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Lithium Australia
Overview
Electric vehicle (EV) production is ramping up worldwide. According to the International Energy Agency, the global stock of EVs could reach 245 million units by 2030. Importantly, the EV industry is being touted as critical to the rapidly emerging green economy.
However, the environmental sustainability of the EV industry is not as clear-cut as many believe. In fact, its growth has generated many questions about how end-of-life lithium-ion batteries can be managed in ways consistent with the ethos of the green economy. Given that the volume of spent batteries from EVs and battery energy storage systems will grow sharply over the next decade, the matter is of real concern – it is predicted that the number of end-of-life lithium-ion batteries will exceed that of lead-acid batteries beyond 2040.
Currently in Australia, less than 10 percent of end-of-life lithium-ion batteries are made available for recycling. This has prompted the establishment of a battery stewardship initiative, which provides a strong financial incentive to recycle most types of spent batteries. The initiative, which is set to take effect in early 2022, encourages responsible battery management ... from design right through to end of life. Thus, Australian companies embracing environmentally sustainable lithium-ion battery supply and recycling present investors with an intriguing opportunity as they seek to leverage such financial incentives.
Lithium Australia NL (ASX: LIT) is a diversified battery materials company with strong ESG values. Led by an accomplished management team with decades of experience in the mining, mineral processing and chemical manufacturing industries, the company is committed to developing a sustainable circular economy for battery materials.
An investment in Lithium Australia provides exposure to the exponential growth of the lithium-ion battery industry worldwide and a geographic footprint with the potential to span several countries – Australia, China, the United States, India and the United Kingdom among them. The company has established an ethical, sustainable framework for lithium extraction, processing and recycling that encompasses joint-venture projects, strategic investments and a suite of proprietary technologies – underpinned by intellectual property (IP), including international patents – that creates a sustainable model for battery production.
According to company managing director Adrian Griffin, “Lithium Australia is the only ASX-listed company with a sustainable model for battery materials.”
Lithium Australia has four lithium-battery related business divisions: raw materials, lithium chemicals, batteries and recycling. These can be summarised as follows.
With respect to raw materials, the company has progressively farmed out its exploration portfolio. In so doing, it has accumulated equity interests in the public companies now managing the projects. This reduces costs and enhances accessibility to lithium feedstock while providing shareholder value through potential economic returns.
Lithium Australia's lithium chemicals division has developed proprietary, energy-efficient technologies for the extraction of lithium from what is generally considered waste material by the mining industry. Foremost is LieNA®, a process that greatly improves the rate of recovery of lithium from spodumene. SiLeach®, meanwhile, recovers lithium from mine waste (specifically micas) and clays. Both technologies produce primary battery chemicals (lithium phosphate in particular) and are patented in Australia and internationally. The federal government has awarded Lithium Australia a grant to further develop its LieNA® process, and construction of a LieNA® pilot plant is underway.
The company's 100 percent owned subsidiary VSPC Ltd (VSPC) is a developer of advanced materials for lithium-ion batteries. VSPC, which has spent 20 years researching its proprietary, internationally patented nanotechnology, produces next-generation battery materials, including lithium ferro phosphate (LFP) and lithium manganese ferro phosphate (LMFP) cathode powders. VSPC's technology can harness lithium phosphate (produced by both LieNA® and SiLeach®) as a cathode powder precursor and thus has the potential to reduce the number of process steps required to convert lithium chemicals recovered from mine waste and spent batteries to materials for use in new lithium-ion batteries.
Lithium Australia's 90 percent owned recycling subsidiary Envirostream Australia Pty Ltd (Envirostream) is Australia's only authorised mixed-battery recycler and, as such, is well-positioned for the imminent roll-out of the national Battery Stewardship Scheme. Having established an Australia-wide collection network for mixed spent batteries (including at Bunnings stores in Australia and New Zealand) for recycling, Envirostream uses proprietary technology to extract higher yields (95 percent) from end-of-life lithium-ion batteries than any of its global competitors.
(For further details of each Lithium Australia business division, refer to 'Key assets' below.)
Company Highlights
- Lithium Australia’s strategic investments in ASX-listed companies and its free-carried exploration interests provide exploration upside and low-risk exposure to raw materials for the battery industry.
- The company’s patented lithium extraction technologies reduce the length of the supply chain from mining of raw materials through battery production to, ultimately, recycling.
- Lithium Australia is one of the few companies outside China that provides direct exposure to the burgeoning LFP industry – and the only investment exposure to LFP on the ASX. Increased global demand for LFP-type lithium-ion batteries (particularly for EVs and battery energy storage systems), lack of LFP production in the West and strong domestic consumption of LFP within China are placing immense pressure on the availability of this battery material worldwide.
