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European Lithium (ASX:EUR, FRA:PF8, OTC: EULIF) has signed a binding agreement for joint development and operation of a processing plant in Saudi Arabia with Obeikan Group to convert lithium concentrate into lithium hydroxide.
The 50:50 joint venture (JV) will be geared towards developing, constructing, commissioning and operating the plant for the conversion of lithium spodumene concentrate from European Lithium’s Wolfsberg, Europe’s first fully permitted lithium mine, located in Carinthia, 270km south of Vienna.
The proposed JV will seek to have an exclusive right to purchase spodumene mined from the current resource at Wolfsberg Zone 1, and the facility is expected to be developed to meet the minimum initial capacity and product specifications based on the company’s binding long term supply agreement with BMW.
Subject to the successful commissioning of the plant, EUR will sell the lithium spodumene concentrate to the JV company at a reduced rate with a floor price of $3,000/tonne and a ceiling price of $7,000/tonne over the life of the current resource of the Wolfsberg mine.
Tony Sage, chairman of EUR said the new facility, once operational, was expected to significantly reduce energy costs and deliver savings in opex, in addition to lower capex, for operations at Wolfsberg.
“This strategic step in partnering with Obeikan paves the way for significant Opex savings including greatly reduced energy and financing costs, and a much lower taxation rate,” Sage said in a news release.
“We look forward to progressing our plans to harness the latest technology in developing a facility of the highest quality and efficiency, in doing so, strengthen the economics of Wolfsberg and our future projects.”
