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European Lithium has made a big statement in its bid to become the first on-shore producer of lithium hydroxide

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Backed by an offtake deal with BMW, a definitive feasibility study released by European Lithium today shows the mine and downstream processing operation will generate 8800t of lithium hydroxide monohydrate per annum for 14.6 years.

That would amount to some 129,000t over the life of mine from the completion of a hydrometallurgical downstream processing facility in 2026.

With a robust DFS and internal rate of return of 33.3%, well above standard industry investment thresholds, construction of that plant is expected to begin in the fourth quarter of this year.

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Mean green machine

The DFS also highlights the impressive ESG credentials of the Wolfsberg operation, located just 20km east of the city of the same name in Austria.

The project will be well-located, just 93km from a 3000 strong cohort of university students at an established mining university in Leoben with a technically skilled local population.

It will also have access to the Baltic to Adriatic rail corridor through the completion of the Koralm tunnel in 2025, providing access to motorways that will connect the mine to lithium-ion battery plants under development across the EU.

The DFS has also outlined the tiny environmental footprint of the operation, with a mining fleet of battery electric vehicles revealed to be economically viable for the project.

An underground portal, concentrator and surface infrastructure will all be located within an envelope of under 10 hectares.

“European Lithium is committed to the sustainable development of its Wolfsberg Project, utilising 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 said.

Importantly, most of the company’s mineral resource of 12.88Mt at 1% Li2O (measured and indicated 9.7Mt at 1.03% Li2O) has been converted to proved and probable reserves, which come in at 11.483Mt at 0.64% Li2O, with contained lithia of 72,937t.

Euro-boom

The baseline price for the study has been ramped up significantly from a PFS completed in April 2018 from US$26,800/t to US$54,000/t.

But the need for lithium to power a move to EVs and energy storage has only gathered pace since then.

The 2018 study assumed 140 million EVs would be rolled out worldwide by 2030.

But sales have already outpaced projections. In 2021 EV sales worldwide hit 6.6m against previous expectation of 5m, a 30% beat.

The IEA’s long term forecasts for EV adoption by 2030 have doubled since the 2018 PFS, with a long running deficit expected in undersupplied lithium markets.

The EU has moved to accelerate the shift by passing laws that all new passenger vehicle sales will be EVs by 2035, with more than 1500GWh of lithium ion battery manufacturing planned.

The number of gigafactories in Europe is projected to lift from 142 in 2022 to more than 1200 in 2030, providing demand for lithium hydroxide monohydrate of 650,000tpa.

Much of the planned expansions in the global industry are already allocated to early moving Chinese battery producers, with European Lithium expected to provide a genuine domestic lithium producer to supply the fast-growing Euro battery market.

Capital costs

At a capital cost of US$866m, the integrated mine and processing operation is expected to produce at operating costs of US$17,016/t after by-product credits, compared to a 2025 sales price of US$48,600/t.

That is conservative in comparison to current prices, a 39% discount to the US$79,500/t being paid for lithium hydroxide in Antwerp last month.

It comes ahead of the listing of the project on the major NASDAQ market in the United States, providing access to capital from the world’s biggest investment market.

“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 said.

“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”, Stock Head writes.

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