Lithium Australia’s 1H FY20 In Focus: A Step Ahead In Creating A Circular Battery Economy

Perth, Australia-based Lithium Australia NL (ASX: LIT) extracts, acquires, recovers and develops lithium projects and aims to sustainably close the loop on the energy-metal cycle, and thus create a circular battery economy with recycling of old lithium-ion batteries (LIBs) intrinsic to this plan.

On 13 March 2020, the company released its Half year 2020 Report for the six months to 31 December 2019, ending the period with a working capital surplus, being current assets less current liabilities at nearly $ 4.46 million. The operating loss after income tax incurred for the period was around $ 3,079,217, down from $ 5,396,786 as of 31 December 2018.

Operational Highlights – H1 FY20

Lithium Australia is working to establish integrated battery material processing operations within the country, and eventually build a cost-effective and renewable circular battery economy.

The LIT Group’s Production Cycle:

This indicates a potential to deliver improvements in efficiency as well as reductions in manufacturing costs across the battery industry, thus meeting the ethical, social and governance (ESG) standards that the community expects businesses to live up to. Moreover, the Company also believes these technologies could augment global efforts to tackle climate change by enhancing resource sustainability and lowering the environmental footprint of portable power.

Battery Recycling

• Envirostream Australia Pty Ltd (EVS)

LIT’s presently holds 90% equity interest in Victoria, Australia-based Envirostream Australia Pty Ltd, which operates the only facility to shred spent batteries, including LIBs, and then produce a mixed-metal dust (MMD) containing critical battery materials like cobalt, nickel, lithium and manganese. For further refining, MMD is being exported to South Korea.

Read More: Lithium Australia Increased Its Stake in Envirostream to 90%

The sources of revenue for EVS include sale of MMD and provision of its battery collection services. Additional revenue is also derived from selling aluminium, steel, copper and plastics that are recovered as clean streams during the recycling process. Typically, over 90% of the LIB mass is recycled from the EVS plant, which is much higher than yields of around 60-65% achieved by overseas competitors to date.

During the half year, Envirostream relocated its plant from New Gisborne to Campbellfield in Victoria, which led to improvements in cost efficiencies followed by production of its first MMD shipment. An offtake deal was also signed with South Korean battery recycler and one of world’s largest refiners of MMD, SungEel HiTech Co., Ltd. The first shipment of MMD was dispatched to SungEel only and production from the plant continues.

• VSPC Ltd Cathode Powders

Brisbane, Australia-based VSPC, LIT's wholly owned nanotechnology subsidiary, announced on 3 October 2019 that LIT had applied its proprietary technology for recovery of lithium as lithium phosphate (LP) from feed material supplied by EVS. Thereafter, VSPC used that LP as direct feed in the production of cathode powder for LFP coin-cell batteries, which exceeded inhouse test standards upon electrochemical testing by VSPC.

Lithium Chemicals

LIT’s proprietary lithium extraction technologies (LieNA® and SiLeach®) combined with its patented nanotechnology developed at VSPC, allows for production of battery cathode powders directly from LP, without the need for an intermediate step to produce lithium hydroxide or carbonate.

LieNA® has the potential to recover lithium from fine-spodumene tailings and off specification concentrates, discharged by concentrate producers, and the process thrives on fine and contaminated spodumene providing an avenue to increase reserves and improve resource utilisation without increasing mining costs.

Currently, the company is under discussions with a number of lithium concentrate producers to commercialise LieNA® that will further improve the utilization and recovery of existing spodumene processing operations. Over time, LIT has also exhibited recycling of mine waste (lepidolite) or fine spodumene for battery production, via SiLeach® and LieNA®.

During the half year, the World Intellectual Property Organisation (WIPO) published two international patent applications for different aspects of the Company's LP precipitation and refining process. Until granted, the technical details of the patent applications are now considered as “prior art” and affords some protection in the public domain.

Read More: WIPO Publishes Two Lithium Australia Patent Applications; Stock Zooms Up 25.81%

Batteries

VSPC uses proprietary nanotechnology at its R&D facility in Brisbane to create advanced cathode materials, which is a lucrative component in the production of superior quality LIBs. During the half year, production of cathode materials continued, while international battery manufacturers in China and Japan continued to evaluate samples of those materials.

In March 2019, VSPC’s Gen 4 LFP cathode material examination began at DLG Energy CO.,Ltd’s R&D facility in Shanghai, China. The process involved materials being assessed in a commercial 18650 battery-cell format under different electrochemical and temperature conditions and were subjected to long-term cycle testing. The stringent specifications laid out by DLG were met by VSPC’s LFP material that would be used in LIB cells for power as well as energy applications.

• VSPC is now focussed on establishing a supply chain, by 2021, of LFP to various LIB cell manufacturers across China, including DLG;
• Certain Japanese battery-cell producers, that are evaluating LFP products at laboratory scale, have also returned positive feedback as the electrochemical performance of VSPC’s LFP material met their requirements. VSPC is now further refining its product properties for specific applications and aiming for larger-scale testing in 2020;
• Also, recently, VSPC and Beijing Saideli Technology Incorporated Company Ltd signed a Memorandum of Understanding (MoU) where both parties would be collaborating on a staged commercialisation plan for VSPC’s LFP cathode material;
• Soluna Australia Battery Alliance: During the reporting period, LIT executed a contract with China-based prominent battery manufacturer, DLG, to develop a battery distribution business within Australia. Subsequently, Soluna Australia Pty Ltd appointed its first two employees, Mr Kieron D’Arcy (General Manager) and Ms Raegan Jubb (Sales Manager), both with over 10 years’ experience in the renewable energy sector. Also, Soluna delivered energy storage products across Australia.

Exploration

LIT’s preferred supply model is obtaining lithium minerals from - spent batteries (urban mining); mining waste streams (historical dumps and tailings); as discharge from currently operating mines; with other supply opportunities under continuous evaluation. Some of the prime targets inlcude lithium micas, comprising tin, tantalum and tungsten, as well as certain types of clay minerals, and fine spodumene discharged as waste during the production of lithium concentrates.

Also, during the half year, LIT continued to evaluate and rationalise its tenement holdings:

• Medcalf lithium prospect, Lake Johnston project – Western Australia: A drilling program to test this target is planned while LIT seeks approvals from the appropriate authorities. So far, the Program of Works has been submitted, and Targeted Flora Survey and Environmental Exploration Management Plan is due.
• Ravensthorpe rehabilitation – Western Australia: This project is under rehabilitation with major progress achieved at Deep Purple while monitoring continues. Rehabilitation at Horseshoe has reached conclusion.

Stock Performance: LIT has a market capitalisation of ~ $ 21.98 million with ~ 578.54 million shares outstanding. On 17 March 2020, the LIT stock settled the day’s trade at $ 0.036 with ~ 2.57 million shares traded.

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