Lithium Universe’s Chinese site visits validate Québec refinery project

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By Imelda Cotton - 
Lithium Universe ASX LU7 China site visits

The board and chief executive officer of Lithium Universe (ASX: LU7) have completed a site visit to China to meet with existing lithium refineries.

Led by executive chair Iggy Tan, the delegation spent time with industry executives at facilities in the provinces of Shangdong, Hubei and Sichuan.

They sought to gather feedback on the process design of Lithium Universe’s proposed 16,000 tonnes per annum battery-grade lithium carbonate refinery in Québec.

The visit also aimed to validate the company’s construction philosophy and assess market-induced strategic expansions.

The discussions are believed to have highlighted market conditions and sustainability concerns and agreed that current pricing represents the “likely break-even point” for the production of battery-grade lithium hydroxide and carbonate.

Market dynamics

Mr Tan said the visit reaffirmed Lithium Universe’s commitment to navigating through lithium market dynamics and solidifying its pivotal role within North America’s growing lithium supply chain.

“Meeting with various Chinese lithium producers was essential and extremely valuable to our understanding of the existing global conversion environment,” he said.

“We have multiple points of difference that were validated on this excursion including proven technology, demonstrated development experience, a focus on lithium carbonate and access to convert within the North American battery supply chain.”

Expansion plans

In anticipation of a strengthening lithium market, each of the Chinese producers presented their strategic expansion plans within China and Asia.

“The producers we met with were expanding or modifying existing plants to have the ability to produce battery-grade lithium carbonate as opposed to an expansion into lithium hydroxide,” Mr Tan said.

“This significant increase in demand for lithium carbonate is due to the popularity of lithium iron phosphate (LFP) batteries where lithium carbonate is the feedstock.”

China’s preferred battery

Renowned for their stability, safety and cost-effectiveness despite relatively lower energy density compared to their nickel cobalt manganese counterparts, LFP batteries are currently the preferred option for China’s domestic electric vehicle market, accounting for over 67% of installations in 2023.

With a cathode material reliant on lithium carbonate and iron phosphate, LFP is also well suited to large-scale energy storage applications.

Mr Tan said as more Chinese consumers choose LFP batteries, it may be a key indicator of consumer demand preference shift.

“These insights further reinforce our strategy to focus on delivering our battery-grade lithium carbonate refinery in Québec,” he said.