Lithium Australia’s (ASX: LIT) Melbourne-based Envirostream Australia lithium-ion battery shredding plant has made its second shipment of mixed metal dust, which is expected to provide increasing revenue as shipments continue.
Following a period of commissioning and optimisation, the plant is running at planned capacity and double shifts – operating 16 hours a day, five days a week and producing a mixed metal dust comprising nickel, cobalt, lithium and graphite.
Lithium Australia said the double shifts will continue until the stock has been depleted with more than 110 tonnes of spent lithium-ion batteries stockpiled at the end of March.
The dust will be shipped to South Korean battery recycler SungEel Hitech under an offtake arrangement announced late last year.
To boost revenue further, Envirostream will also begin separating the aluminium and copper from spent batteries, with the designated separation circuit currently undergoing commissioning.
Lithium Australia anticipates this will be completed in the “coming weeks” and will generate near-term revenue from the stockpiled 178t of mixed copper and aluminium.
Meanwhile, Australia’s Battery Stewardship Council’s plans to introduce the nation-wide battery steward ship system from 1 July. Lithium Australia expects Envirostream will receive a “significant increase” in spent batteries for processing.
Soluna Australia to begin generating revenue
Near-term revenue is also anticipated from Lithium Australia’s Soluna Australia joint venture with China’s DLG Battery Co.
The newly incorporated Australian energy storage product company expects first sales to begin this quarter and to become cash flow positive by the end of the September quarter due to its low costs and overheads.
While expecting revenue from its Envirostream and Soluna business units, Lithium Australia has also moved to shave costs where possible to enable the company to weather the current COVID-19 crisis.
As a result, Lithium Australia will implement a combination of reduced hours, leave entitlements, and salary sacrifice to ensure it keeps as many staff onboard as possible.
Additionally, Lithium Australia board members have opted to receive half their remuneration in the form of company shares for the next six months.
Other cost reductions include minimising rental outlays for its office and factory spaces, and a decrease in exploration expenditure.
Where possible, employees are now working from home and those required onsite are observing “strict social distancing and hygiene”.
“We at Lithium Australia are deeply concerned for the health and well-being of group employees, as well as their families,” Lithium Australia managing director Adrian Griffin said.
“We encourage everyone to show concern for others and act with caution regarding their own exposure to COVID-19.”
“Let’s all hope for a speedy global recovery from the pandemic, for resumption of normal life as soon as possible for the continued success of our business for the benefit of all stakeholders,” he added.
At the end of March, Lithium Australia had $3.3 million in cash and anticipates this will suffice to sustain operations throughout the remainder of the year.