- Lithium Australia is also one of the few companies worldwide to master the production of next-generation, higher-energy-output LMFP cathode material.
- As the only licensed mixed-battery recycler in Australia, company subsidiary Envirostream stands to benefit from the imminent Australia-wide battery stewardship scheme, particularly in light of its recent battery-collection agreement with Bunnings.
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Creating an ethical, secure and sustainable battery industry
Lithium Universe
Investor Insight
Lithium Universe’s mine-to-battery-grade lithium strategy offers investors a compelling opportunity to capitalize on the rapidly expanding battery metals market.
Overview
Lithium Universe (ASX:LU7) is dedicated to closing the ‘Lithium Conversion Gap’ in North America by developing a mine-to-battery-grade lithium carbonate strategy in Québec, Canada. Our mission is to support the supply chain needs of original equipment manufacturers (OEMs), particularly in the automotive sector, by converting spodumene supply into lithium chemicals for EV battery plants in North America.
The company's business model focuses on converting spodumene supplies under "take or pay" agreements with OEMs. These agreements include protective pricing mechanisms, such as floor and ceiling prices, to ensure stable margins and mitigate market volatility. This approach guarantees our LU7 refinery's payback while providing OEMs with a reliable and sustainable supply of lithium chemicals.
Company Highlights
- Focused on closing the Lithium Conversion Gap in North America by establishing a 16,000 tpa lithium carbonate plant at Bécancour, Québec
- Lithium Universe announced the results of its Definitive Feasibility Study (DFS) for the Bécancour Lithium Carbonate Refinery in Québec, Canada confirming the viability of a strong lithium conversion project, even within a below-average pricing environment.
- Led by lithium development veteran Iggy Tan, who seeks to replicate his successes at Galaxy Resources with Lithium Universe.
- The company is composed of lithium industry leaders, named the ‘Lithium Dream Team’, representing multiple decades of combined experience in mining exploration, development, production and operations.
The ’Lithium Conversion Gap’
North America anticipates a surge in battery manufacturing, with over 20 major manufacturers planning to deploy an estimated 1,000 GW of battery capacity. These are companies such as General Motors, LG Energy Solution, Ford, Power Co, Northvolt, Tesla, AESC, Toyota and Honda. Assuming the planned battery manufacturing capacity of 1,000 GW by 2028, using a ratio of 850 g lithium carbonate equivalent (LCE) per KWh, the company estimates that 850,000 tons of LCE per annum will be required to satisfy demand in North America.
On the supply side, Canada has surpassed China to claim the top spot in BloombergNEF’s Global Lithium-Ion Battery Supply Chain Ranking, a comprehensive annual evaluation of 30 countries’ potential to develop secure, reliable, and sustainable lithium-ion battery supply chains. Québec has been established as one of the most prospective regions with over 40 companies dedicated to lithium exploration and development. The cumulative lithium resource in just Québec exceeds 500Mt at +1 percent lithium oxide across eight distinct projects, which has increased over 100 percent within the last 12 months. Many companies have plans to develop mines and concentrating facilities to produce spodumene concentrate.
Figure 1: Projected US EV Battery Demand and Announced Battery Production Capacity (2022-2032)
[Source: US Department of Energy, January 2023]
Spodumene concentrate needs to be converted to battery-grade lithium carbonate or hydroxide to be used in the production of cathode materials for lithium-ion batteries. Currently, there are no operational converters in North America and the company estimates approximately only 100,000 tons of planned hard rock converters are slated for construction in the region. The region seeks to decrease dependence on Chinese lithium converters, aligning with both commercial and national security goals. Canada, acknowledging the significance of energy security, has intensified efforts to reduce Chinese involvement in the sector as part of a “decoupling” or “de-risking” strategy, mirroring the actions taken by the United States.
In a bid to advance further development of lithium supply chain in Canada, Lithium Universe and Polytechnique Montréal have entered into a strategic partnership aimed at advancing lithium processing technologies and strengthening the local supply chain for critical battery materials in Canada. The collaboration, outlined in a memorandum of understanding, seeks to enhance education, research and innovation in areas of mutual interest, with a primary focus on building Canadian expertise in the lithium battery sector.
The ’Lithium Dream Team’
The company’s strategy involves assembling a seasoned team of lithium experts renowned for rapidly delivering successful projects, dubbed the 'Lithium Dream Team', boasting extensive expertise in both hard rock lithium extraction and downstream operations, all within a single company.
