Mining development company Critical Metals has formalised a joint venture (JV) deal with the Obeikan Group to construct a lithium hydroxide processing plant in Saudi Arabia.

The 50/50 JV aims to develop, build and commission the facility, which will process lithium spodumene concentrate from Austria’s Wolfsberg Lithium Project.

Critical Metals chairman and CEO Tony Sage said: “The assignment of this JV to Critical Metals Corp represents another huge milestone for the Wolfsberg project.

“Critical Metals Corp has two dedicated partners to ensure we fulfil our ambition to become the first European producer of both spodumene and hydroxide. With these key milestones having been achieved, we expect the next steps will become a lot easier.

“Over the next several quarters, we plan to update and finalise the DFS [definitive feasibility study] on these projects, and to secure the necessary funding to commence construction. The board of the newly formed Arabian New Energy will oversee the construction of the hydroxide plant, with funding for the project sourced from within Saudi Arabia.”

The agreement will see the creation of a new company called Arabian New Energy, which will have the exclusive right to purchase spodumene from Wolfsberg’s Zone 1.

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The plant’s initial capacity and product specifications are designed to align with Critical Metals’ long-term supply contract with automotive giant BMW.

A development committee will be established by both parties to collaborate on key decisions regarding the plant’s development.

Earlier this year, European Lithium merged with Sizzle Acquisition to form Critical Metals.  

Obeikan Group CEO Abdallah Obeikan said: “We are convinced that our partnership will be beneficial for all stakeholders. This partnership will combine the solid technical expertise of Critical Metals Corp with the industrial knowledge of Obeikan while leveraging the strength of Saudi Arabian financial markets.

“It is a strategic global collaboration to achieve the goals of Vision 2030 and to advance the development of the new industry in the kingdom of Saudi Arabia.”