Mineral Resources backs Lithium Australia’s LieNA technology in $4.5 million deal

Lithium Australia’s (ASX: LIT) share price has rocketed up by more than 45% this morning on news it has signed a major development agreement with Mineral Resources (ASX: MIN).

The multi-million dollar deal is a major show of support for Lithium Australia’s long-held belief in its patented LieNA lithium extraction technology.

Lithium Australia has been working with the Australian Nuclear Science and Technology Organisation’s ANSTO Minerals division for a number of years to help solve an issue that, if overcome, could significantly boost Australia’s already world-leading lithium production.

LieNA has potential to double production

Initial studies have estimated the LieNA technology has the potential to enhance lithium extraction yields by up to 50% over current market performance.

The initial promise shown with the LieNA technology now has the significant backing of the $13.6 billion market-capped MinRes, which will provide the funding for the next stage of development and the cost of operating a pilot plant and an engineering study for a demonstration plant.

MinRes will trump up a total budgeted cost of up to $4.5 million and will also supply the required raw materials to support the extraction process.

Lithium Australia will contribute its patented LieNA technology and will manage the pilot plant’s production phase.

LieNA technology licensing on the horizon

Upon finalisation of pilot plant operations and engineering study, a MinRes’ convertible note will convert into equity in a new 50/50 joint venture (JV) between MinRes and Lithium Australia. The JV entity will wholly own the LieNA technology going forward.

Lithium Australia chief executive officer, Simon Linge, says the JV will be aiming to license the LieNA technology to third-parties at a target headline gross product royalty rate of 8%.

Under the development planning, the JV will initially license the LieNA technology to a larger demonstration plant which MinRes can elect to independently fund, develop, and operate. The larger plant will aim to extract lithium salt at a commercial scale under the licence.

‘Perfect’ lithium development partner

Mr Linge said MinRes’ already substantial lithium production makes it an optimal strategic partner.

“We are thrilled by the formation of a new partnership with Mineral Resources, one of Australia’s largest and most prominent mining companies,” Mr Linge said.

“MinRes is the perfect partner to complement our leading lithium extraction technology, given its extensive owned operations and strategic movement downstream into the battery materials sector.”

“Securing a development partner is also noted as a significant step within Lithium Australia’s recently released roadmap and serves as a powerful validation of our patented technology. We are excited by the future opportunity to licence our proven high-value technology to all existing and new lithium mines across Australia and the rest of the world.”

Unique extraction technology

Lithium miners in Australia and around the world have been dealing with the issue of processing fine spodumene for years.

Not only can dealing with fine spodumene ore significantly reduce production percentages and lead to a lot of waste, it can also significantly increase energy requirements and costs.

Lithium Australia’s LieNA extraction technology is underpinned by recovering lithium from fine and low-grade spodumene improving mining efficiency, sustainability and potential profitability.