Lithium Universe commits to proven procurement model for Bécancour refinery project

Lithium Universe (ASX: LU7) has vowed to use a “same equipment, same supplier” procurement strategy for the construction of its Bécancour lithium carbonate refinery in Canada.

Chief executive officer Alex Hanly and key members from the company’s board of directors visited the Shanghai procurement office of Hatch engineering consultancy to work on the strategy, which will replicate that used for China’s massive Jiangsu lithium plant.

Hatch was appointed in October to undertake an engineering study for the design of Lithium Universe’s multi-purpose, battery-grade refinery that will form part of the Québec Lithium Processing Hub.

Procurement success

Lithium Universe aims to replicate the procurement success that Galaxy Resources experienced at the Jiangsu plant.

Jiangsu is currently the world’s fourth-largest producer of lithium carbonate and up to 70% of its components were procured from Chinese manufacturers, with the remainder coming from other global suppliers.

By implementing rigorous quality control measures at each Chinese manufacturing site, Galaxy was able to achieve quality equipment that aligned with international engineering standards.

Proven strategy

Lithium Universe chair Iggy Tan stated that the company would pursue the proven procurement strategy.

“Local fabricators have been servicing the Chinese lithium refinery industry for the last 15 years and key suppliers utilised for the Jiangsu project have become the backbone of the rapid expansion across the country,” he said.

“The suppliers used by Galaxy are well-known, reliable and provide a known quality product.”

“It is critical for us to reduce the number of unknowns when planning Bécancour’s construction, and it makes sense to partner with vendors who have a proven track record of delivering specific plant and equipment.”

Cost-effective goal

Mr Tan said the concept would help Lithium Universe stay competitive in the construction of a cost-effective lithium refinery.

“Utilising proven equipment designs will allow us to reduce the amount of engineering work required for the definitive feasibility study,” he said.

“The ‘same supplier’ strategy will see us tap into the original design and construction experience, minimising the cost and time associated with repeated detailed engineering.”

In the event that original suppliers are no longer in business, he said the company would consider engaging with alternative suppliers closer to Canada.

Lithium conversion gap

Lithium Universe is working to bridge North America’s lithium conversion gap while supporting provincial and federal governments in restoring Canada’s battery supply chain.

The company aims to collaborate with Canadian suppliers, providing training and facilitating knowledge transfer while utilising the Bécancour refinery as a blueprint for replication elsewhere in North America.

“A key aspect of our approach is to use equipment and top-quality suppliers that we have used before,” Mr Tan said.

“One of the most significant advantages of this is a reduction in lead times, allowing us to execute tasks with greater speed and precision.”

“By sticking with what works, we aim to expedite the engineering process and ensure seamless coordination among all parties involved.”