithium Energy will be responsible for securing all necessary approvals and permits.

Commissioning is expected during the second half of next year, subject to local approvals and permits, while Lanshen has also expressed potential plans to operate a bigger plant capable of producing 20,000 tonnes of lithium carbonate each year or more.

The ‘try before we buy’ commercial arrangements agreed under the Framework Agreement, through which Lanshen has committed to fully fund the construction and initial operation of the Plant, are highly favourable for Lithium Energy. The development of this Plant will enable the Company to fully test the capabilities of the plant before making a purchase decision and will provide valuable information towards the development of the broader Solaroz Project as a whole. Lithium Energy executive chairman William Johnson

Lanshen is a leading provider of DLE technology and plant manufacturing, with industrial-scale commercial plants currently in operation. Its major shareholders include China Minmetals and Softbank Capita.

Plans are in place for the plant to be built at Lithium Energy’s Mario Angel concession that sits to the south-west of the Solaroz concessions in an area covering about 543ha. The company says testing and plant operation at Mario Angel will not impact on the development of the greater concessions at Solaroz.

Lithium Energy says it currently undertaking a scoping study at the site to better understand the use of both the traditional pond evaporation method for lithium and DLE technology across Solaroz.

Management has already outlined a conceptual target at its Argentine project, following a comprehensive study of historical geophysical and drilling data related to the zone’s brines. The figure ranges between 1.5 million and 8.7 million tonnes of contained lithium carbonate equivalent LCE), with average grades of between 500 and 700 milligrams per litre lithium.

The Perth-based company, along with Allkem and Lithium Americas, controls the brine basin, which is renowned for being a low-cost, low-impurity and high-margin lithium producer. Allkem produces 42,500 tonnes per annum of LCE and Lithium Americas is building a 40,000 tonnes per annum LCE plant.

Allkem recently revealed total resources of 27 million tonnes of LCE in its Olaroz holdings.

Lanshen and Lithium Energy will now immediately start works in a bid to complete the plant by November next year, with initial activities focussing on the plant design and engineering, in addition to necessary approvals and permits.

Success for the mission will have win-win written all over the deal.

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