Lithium Universe is headed by the chairman, Iggy Tan, who is considered a pioneer in the modern lithium industry. Over 20 years ago, Tan was one of the first Australian mining executives to recognize the potential of the emerging lithium-ion battery industry. He led Galaxy Resources and built the Mt Cattlin spodumene project (137,000 tpa of spodumene product) and the downstream Jiangsu lithium carbonate project (with a capacity of 17,000 tpa). This was the first large-scale vertically integrated, mine-to-battery-grade lithium carbonate project in the world.
Joining Iggy on the board are Pat Scallan and Dr. Jingyuan Liu. Scallan is a seasoned veteran of the lithium industry with over 25 years of managing the world-class Greenbushes Mine. He oversaw the mine's many expansions, increasing annual output from 200,000 in 1997 to over 1.4 million tpa today. Liu is widely regarded as a leading technical expert in the lithium industry. He was previously the general manager of development and technologies at Galaxy Resources, where he was responsible for overseeing the construction and commissioning of the Mt Cattlin spodumene project and the world-renowned Jiangsu lithium carbonate plant. Liu has acted as a special adviser to various lithium carbonate and lithium hydroxide projects globally.
Additional Dream Team members include Terry Stark, who previously served as the general manager of operations for both Mt Cattlin and James Bay projects; Roger Pover, with extensive experience as plant manager at Greenbushes and Mt Cattlin; and Huy Nguyen, known for his expertise in the design and construction of the Mt Cattlin mine. John Loxton, who was involved in the construction of the Jiangsu lithium carbonate plant for Hatch Engineering, has also joined the company. John Sobolewski, former CFO and company secretary of Galaxy Resources pivotal in financing both projects, assumes the role of chief financial officer role at Lithium Universe, marking a significant addition to the LU7 team's financial expertise in the lithium domain.
Lithium Carbonate Refinery
The Jiangsu lithium carbonate plant was designed to produce 17,000 tpa of battery-grade lithium carbonate. It adopted advanced Western style continuous process control techniques, setting a standard for lithium refineries globally. The plant now exceeds its design capacity, producing 20,000 tpa, and its battery-grade product ranks among the industry's finest.
Constructing and achieving steady-state quality was accomplished within two years of ground-breaking. Lithium Universe plans to replicate the successful design of the Jiangsu lithium carbonate plant entirely, employing the same suppliers, equipment and engineering firm – mitigating the second major risk. Lithium Universe has contracted Hatch Limited to conduct the definitive feasibility study (DFS), the same engineering company responsible for the original design and construction of the Jiangsu lithium carbonate plant.
Lithium Universe is advancing a mine-to-battery-grade lithium carbonate strategy in Canada through the Québec Lithium Processing Hub (QLPH). The QLPH includes a multi-purpose independent 1 Mtpa concentrator and an independent 16,000 tpa battery-grade lithium carbonate refinery. The QLPH concentrator and lithium carbonate plant aim to replicate the proven success of the Mt Cattlin spodumene operation and Jiangsu lithium carbonate plant to minimize startup and operational risks.
Figure 2: The Company’s proposed lithium carbonate refinery at layout at Bécancour, Québec.
The company has successfully executed an option agreement to acquire a commercial property in the Bécancour Waterfront Industrial Park (BWIP) between Québec City and Montréal. The industrial land secured is only 2.5 kms to the Bécancour deep-water port, allowing the import of spodumene to the facility. The company is taking a significant step towards the production of greener battery-grade lithium carbonate at the proposed Becancour lithium refinery.
Results of its preliminary feasibility study (PFS) for the Bécancour Lithium Carbonate Refinery confirm the viability of a strong lithium conversion project. A definitive feasibility study (DFS) for the Bécancour Lithium Carbonate Refinery was announced in February 2025 indicating strong project economics:
Financial Modelling:
- Economically viable with excellent pre-tax NPV of 8 percent of approximately US$718 million
- IRR (pre-tax) of approximately 21 percent and payback of 3.9 years based on;
- Price forecast of US$1,170/t SC6 and US$20,970/t for battery grade Li2CO3
- Current spot price is approx. US$775/t SC6 and US$10,680/t for battery grade LC
- Operating costs at around US$3,931/tonne;
- Capital cost estimate of US$549 million
- 11 percent increase from PFS mainly due to the Zero Liquid Discharge (ZLD) system and escalation
- Expected annual revenue of approx US$383 million and EBITDA of around US$148 million
- Project break even at around US$740 /t (SC6) and around US$14,000 per tonne LC
Lithium Universe Chairman, Iggy Tan said, “The strong NPV and returns for the project indicate an economically viable project and the Board has made the Financial Investment Decision (FID), and the project is now proceeding to the funding stage..." He added that the company will continue discussions with interested OEMs with spodumene offtake supply seeking conversion outside of China.
