Lithium Energy signs deal to build a 3000tpa battery grade lithium plant at Solaroz

A demonstration plant capable of producing up to 3000t of battery grade lithium carbonate a year will be built at Lithium Energy’s Solaroz project under a new deal.

Under a newly signed deal, a demonstration plant will be built at Mario Angel, a discrete stand-alone concession ideally suited for DLE test purposes. Picture: Getty Images

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Chinese-based Xi’an Lanshen New Material Technology Co will build a demonstration plant capable of producing up to 3000t of battery grade lithium carbonate a year at Lithium Energy’s Solaroz project in Argentina.

Lanshen, a leading provider of DLE technology and plant manufacturing, will set up the operation at the stand-alone Mario Angel concession (comprising about 543ha out of a total Solaroz area of around 12,000ha), southwest of the main block of Lithium Energy’s (ASX:LEL) Solaroz concessions.

The Mario Angel area was selected as it is a relatively small concession, ideally suited for DLE test purposes, and therefore will not impact on the development of the broader concession holdings, where LEL is undertaking a scoping study with global consultancy, Hatch.

With commissioning targeted for the second half of CY24, subject to receipt of all necessary permits and approvals, the plant will include Lanshen’s proprietary sorbent-based direct lithium extraction (DLE) technology, which has already been proven on industrial and commercial scale.

So far, drilling at Mario Angel has encountered intersections of up to 235m of lithium brine mineralisation across the upper and lower aquifers, with an average grade of 446mg/l Li in the upper aquifer and 501 mg/l Li in the lower aquifer.

Commercial and environmental benefits

LEL executive chairman William Johnson says this partnership with one of the world’s leading providers of DLE technology is a “tremendously” exciting initiative.

“Whilst the location and size of the Solaroz Project as a whole is considered highly favourable for traditional pond evaporation (as used by our neighbours Allkem and Lithium Americas), sorbent-based DLE technology offers a number of potential significant commercial and environmental benefits,” he explained.

‘Try before we buy’ commercial arrangements

“The ‘try before we buy’ commercial arrangements agreed under the framework agreement, through which Lanshen has committed to fully fund the construction and initial operation of the plant, are highly favourable for Lithium Energy,” Johnson said.

Johnson added that the development of the project would enable LEL to fully test the plant’s capabilities before making a purchase decision, and would provide valuable information towards the development of the broader Solaroz project as a whole.

Agreement details and value

Lanshen will supply, build, and initially operate the plant at its own cost, with Lithium Energy being responsible for securing all necessary approvals and permits and establishing the necessary supporting site infrastructure.

Once the plant is completed, if it passes pre-agreed acceptance criteria, Lithium Energy will buy it for either cash consideration, or a percentage interest in the lithium rights associated with the Mario Angel concession.

The value of the plant will be outlined in a more detailed agreement which is envisaged to be executed before September 2023.

If the plant does not meet the criteria, Lanshen may be required to remove the structure at its own cost.

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This article was developed in collaboration with Lithium Energy, a Stockhead advertiser at the time of publishing. This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

Originally published as Lithium Energy signs deal to build a 3000tpa battery grade lithium plant at Solaroz