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Europe Set to Power Up with its Own Domestic Supply of Battery Grade Lithium
Europe Set to Power Up with its Own Domestic Supply of Battery Grade Lithium

Europe Set to Power Up with its Own Domestic Supply of Battery Grade Lithium

  • 10-Mar-2023 10:44 AM
  • Journalist: Peter Schmidt

Europe: European Lithium is set to make history as the first onshore producer of Lithium Hydroxide in Europe. With a US$1.5 billion post-tax net present value, the Wolfsberg project in Austria is due to produce 8800 tonnes per annum of the Hydroxide Monohydrate for 14.6 years. The deal has been backed by an offtake agreement with BMW, ensuring that production begins soon.

Construction of Wolfsberg mine's hydrometallurgical downstream processing facility is expected to begin in the fourth quarter of 2020, with a projected internal rate of return of 33.3%. The facility has impressive ESG credentials and is expected to yield 129,000 tonnes over its life upon completion in 2026.

The Leoben mining university is located 93 km away from a 3000-strong student cohort, making it a great spot for an upcoming project. It will benefit from the Koralm tunnel completion in 2025 and get access to the Baltic to Adriatic rail corridor, allowing it to relate to Lithium-ion battery plants across the EU.

The project also boasts an impressively small environmental footprint; it utilises only 10 hectares of land and has a mining fleet that consists entirely of battery electric vehicles. This makes it both ecologically responsible and economically viable.

“European Lithium is committed to the sustainable development of its Wolfsberg Project, utilizing the most advanced mining and processing technologies to become a reliable low carbon producer of LHM and be a key part of the emerging Lithium supply chain in Europe,” the company stated.

A mining company recently reported a significant conversion of their mineral resource to proven and probable reserves. This translates to 11.483Mt with a Lithium content of 0.64% (72,937t). This is significantly higher than the initial 12.88Mt at 1% Li2O (measured and indicated 9.7Mt at 1.03% Li2O).

Since 2018, global demand for Lithium to power electric vehicles (EVs) and energy storage has grown significantly. The baseline price for the study in 2018 was US$26,800 per tonne, but it has since increased to US$54,000 per tonne - a significant ramp up.

In 2021 alone, EV sales worldwide exceeded projections by 30%, reaching 6.6 million - twice the number of vehicles predicted back in 2018 when the study was conducted. In that year it was expected that 140 million EVs would be rolled out by 2030. However, given this impressive growth rate it appears this target may be achieved much sooner than initially thought.

The International Energy Agency (IEA) has increased its long-term forecasts for electric vehicle (EV) adoption by 2030, creating expectations of a long-running deficit in undersupplied Lithium markets. To address this shift, the European Union (EU) has implemented laws that require all new passenger vehicle sales to be EVs by 2035. In turn, this is expected to lead to more than 1500GWh of Lithium-ion battery manufacturing as well as an influx of gigafactories across Europe. With predictions suggesting 142 gigafactories planned for 2022 and in excess of 1200 in 2030, demand for Lithium Hydroxide Monohydrate is expected to reach 650,000tpa.

Global industry expansions are being allocated to early moving Chinese battery producers, leaving Europe to turn to domestic Lithium producer, European Lithium. With a capital cost of US$866 million and an operating cost of US$17,016/t after by-product credits in 2025, the mine and processing operation would have a sales price of US$48,600/t. This is expected to provide a genuine domestic Lithium producer to supply the fast-growing Euro battery market.

Lithium Hydroxide prices in Antwerp reached an all-time high of US$79,500/t last month. But current prices are more conservative, representing a discount of 39%. The development also comes ahead of the listing of the project on the NASDAQ exchange - one of the world's largest markets for investments.

“The robust DFS provided by DRA provides confidence in the commercialisation of the Wolfsberg Project. This positive news has come during a buoyant market for Lithium and an increased urgency for decisive action to accelerate the green energy transition, especially in Europe,” European Lithium chairman Tony Sage stated.

“Our next steps include finalisation of the listing of Critical Metals on NASDAQ and continuing our discussions with our financiers. Through the business combination with Sizzle, Critical Metals Corp. expect to access substantial opportunities available in the U.S. market.”

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