Slightly more than a month after orchestrating the return of Lithium Universe Ltd (ASX:LU7) to the Australian Stock Exchange, its chairman and lithium visionary Iggy Tan has painted a bold vision for the company and for the Quebec region of Canada.
His vision? Establishing a vertically integrated lithium processing hub by bringing together junior lithium exploration companies operating in the James Bay area to position Canada as a major supplier of lithium to the global market.
Dubbed the Quebec Lithium Processing Hub (QLPH), Tan envisions the setting up of a multi-purpose independent 1-million-tonnes-per-annum concentrator to process general run-of-mine (ROM) spodumene ore from the James Bay area.
Shifting landscape
Tan’s plan has been triggered by recent developments signalling a significant change in the Canadian Government's approach to exporting critical lithium spodumene concentrate, particularly to China, for further processing into battery-grade lithium carbonate and lithium hydroxide.
In late 2022, the government instructed Sinomine, a Chinese state-owned firm, to divest its stake from the Canadian company Power Metals Corp and terminate its spodumene concentrate offtake agreement.
Canada justified the decision by citing a thorough "multi-step security review" carried out under the Investment Canada Act, which demonstrated its commitment to enhancing the entire supply chain, including downstream processing, rather than solely exporting spodumene concentrate.
Tan believes that this shift has significant implications for the numerous junior lithium exploration and mining companies operating in Canada.
"The challenges faced by lithium explorers are twofold. It is not enough to simply unearth lithium deposits; a company must possess the expertise and resources to build and operate fully integrated lithium processing and downstream facilities,” he said.
“This includes an intricate understanding of each stage, from extraction, concentration and chemical processing to the final production of battery-grade lithium products."
Iggy Tan.
Meeting a challenge
While there are numerous junior lithium explorers in Canada, few possess the requisite experience and capabilities to successfully develop and implement a fully integrated lithium project, spanning exploration, mining, concentration and the production of battery-grade lithium carbonate or hydroxide.
Each stage demands distinct skills and approaches, making it a challenge to find a single company equipped with this extensive skill set, as evidenced by the previous failures of two fully integrated Canadian lithium firms.
Tan believes that his strategy to foster collaborative growth among junior regional lithium partners could be the answer.
The strategy
The plan will involve a straightforward four-stage crushing and dense media separation plant, similar to the Mt Cattlin Spodumene Mine, that can efficiently process the region's spodumene ROM.
The James Bay area is renowned for its coarse-grain spodumene mineralisation, necessitating only a basic dense media concentration plant.
To supply the QLPH concentrator, LU7 will establish long-term off-take contracts with junior lithium partners capable of providing spodumene ROM ore, helping them generate early cash flow and facilitating their mine development.
An advantage for these junior partners is that the ROM ore transported to the QLPH concentrator will not require primary crushing, thereby eliminating associated crushing capital costs.
Pricing for the ROM ore can be determined based on its lithium content, ensuring attractive returns for the participating mining companies in the region.
This is not unlike the nascent stages of Australia's lithium industry where the sale of spodumene ROM ore was commonplace, allowing companies to mine and sell unprocessed spodumene ore to China and facilitating early developments in their mining operations.
LU7 is targeting a location along the Trans-Taiga highway near local airstrips and with access to renewable electricity generated by the LG-4 hydropower station for the location of the concentrator.
Part of a larger plan
Part of Tan’s strategy also involves supporting the junior partners in the development of their own concentrator facilities through potential joint ventures.
This will be done by replicating the QLPH concentrator model, offering operational expertise and reducing risks for these companies.
Additionally, within this strategy, spodumene concentrate from these concentrators will supply a battery-grade lithium carbonate refinery, the QLPH Li Refinery, which will be modelled after the Jiangsu Lithium Carbonate Plant.
This plant is expected to produce 16,000 tonnes per annum of lithium carbonate and may be situated near infrastructure to simplify operations.
First, the experts
To meet this strategy, Tan has assembled a 'Lithium Dream Team' comprising highly skilled and experienced lithium professionals.
Among the members of the team is Patrick Scallan, an experienced lithium veteran who successfully managed the world-class Greenbushes Mine for more than 25 years.
Alongside Scallan are Terry Stark, who previously served as the general manager of operations for both Mt Cattlin and James Bay projects; Roger Pover, with extensive experience as a plant manager at Greenbushes and Mt Cattlin; and Huy Nguyen, known for his expertise in the design and construction of the Mt Cattlin Mine.
On the lithium carbonate side, Dr Jingyuan Liu, a leading international expert in lithium-downstream processing who helped develop the Jiangsu Lithium Carbonate Plant in China, is joined by John Loxton.
Loxton, a project manager with more than 45 years of experience across a diverse range of energy, industrial, process, civil, and major infrastructure projects, previously worked on the Jiangsu project.
Liu, Stark, Pover and Nguyen have previously held management and executive positions at Galaxy Resources, Tan’s flagship lithium company.
Turning vision into reality
"Our Lithium Dream Team brings unparalleled expertise in spodumene hard rock processing and lithium carbonate production,” Tan said.
“By leveraging our team's knowledge and experience, we are confident in our ability to swiftly establish a vertically integrated lithium processing hub in Québec, Canada.
“The fact that we have a proven track record in building a vertically integrated mine to battery-grade lithium carbonate makes this vision a real possibility.
“This strategic move will not only enhance the value proposition for our company but also support the Canadian government's goals of building a robust lithium industry with a strong domestic supply chain."
About LU7’s Apollo project
LU7 owns 80% of the highly prospective Apollo Lithium Project, about 90 kilometres from the QLPH.
Spanning more than 240 square kilometres, Apollo is in the same greenstone belt and only 29 kilometres southeast of the Corvette Lithium Project owned by Patriot Battery and Winsome Resources Ltd’s Adina Project.
The company intends to conduct comprehensive drilling activities for resource development, and if successful, develop a mine at Apollo.
The QLPH strategy is not dependent upon LU7 discovering a resource at Apollo.
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