AUS
NZ
UK
CA
USA
IND
Highlights
- Lithium Universe (ASX:LU7) advances its Bécancour lithium refinery project to the funding stage after a positive feasibility study.
- The project boasts an estimated net present value (NPV) of $1.13 billion with a 3.9-year payback period.
- Offtake discussions with battery manufacturers and EV industry players are underway.
Lithium Universe (ASX:LU7) has taken a significant step forward in its Bécancour lithium refinery project in Canada by making a financial investment decision (FID). This decision follows the completion of a definitive feasibility study (DFS), which confirmed the project’s strong economic potential and positioned it for the next phase—funding.
According to the DFS, the refinery holds a net present value (NPV) of approximately $1.13 billion, with a projected payback period of just 3.9 years at full capacity. The study was based on conservative pricing forecasts, with spodumene concentrate estimated at $1,840 per tonne and battery-grade lithium carbonate at $33,000 per tonne.
Strong Financial Outlook
Once the refinery reaches full production capacity, revenue projections indicate approximately $603 million annually, with operational costs around $371 million. This translates to an annual EBITDA of roughly $233 million and a gross margin of around 39%.
The DFS also revised the initial pre-feasibility study (PFS) capital cost estimates, increasing the total required investment by 11% to $865 million. A significant factor in this cost adjustment was the addition of a $47 million zero liquid discharge (ZLD) system, ensuring complete recycling and reuse of process water—a key sustainability feature.
Lithium Universe (ASX:LU7) developed its financial model using design specifications from the Jiangsu lithium refinery in China, providing a solid foundation for financial planning and operational efficiency.
Securing Strategic Partners for Funding
Following the FID, the company will now focus on securing project financing. An equity and debt adviser is expected to lead the funding process, which aims to attract strategic partners at the project level. The goal is to establish Québec as a key lithium conversion hub for the transatlantic market.
“The strong NPV and returns validate the economic viability of this project,” stated Chair Iggy Tan. “We are now moving forward with funding and construction to develop a low-risk lithium conversion refinery in Québec.”
Growing Demand and Offtake Discussions
As part of its commercialization strategy, Lithium Universe (ASX:LU7) has initiated discussions with potential offtake partners, particularly original equipment manufacturers (OEMs). The focus is on securing supply agreements for battery-grade lithium carbonate, aligning with the increasing demand from North American and European electric vehicle (EV) markets.
Major automakers and battery manufacturers—including Ford (NYSE:F), General Motors (NYSE:GM), Stellantis (NYSE:STLA), Toyota (NYSE:TM), LG Energy Solution, SK Innovation, and Samsung SDI—are making substantial commitments to battery production. Lithium Universe aims to position itself as a reliable supplier within this expanding EV supply chain.
With a planned annual production capacity of 18,270 tonnes, the Bécancour refinery is poised to play a crucial role in the lithium supply ecosystem, contributing to the growing push for sustainable and locally sourced battery materials.
