Piedmont Lithium’s scoping update for US project shows ‘exceptional’ economics, ‘superior’ sustainability

Piedmont Lithium ASX PLL scoping US project economics sustainability North Carolina
Piedmont Lithium chief executive officer Keith D Phillips says the Carolina Lithium hydroxide project will have a “far lower” environmental footprint than alternative suppliers.

An updated scoping study by Piedmont Lithium (ASX: PLL) of its North Carolina project confirms it will be one of the world’s largest and lowest-cost producers of lithium-hydroxide.

Piedmont says Carolina Lithium will have a “sustainable footprint that is superior to incumbent producers, all in an ideal location to supply the rapidly growing electric vehicle supply chain in the United States”.

Additionally, the company describes the economics of the project as “exceptional” with forecast average annual earnings before interest tax depreciation and amortisation of US$401 million.

Costs have been kept in check by improvements in processing of lithium, “vastly diminished” transportation distances for raw materials and finished product, “highly efficient” land and water use compared with South American brine projects and far lower carbon dioxide intensity in contrast to China’s processors.

Piedmont Lithium holds a 100% interest in the lithium project, a pre-production business targeting the manufacturing of 22,700 tonnes per annum of battery quality lithium hydroxide in North Carolina to support electric vehicle and battery supply chains in the United States and globally.

The project is located in Gaston County with what the company describes as “exceptional infrastructure, a deep local talent pool, low-cost energy and proximity to local markets for the monetisation of by-product industrial minerals”.

‘Proud of the project’s sustainability profile’

One key take-outs is the project’s sustainability profile of which president and chief executive officer Keith D Phillips says makes him particularly proud.

“Customers, investors, and neighbours are increasingly focused on businesses that are ‘doing things the right way’,” he said.

Carolina Lithium aims to be superior to producers in China and South America in this regard.

As the company’s announcement notes, Chinese lithium producers are reliant on coal-fired power and generally use carbon-intensive sulphuric acid roasting to convert raw materials shipped from Australia, while South American producers utilise vast tracts of land and large quantities of water — all in the driest desert in the world, the Atacama.

The Carolina project will eliminate sulphuric acid roasting, use solar generation and electric conveying.

Financing interest expected to be ’robust’

Mr Phillips says it is critical that raw material supply chains do not detract from the overall sustainability of the transition to electric vehicles.

“Our project will have a far lower environmental footprint than alternative suppliers, and we expect to position Piedmont well with all stakeholders,” he added.

The company is now moving to completion of a definitive feasibility study, due later this year, and have engaged JPMorgan and New York investment bank Evercore as financial advisers.

“Given the project’s unique position as the only American spodumene project, with world-class scale, economics and sustainability, we expect strategic interest to be robust,” said Mr Phillips.

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