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Highlights
- Long-term spodumene supply talks underway
- Targeting full 140,000tpa capacity by 2030
- Strategic positioning in Canada to cut costs
Lithium Universe (ASX:LU7) is accelerating its journey toward becoming a significant player in lithium refining by pushing ahead with spodumene supply discussions to support its Bécancour Lithium Refinery in Québec, Canada. These talks are gaining momentum following the completion of a definitive feasibility study (DFS) in February 2025, which confirmed the economic strength of the proposed refinery.
The company is currently engaged in active conversations with multiple spodumene concentrate producers, both operational and near-term developers, as it seeks long-term feedstock agreements. These negotiations are aimed at securing a non-binding memorandum of understanding (MoU) for the full 140,000 tonnes per annum (tpa) of high-grade spodumene needed for the refinery’s operations.
A major advantage for potential suppliers lies in the cost savings from working with a local converter, rather than shipping material to China. The benefits are amplified by Canada’s 25% import tariff on Chinese lithium chemicals, making local refining a more competitive alternative.
Lithium Universe has outlined a phased approach to reaching full refinery capacity. Starting with 56,000tpa in 2028, output is expected to rise to 98,000tpa in 2029 and peak at 140,000tpa by 2030. This extended supply horizon, projected for at least 10 years, is intended to support a stable and consistent feed for the refinery, which will produce battery-grade lithium carbonate.
Beyond local options, the company is also examining spodumene sources across the broader North Atlantic region, aiming to reduce risk and ensure long-term stability. Once the feedstock agreements are in place, attention will shift to securing partnerships with original equipment manufacturers (OEMs) in return for battery-grade lithium carbonate offtake.
The DFS has provided compelling numbers. The refinery is projected to deliver a pre-tax net present value (NPV) of around $1.14 billion, a pre-tax internal rate of return of 21%, and a payback period of just under four years. These strong figures led the board to greenlight the financial investment decision, pushing the project toward the funding phase.
For investors tracking high-potential opportunities among ASX dividend stocks, Lithium Universe presents a compelling growth story within the evolving clean energy space. Its strategic developments also contribute to the broader resource sector's movement within the S&P/ASX200, reflecting growing confidence in battery metals.
As demand for electric vehicles and battery-grade materials continues to rise, Lithium Universe is positioning itself at the heart of the supply chain with a robust and forward-focused strategy.