As an integral part of the company’s DFS, Lithium Universe has initiated metallurgical testing on various sources of spodumene. This process involves utilizing the flow sheet developed for the Québec Lithium Processing Hub refinery.
The testing is progressing smoothly, and no challenges have been identified with any of the spodumene samples. Each test program is thorough and spans several weeks, with two complete programs already concluded successfully achieving higher than the international battery grade specification of 99.5 percent lithium carbonate. All impurity levels were well within specification limits.
LU7 has signed a memorandum of understanding with Servitank, a local, Quebec-based company, that specializes in optimizing supply chain processes and logistics solutions across various industries, including chemicals and raw materials. The partnership aims to optimize supply chain processes and enhance the operational efficiency of both companies in the rapidly growing lithium sector.
Management Team
Iggy Tan - Executive Chair
Iggy Tan, a trailblazer of the modern lithium industry, was one of the first Australian mining executives to identify the significant opportunity within the emerging lithium-ion battery sector when he spearheaded Galaxy Resources Limited. Tan is looking to replicate that success with Lithium Universe, having built Galaxy’s Mt Cattlin Spodumene Project and the downstream Jiangsu Lithium Carbonate project. He also acquired the James Bay Spodumene Project in Canada and the Sal de Vida Brine Project in Argentina for Galaxy.
When Tan started at Galaxy, the company’s market capitalization was less than AU$10 million. It rose to AU$2.5 billion when the company merged with Orocobre Limited in August 2021. Tan's previous experience working with lithium dates back to the early 1990s when he briefly managed the Greenbushes Lithium Mine and commissioned the first lithium carbonate plant for Gwalia Consolidated.
Tan has over 30 years of chemical and mining experience and has served as executive director for a number of ASX-listed companies. He holds a Master of Business Administration from the University of Southern Cross, a Bachelor of Science from the University of Western Australia and is a graduate of the Australian Institute of Company Directors. He is currently CEO and managing director of Altech Batteries (ASX:ATC,FRA:A3Y)
Alex Hanly - Chief Executive Officer
Alex Hanly has over 10 years of experience in capital delivery and operational management for publicly listed companies within the mining, oil & gas, and manufacturing industries in Australia and Africa. Over the last three years, Hanly held the role of chief executive officer of ASX-listed gold company Polymetals Resources (ASX:POL). He was responsible for the successful IPO of the company, the operational management and the efficient execution of the fast-track strategy.
Hanly has a Bachelor of Mechanical Engineering and Master of Business Administration specialising in global project management.
Patrick Scallan - Non-executive Director
Patrick Scallan’s extensive experience in the lithium industry is a valuable addition to the LGX board. With over 25 years of management experience at the world-class Greenbushes Mine, he is a seasoned veteran. Greenbushes is the largest lithium hard rock mine globally and also hosts the highest-grade ore body in the world. This makes Greenbushes a unique anomaly, as no other lithium deposit worldwide compares to it.
Scallan oversaw the mine’s many expansions, increasing annual output from 200,000 in 1997 to 1.4 million tpa today, and navigated numerous ownership changes during his tenure. He is a specialist in hard rock mining and spodumene concentrating, with downstream relationships with major spodumene converters worldwide.
Scallan is also highly skilled in managing local community relationships, having acted as shire councillor for nearly 20 years during his time at Greenbushes, receiving his Order of Australia Medal for his community and local government contribution. His previous roles include management positions at Capel and Eneabba Mineral Sands in Western Australia and Western Deep Levels Gold Mine in South Africa.
Dr. Jingyuan Liu - Non-executive director
Dr Jingyuan Liu is widely regarded as a leading technical expert in the lithium industry. He previously held the position of general manager of development and technologies at Galaxy Resources, where he was responsible for overseeing the construction and commissioning of the Mt Cattlin Spodumene Project and the world-renowned Jiangsu Lithium Carbonate plant. Liu also played a key role in designing the flow sheet for the Sal de Vida brine project.
Following his work with Galaxy, he has acted as a special adviser to various lithium carbonate and lithium hydroxide projects globally, including the Lithium Hydroxide Plant operated by Tianqi in Kwinana, Western Australia.
Liu has over 30 years’ experience in project management, process and equipment design for minerals processing and the chemicals, non-ferrous metals, iron & steel and energy industries, both in Australian and internationally. He was awarded a PhD in chemical engineering from the University of Newcastle, Australia and has worked in senior chemical engineering roles with leading companies such as Hatch Engineering and Metso Minerals in Australia and Malaysia.
