Lithium Australia Ltd (ASX:LIT, OTC:LMMFF) has strengthened its relationship with Korea’s SungEel HiTech Co., Ltd by signing a non-binding MoU for a potential Mixed Metal Dust (MMD) offtake deal and possible expansion of recycling capability and capacity.
The company’s wholly owned subsidiary Envirostream Australia Pty Ltd has entered into a sales and purchase contract with SungEel to facilitate sales of MMD, also known in the industry as Black Powder, while the offtake agreement is being finalised.
“Critical to strategic roadmap”
Securing strong MMD offtake agreements is a key pillar to Lithium Australia’s strategic target to scale the company’s recycling operations and the company hopes that the MoU will lead to a joint development agreement (JDA) with SungEel enabling an expansion of Envirostream’s recycling capability and capacity.
Lithium Australia CEO and managing director Simon Linge said: “Signing MMD offtake agreements is critical to Lithium Australia’s strategic roadmap, as it demonstrates the company’s ability to secure additional MMD customers as the collection volumes of LIBs continues to scale.”
About SungEel HiTech
SungEel HiTech, a leading South Korean battery recycler with global operations, is an existing customer of Lithium Australia and has purchased most of Envirostream’s MMD with sales in excess of 300 tonnes since the start of 2020.
It operates various Hydro Centres, which utilise hydrometallurgy to extract high-purity battery materials from MMD.
SungEel operates recycling plants in South Korea, Hungary, Poland, India and Malaysia and has announced planned investments in the USA, Spain and Germany to expand its global footprint.
The relationship between SungEel and Lithium Australia is important to the company, and the signing of an MoU intends to extend and formalise the existing relationship between the two.
“Valued long-term partner”
"The MoU signed with SungEel is very exciting for the growth of the company’s recycling operations. SungEel is a global leading battery recycler with hydrometallurgical capabilities, which requires MMD as an input material for the extraction of high-purity battery materials,” Linge said.
“We look forward to formalising our relationship with SungEel, a valued long-term partner of Lithium Australia.”
The MoU between Lithium Australia and SungEel is intended to progress discussions on MMD offtake, with execution of an offtake agreement expected to be completed by June 30, 2024.
Towards a JDA
Both parties will then progress discussions towards entering into a JDA, including investment by the end of 2024, focused on upgrading recycling equipment and expanding total processing capacity of Envirostream.
As Envirostream secures additional lithium-ion battery (LIB) supply through recycling servicing agreements with EV and ESS manufacturers, there will be an associated uplift in MMD production.
An MMD offtake agreement with SungEel ensures that increased LIB processing will be matched with MMD demand.
Partnering with major companies
SungEel HiTech vice president of Sales & Marketing Paul Yum said: “This collaboration is consistent with the key framework for strengthening the global recycled materials supply chain, and we plan to continue to make stronger partnerships with major companies in various regions, while building up strategic collaborations, which includes securing end-of-life batteries and cooperation in recycling technologies.
"We look forward to working with Lithium Australia and Envirostream to contribute to the carbon-neutral energy transition in Australia.”