Lithium Australia Quarterly Activities Report – June 2022

Lithium Australia Limited (ASX: LIT, 'the Company') is focused on its battery recycling business (Envirostream) and LFP cathode powder (VSPC) divisions, both of which the Board believes will catalyse growth and shareholder value.

HIGHLIGHTS

Recycling: Envirostream Australia Pty Ltd (‘Envirostream’)

• Becomes 100% owned by Lithium Australia with acquisition of final 10% interest.
• Receives first cash rebate from the B-cycle Scheme for collecting, sorting and recycling end-of-life (‘EOL’) batteries.
• Battery collection rate has risen since the inception of the B-cycle Scheme in early 2022.
• Trials undertaken for a number of electric vehicle (‘EV’) and Energy Storage System (‘ESS’) manufacturers in Australia to recycle their cells and report back findings.
• Commercial development continued in the quarter targeting an increase of collection volumes and a long-term offtake partner for mixed metal dust product.

Batteries: VSPC Pty Ltd (‘VSPC’)

• Lycopodium Minerals Pty Ltd ('Lycopodium') appointed to provide engineering support services for definitive feasibility study ('DFS') for a potential lithium ferro phosphate (’LFP‘) cathode powder manufacturing facility.
• The DFS program is progressing well with activities expanded to include early-stage LFP production, to support the final stages of product pre-qualification.
• The jurisdictional focus for a potential LFP cathode power plant will be locations in Australia and North America.
• Customer offtake discussions are advancing in parallel with the DFS.

Lithium Chemicals

• Equipment certification for the federally funded LieNA® CRC-P project advanced and was received subsequent to the end of the quarter.

Corporate

• Adrian Griffin retired as Managing Director of Lithium Australia as at 31 May 2022 to take on a newly created role as Technical Advisor to the Company.
• The Board began a global search for a suitably qualified Chief Executive Officer. In the interim, organisational structures are in place to effectively manage the Company.
• Appointment of Ms Catherine Grant-Edwards and Ms Melissa Chapman as Joint Company Secretary.
• As at 30 June 2022, the Company had a cash balance of A$4.8 million and investments in listed equities of A$5.0 million.

CORE STRATEGY

Recycling of mixed EOL batteries via Envirostream underpins the Company’s ESG credentials. Envirostream is well-positioned to take advantage of the expected significant increase in volumes of spent batteries available for recycling, particularly as a result of vehicle electrification and Australia’s national battery stewardship scheme.

Envirostream has invested to build EOL battery supply, obtain a 99-year license from EPA Victoria to process higher volumes¹, and increase system capacity with its new site in Laverton². Focus now turns to driving battery recycling volumes higher, to further minimise the number of spent batteries sent to landfill and return valuable commodities to the market.

The production of LFP cathode powder for lithium-ion batteries via VSPC represents another significant commercial opportunity. An accelerated strategy is being developed which seeks to realise the benefits through construction of a pre-qualification LFP pilot plant likely to be located in Queensland, Australia, underpinned by the strong industry support required for offtake development.

RECYCLING – Envirostream

The Company, through its 100% owned subsidiary Envirostream, is the national leader in mixed-battery recycling, providing sustainable solutions for the disposal of EOL batteries and the recovery of critical energy metals which are used to manufacture new lithium-ion batteries ('LIBs').

EOL battery collections continue to rise

Envirostream has reported an increase in its collection and processing of EOL batteries since the commencement of B-cycle – the Australian government-backed battery recycling scheme developed by the Battery Stewardship Council and initiated from January of this year.

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