Lithium Universe Ltd (ASX:LU7, OTC:ESMAF) is working to address the gap in North America's lithium conversion capacity as well as enhance the supply chain of the key critical mineral.
The company is advancing a mine-to-battery-grade lithium carbonate strategy in Canada through the Québec Lithium Processing Hub (QLPH), which includes a multi-purpose independent 1-million tonnes per annum concentrator and an independent 16,000 tonnes per annum battery-grade lithium carbonate refinery.
LU7 in “favourable position”
Lithium Universe chairman Iggy Tan said, “Despite prevailing lithium market dynamics, Lithium Universe remains committed to building through the lithium market cycle, solidifying its pivotal role within the growing lithium supply chain in North America.
“Leveraging strong tailwinds from the geopolitical shift towards onshoring battery production, the emergence of James Bay as a key lithium jurisdiction, and our strategic approach to addressing the lithium conversion capacity gap, we stand in a favourable position.”
The ‘Lithium Gap’
North America anticipates a surge in battery manufacturing, with more than 20 major manufacturers planning to deploy an estimated 1,000GW of battery capacity.
Canada now holds the top spot in BloombergNEF's Global Lithium-Ion Battery Supply Chain Ranking, signalling its emergence as a significant global supplier of battery materials.
However, bridging the gap between the growing supply of lithium ore and the increasing demand for highly processed lithium carbonate remains a challenge and opportunity.
With strong planned demand for lithium in the United States and a burgeoning spodumene mine supply in Québec and Ontario, the issue lies in the scarcity of independent lithium converters planned for construction in North America, potentially stemming from a lack of expertise or a series of recent failures in the sector.
Over the past decade, numerous lithium conversion plants worldwide have encountered technical and startup challenges. Even established lithium producers have found lithium conversion to be a challenging task.
Lithium Universe estimates that 850,000 tonnes of lithium carbonate equivalent (LCE) per annum will be required to satisfy demand in North America. Currently, there are no operational converters in North America and the company estimates there is only around 100,000 tonnes of planned hard rock converters slated for construction in the region.
The company’s strategy is to bridge this gap by leveraging a proven track record in constructing such converters.
The Lithium Dream Team
Lithium Universe has formed a team, dubbed the 'Lithium Dream Team', comprising experts in hard rock lithium extraction and downstream conversion operations.
Strategic partnerships with engineering consultants Hatch Ltd and Primero Group have also been forged. By leveraging proven technology in spodumene concentration and lithium conversion design, the company aims to minimise execution risk.
Notably, the Dream Team previously spearheaded the successful construction of the Jiangsu Lithium Carbonate facility, surpassing design expectations to produce the world's premier battery-grade carbonate. This project was built by Hatch Ltd.
Lithium Universe intends to replicate the design and operational methodologies implemented at Jiangsu, viewing this, coupled with the expertise of the Dream Team, as pivotal in establishing conversion capacity in North America.
Emerging James Bay supply
Lithium Universe has engaged with numerous exploration entities operating within the region of James Bay, Québec, and estimates there are more than 40 companies dedicated to lithium exploration in the area.
Its assessments indicate a cumulative lithium resource exceeding 500 million tonnes at +1% lithium oxide across eight distinct projects — an increase of more than 100% within the last 12 months.
This significant increase is due to the upgraded resource of 110.2 million tonnes at 1.3% lithium oxide by Arcadium Lithium at the James Bay Project, the maiden resource of Patriot Battery Metals at Corvette of 109 million tonnes at 1.42% lithium oxide and most recently the announcement of Winsome Resources' 59 million tonnes at 1.12% lithium oxide resource at its Adina Project.
Despite these advancements, the James Bay region remains relatively underexplored compared to more established lithium industries, such as those in Western Australia. The company anticipates continued globally significant discoveries and resource upgrades in the region in the years ahead.
“The genuine prospectivity of James Bay, combined with its active exploration scene, presents a promising supply opportunity for our company's proposed lithium carbonate refinery.”