Lithium Universe secures prime industrial property for Québec hub

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By Colin Hay - 
Lithium Universe ASX LU7 Bécancour Waterfront Industrial Park Québec

Lithium Universe (ASX: LU7) has locked up a key component in its plans to develop an innovative Québec lithium hub in Canada with the acquisition of a prime industrial property.

The newly-listed Australian junior lithium explorer and developer has executed an option agreement to purchase a commercial property within the Bécancour Waterfront Industrial Park in Québec.

As they say in the real estate business, it is all about location and that is the case with the site chosen for the multi-purpose battery-grade lithium carbonate refinery.

Location, location, location

The approximately 275,000 square metre-site selected is strategically located in Bécancour, which is optimally positioned between Montreal and Québec City with access to the extensive North American highway network, the nearby Canadian National Railway service and the year-round port of Bécancour.

Situated at the intersection of hydro-electrical distribution networks, the park also features a co-generation plant generating 550 megawatts.

Notably, Lithium Universe’s neighbors will include General Motors and Korea-based POSCO Chemicals’ new $550 million cathode active material factory, as well as the $1.3 billion Ford/EcoProBM cathode factory with a proposed production of 45,000 tonnes per year.

Only 140km south-west of Bécancour, Swedish battery developer and manufacturer Northvolt is also building a wholly integrated lithium-ion battery gigafactory in Québec.

Driving battery growth

Lithium Universe chair Iggy Tan said that, with more than 20 large-scale battery manufacturers on the east coast of North America and spodumene the preferred feedstock, Québec is poised to become a driving force in the emerging electric vehicle (EV)  battery ecosystem in North America.

The execution of the option agreement follows on from the company’s recent appointment of leading international firm Hatch to undertake an engineering study for the design of a multi-purpose battery-grade lithium carbonate refinery, which will form part of the company’s Québec Lithium Processing Hub strategy.

“This is just another positive step forward for the company as we secure this key landholding in the most attractive emerging battery-focused jurisdiction,” Mr Tan said.

“Québec’s low-cost hydroelectricity, high environmental standards and educated workforce, as well as the location’s logistical advantages including a deepwater port and easy rail access to the rest of North America, were key factors in the decision.”

“One of the reasons we like the site is that it gives us the opportunity to expand. We have the ability to do that if necessary.”

Closing the North American lithium gap

Lithium Universe is confident the east coast of North America is about to witness a substantial surge in battery manufacturing, with over 20 major battery manufacturers planning to deploy an estimated 900 gigawatts of battery capacity by 2028.

By 2030, Georgia, Kentucky and Michigan are poised to dominate EV battery production in the United States, joined by key players such as Kansas, North Carolina, Ohio and Tennessee.

These states aim to collectively manufacture between 97 and 136 GW-hours of EV batteries annually.

To meet the escalating demand for EVs, North America’s battery manufacturing capacity will skyrocket from 55 GW-hours in 2021 to nearly 1,000 by 2030.

This strategic expansion is expected to support the production of 10 to 13 million all-electric vehicles annually by 2030, positioning the US as a formidable global EV competitor.

Additionally, Canada’s recent focus on investing in battery plants – backed by collaborations with Volkswagen, Stellantis, LG Energy Solution and Northvolt – aims to safeguard its auto sector, potentially creating 250,000 jobs by 2030.

Supply chain a major issue

However, the industry faces a significant challenge in establishing a reliable supply chain.

This is especially due to limited access to lithium converters in North America as the region seeks to decrease dependence on China and Chinese companies.

Canada, acknowledging the significance of energy security, has also intensified efforts to reduce Chinese involvement in the sector as part of a “decoupling” or “de-risking” strategy, mirroring the actions taken by the US.

The issue lies in the scarcity of independent lithium converters planned for construction in North America stemming from a lack of expertise or a series of recent failures and delayed start-ups in the sector.

A significant gap in lithium conversion and processing looms in North America.

Assuming the planned battery manufacturing capacity of 900GW by 2028, using a ratio of 850g lithium carbonate equivalent (LCE) per KWh, Lithium Universe estimates that 800,000 tonnes of LCE per annum will be required satisfy demand in North America.

Lithium Universe is working to bridge this gap by leveraging a proven track record in constructing such converters, with its “lithium dream team” being crucial to the success of this strategy.