ioneer moves to final engineering design phase with appointment of Veolia

ioneer ASX INR lithium Rhyolite Ridge United States final engineering design Veolia
ioneer aims to be the world’s “lowest cost lithium producer”.

Lithium hopeful ioneer’s (ASX: INR) path to production is nearing with the company appointing French-owned Veolia Water Technologies to work on the final engineering design and equipment package for its Rhyolite Ridge project in the United States.

The company noted the contract with Veolia is the largest single contract it will issue in developing its wholly-owned Rhyolite Ridge lithium-boron asset in Nevada.

Rhyolite is the only known lithium-boron deposit in North America and one of only two known such deposits in the world.

The Veolia deal will cover evaporation, crystallisation and dewatering equipment.

A definitive feasibility study completed in 2020 “confirmed Rhyolite Ridge as a world-class lithium and boron project that is expected to become a globally significant, long-life, low-cost source of lithium and boron vital to a sustainable future,” the company says.

The company’s most recent presentation said Rhyolite Ridge is “expected to be [the] lowest cost lithium producer in the world with industry leading margins”.

Plans to be first US lithium supplier

ioneer expects not only to be the world’s lowest cost lithium producer, but also to become one of the first of the operating ‘major’ lithium suppliers in the US, while also being located close to emerging battery megafactories.

First and foremost, that means Tesla, which in 2014 first broke ground on its gigafactory near Sparks, Nevada.

The Tesla plant is being built in stages, but at latest report has expanded to 180,000 square metres — and that is just 30% of its planned eventual size and will, when completed, is expected by Tesla to be the largest building in the world.

Sydney-based ioneer says it well positioned to benefit from increasing focus on US supply chain security policies.

Telsa is one of three battery megafactories operating in the US with that number to hit eight by 2024.

Five years since lithium breakthrough

It has been a long road, the company listing in 2007 as Global Geoscience and starting exploration in Nevada.

Present managing director, Bernard Rowe, was one of the company’s founders.

In 2016 prospectors showed Mr Rowe details of a then little-known lithium-boron project in southern Nevada.

According to the company’s history, Mr Rowe recognised that mineralogy at Rhyolite Ridge was “fundamentally” different from other sedimentary lithium deposits.

“At Rhyolite Ridge two thick sedimentary layers contain lithium and high-grade boron, and very little clay.

“This critical difference is why Rhyolite Ridge will become the lowest cost source of lithium in the world,” the company states.

Global Geoscience secured ownership of the project in 2017.

US will need 300,000t of lithium

According to a report from London-based Benchmark Mineral Intelligence, the US in 2030 — which by then will have the world’s second largest car fleet (after China’s) — will require 300,000t per annum of lithium to fuel the batteries being installed in automobiles.

By way of comparison, the Silver Peak mine in Nevada operated by mining major Albemarle produces about 5,000tpa.

In its most recent quarterly report, ioneer noted that it had signed a binding lithium offtake agreement with South Korea’s EcoPro Innovation, the world’s second largest nickel-rich cathode materials manufacturer.

This offtake agreement covers 7,000tpa of lithium carbonate

Mr Rowe noted at the time that the binding agreement represents up to a third of ioneer’s lithium carbonate production in the first three years of operation at Rhyolite Ridge.

Talks ongoing for further offtake deals

“This is one of the first offtake contracts signed in the lithium chemicals sector for at least two years,” he added.

In July the company reported that it was continuing discussions with “multiple” parties regarding offtake agreements for the remaining uncommitted production in Nevada.

These deals are expected to be announced before the end of this year.

Also happening before the end of 2021 is ioneer’s planned secondary listing on a US stock exchange.

This will increase the company’s exposure to US markets and what it calls the “deep US capital markets”.

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