Success in Arkansas could be a game-changer for the lithium industry
“No new lithium mine has been built in the United States in over five decades. Breaking ground at our El Dorado site represents a major achievement towards changing that”, states Standard Lithium CEO Robert Mintak.
Standard Lithium Ltd. (TSXV: SLL | OTCQX: STLHF) is a lithium extraction technology company. Or as the Company states: “By applying a disciplined development plan, proprietary rapid lithium processing technology and strategic alliances Standard Lithium is positioning itself to lead the next generation of lithium producers. Standard Lithium is focused on unlocking the value of existing large-scale US-based brine resources that have the potential to be brought into production for battery quality lithium materials.”
Standard Lithium’s lithium partner projects
- Southern Arkansas (flagship)
- The Bristol and Cadiz Dry Lake Lithium Brine Project – Mojave Desert California
The Southern Arkansas Lithium Brine Project’s location map
Standard Lithium partner in Arkansas is Lanxess
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Lanxess owns the largest brine processing facility in North America (focused on bromine extraction), with land operations encompassing more than 150,000 acres, with 10,000 brine leases. Standard Lithium secured the agreement to demonstrate they can effectively recover lithium from their brine.
Standard Lithium’s proprietary technology is environmentally friendly, has faster processing time, and is expected to give a higher recovery than traditional extraction methods of up to 150 tonnes per annum of lithium carbonate. By eliminating the use of evaporation ponds, the processing time is reduced from months to hours.
Direct lithium extraction demonstration plant
This week Standard Lithium announced that they have broken ground for a first of its kind, direct lithium extraction, demonstration plant at their Southern Arkansas Lithium Brine Project in El Dorado Arkansas. Operated by partner German specialty chemical company Lanxess Corp., the plant will employ Standard Lithium’s proprietary technology that uses a solid sorbent material to selectively extract lithium from Lanxess South Plant’s tail-brine.
Standard Lithium is separating itself from industry peers by partnering with a global chemical company (Lanxess) with real operational experience. By deploying a demonstration scale, proof of concept proprietary technology at an operating brine processing plant, they are also removing financing and off-take risks by using a joint venture strategy.
Preliminary Economic Assessment results – Southern Arkansas Lithium Brine Project
On June 19, 2019, Standard Lithium announced their results of a Preliminary Economic Assessment (PEA) for their lithium joint venture with Lanxess Corp. The PEA takes into consideration a total of 20,900 tonnes per annum of battery quality lithium carbonate from the three Lanxess operating bromine processing plants. This will also include the reclassification of the existing mineral resource to an Indicated category of the 25 year mine life.
Key highlights (project basis) of the PEA include:
- Pre-tax NPV8% US$1.3 Billion and IRR of 42%.
- Post-tax NPV8% of US$989m
- Total CAPEX estimate of US$437 Million including a 25% contingency.
- Non-optimized reagent cost per tonne lithium carbonate of US$3,107.
- All-in operating costs of US$4,319 per tonne of lithium carbonate.
- Lanxess resource upgraded to 3,140,000 tonnes Lithium Carbonate Equivalent (LCE) in the Indicated Category.
Reading further into the detail the Phase 1 CapEx is just US$171 million, which looks very achievable to get the project into production. The reason being, Lanxess is already a bromine producer from brine and much of the infrastructure is in place, with only the lithium extraction and processing required.
Dr. Andy Robinson, President and COO of Standard Lithium commented: “We are delighted that we have been able, through close partnerships and access to large amounts of data, to bring our Lanxess project to the stage of successful completion of the PEA in such a short period of time.”
With a large part of the world’s lithium coming from brines, Standard Lithium and partner Lanxess Corp. are planning to demonstrate at a scale that they can bring the processing time of lithium production down to hours instead of months. The final factor to be seen will be the costs of production at scale and how they compare with traditional brine evaporation projects.
Success in Arkansas could be a game-changer for the lithium industry and Standard Lithium. Standard Lithium is based in Vancouver, Canada and has a market cap of C$ 77.4 million.
Matthew Bohlsen holds a Graduate Diploma in Applied Finance and Investment (similar to CFA), and a Graduate Diploma in Financial Planning. He has 30 years ... <Read more about Matthew Bohlsen>