Neometals has signed an option agreement to sub-lease a 40ha site at West Kalgoorlie in Australia for its proposed development of a lithium hydroxide refinery.

The agreement gives Neometals a two-year option over the site and has a provision to extend for another two years.

The company is currently undertaking front end engineering design (FEED) studies as part of a broader feasibility study for the refinery.

“The strategy to move Neometals downstream towards lithium chemical production is part of a broader evolution of our lithium business arm.”

The site is located in a new industrial estate on the Great Eastern Highway, 70km by road from Mt Marion Lithium Operations, in which Neometals has a 13.8% stake.

The 10,000tpa refinery is part of Neometals’ plans to maximise value from its lithium feedstocks in the wake of the rising global demand for the raw materials and chemicals used in batteries.

Neometals CEO Chris Reed said: “The strategy to move Neometals downstream towards lithium chemical production is part of a broader evolution of our lithium business arm.

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“The aim is to develop a closed loop lithium ecosystem with access to the lithium raw material source, value adding for use in the battery supply chain and ultimately, recycling of spent batteries.

“We are already part of the global lithium supply chain, which gives us clear industry insights and confidence in the future demand outlook for lithium hydroxide from hard rock.”

Neometals has also executed a memorandum of understanding (MoU) with the City of Kalgoorlie-Boulder (CKB) for assistance in the procurement of infrastructure and utilities for the proposed lithium refinery.

The company noted that the refinery will receive lithium concentrate feed from Mt Marion.

A final investment decision on the refinery plant construction is anticipated to be made in the June quarter of next year and subject to investment decision commissioning will begin in mid-2021.

Neometals will advance offtake negotiations and a formal selection of partners.

The company will also work with CKB to finalise fundamental service agreement terms and a funding strategy for the plant.