He is currently chief technology officer for Altech Batteries (ASX:ATC), developing high capacity silicon anode lithium-ion batteries.
John Sobolewski - Chief Financial Officer
John Sobolewski’s experience in the lithium industry offers another valuable addition to the LU7 dream team. At Galaxy Resources, he played a pivotal role during the feasibility, funding, construction and operation phases of the Mt Cattlin Spodumene mine and Jiangsu Lithium Carbonate refinery. He was also crucial in establishing teams and systems in Australia and internationally. His experience in financial modelling and debt modelling for both projects will be critical in Lithium Universe, completing definitive feasibility studies of the Québec Lithium Processing Hub concentrator and lithium carbonate refinery projects.
Sobolewski is a chartered accountant and a graduate of the Australian Institute of Company Directors. His previous roles include managing director and CEO with Mintrex, CFO and company secretary with Mintrex, Galaxy Resources Limited and Vital Metals Limited, financial controller and company secretary with Croesus Mining NL, and group accountant and company secretary with Titan Resources NL.
Justin Rivers - Head of Geology
Justin Rivers possesses more than 20 years of senior executive, technical and commercial experience in Africa, Australia, Asia, Arctic, Middle East, North America and South America in the major and junior space, with a particular focus on Iron Ore and Gold. He has a well-tenured strategic and tactical approach to the mining industry with intimate commercial, business development and M&A experience in Tier-1, publicly listed and private equity environments.
Prior to joining Lithium Universe Limited, Rivers held the position of executive director and CEO of Mauritian domiciled private equity company Convertible Resources, driving strategic development of its gold projects in the Siguiri region of northeast Guinea. He has a Bachelor of Science (first class honours) majoring in geology and environmental science from the University of Tasmania.
Terry Stark - Head of Mining
Terry Stark was previously managing director - resources division for Galaxy Resources (ASX:GXY), where he was responsible for all of Galaxy’s mineral resources assets such as exploration and mine operations. Stark oversaw the Mt Cattlin construction and subsequent successful start-up. He also managed the Galaxy James Bay project and had a good relationship with the local Cree Nation.
A veteran mining engineer, Stark holds a Bachelor of Applied Science specialising in mining engineering.
John Loxton - Head of Lithium Carbonate Refinery
John Loxton's lithium experience commenced in 2010 with work on the Jiangsu Lithium Carbonate Plant EPCM for Galaxy Resources in China where his responsibilities initially were at a Sponsor level, and further into the project. He was the project manager for the final stages of construction and commissioning. In 2019, Loxton was engaged by Tianqi Lithium as head of projects for the execution of their investment in a lithium hydroxide processing plant in Kwinana, Western Australia. He managed the commissioning of the first train achieving the first product in 2021 and undertook execution planning and establishing a project team for an identical second train in 2022. Loxton is a project manager with over 45 years of experience across a diverse range of energy, industrial, process, civil, and major infrastructure projects.
Roger Pover — Head of Processing
Roger Pover was previously the Mt Cattlin plant manager for Galaxy Resources (ASX:GXY). He was part of the commissioning and start up team and operated the plant for many years. Pover also directed all optimisation modifications made at Mt Cattlin.
Pover is a veteran in the lithium industry, having commenced his career at Greenbushes Lithium mine in the early 90s. He has a 45-year career in the mining and chemical processing industries involving mineral sands, alumina refining, lithium, iron ore, tantalum minerals and tin production.
Huy Nguyen — Engineering Manager
Huy Nguyen has been seconded from Mintrex to act as Lithium Universe Limited’s engineering client representative. Mintrex was the lead engineering company that designed and constructed (together with DRA Global) the Mt Cattlin Spodumene Plant.
Nguyen was part of the construction supervision when Mt Cattlin was built, so he is experienced with not only the design but also the construction process that delivered a project on time and on budget.
Nguyen has a Bachelor of Mechanical Engineering from Curtin University, Master of Business Administration and a member of Engineer Australia.
Victoria Vargas - Director, Lithium Universe Holdings (Canada)
Victoria Vargas brings to Lithium Universe (Holdings) more than 25 years of experience in the North American capital markets, with a significant focus on the Canadian mineral sector. She began her career at Kinross Gold Corporation and joined Alamos Gold in 2004. During her tenure, she played a pivotal role in enhancing investor exposure and facilitating the company's transition from the TSX Venture to the TSX. Before joining Alamos Gold, Vargas worked for H2O Innovation, a Québec-based company focused on providing best-in-class technologies and services for the water and wastewater treatment industry.