Lithium Universe pursues long-term spodumene deals to supply Bécancour lithium refinery

Lithium Universe (ASX: LU7) is progressing through the next stage of its Bécancour Lithium Refinery development in Québec, Canada, with spodumene supply discussions underway.

The company has increased talks with potential product sellers since completing a definitive feasibility study (DFS) for the refinery in February 2025.

The Lithium Universe team is in discussions with both operational and near-term developers of spodumene concentrate regarding long-term feedstock supply agreements, a key component of the future start-up at the refinery.

Local refining benefits

Lithium Universe said the potential suppliers have recognised the benefits of supplying a local lithium converter as opposed to shipping and selling their spodumene to Chinese operations.

The company has recognised that choosing a local option would provide significant transport cost savings, while the suppliers could also benefit from Canada’s import tariff of 25% on all Chinese lithium chemicals—giving local conversion an overriding advantage.

Lithium Universe is focusing the current negotiations on signing a non-binding MoU for the full supply of 140,000 tonnes per annum of high-grade spodumene material it requires.

Long-term supply

Executive chair Iggy Tan said the company is seeking spodumene feed supply for at least 10 years and is targeting a supply start-up of approximately 56,000tpa from 2028 or thereabouts.

Supply tonnage would then increase to 98,000tpa in 2029 and reach the full 140,000tpa capacity from 2030 onward.

“There are several interested potential spodumene suppliers that could meet the 2028 timeframe and discussions are ongoing,” Mr Tan said.

Battery-grade carbonate

While a strategic domestic Canadian feedstock source would mitigate the company’s risks and logistical challenges, Lithium Universe is also investigating other potential spodumene supply options in the North Atlantic region.

“Once we can secure feedstock supply for the refinery, the focus will shift to getting a strategic original equipment manufacturer on board the project in exchange for the valuable battery-grade lithium carbonate offtake,” Mr Tan said.

The company will then refine the spodumene concentrate into approximately 18,270tpa annum of battery-grade lithium carbonate at a site on the doorstep of a major EV market.

DFS confirms upside

The robust Bécancour Refinery DFS highlighted the financial benefits of Lithium Universe’s “closing the lithium conversion gap” strategy.

The study confirmed the refinery would be economically viable with an excellent pre-tax NPV of approximately $1.14 billion, a pre-tax internal rate of return of approximately 21% and a payback period of 3.9 years.

It prompted the company’s board to immediately make a positive financial investment decision (FID) and proceed to the funding stage.