By Sam Boughedda
Investing.com -- Piedmont Lithium Ltd ADR (NASDAQ:PLL) has completed a Preliminary Economic Assessment (PEA) for a proposed second lithium hydroxide plant.
The company plans to expand its U.S. manufacturing capacity to 60,000 metric tons per year of lithium hydroxide.
They believe they will be able to achieve that target using spodumene concentrate secured under existing supply agreements with Sayona Mining and Atlantic Lithium, and other sources. Spodumene concentrate is used to produce lithium chemicals that go into electric vehicle batteries.
The company said the PEA assumes the lithium hydroxide plant is located at one of the several sites under consideration and also that there is a 30-year life of operations with the production of 30,000 metric tons per year of battery-grade lithium hydroxide.
Projected capital costs for the plant are $572 million. Based on those capital cost assumptions, the PEA projected an estimated net present value of approximately $2.25 billion and an internal rate of return of 33%.
“2021 was a transformative year for electrification in the United States,” said Piedmont President and CEO Keith Phillips.
“Current and forecasted battery manufacturing capacity now exceeds 500 gigawatt-hours (“GWh”) with public announcements of over $25 billion in capital investments to occur by 2025. The potential lithium volume these battery plants will require reinforces the importance of developing a domestic lithium supply chain," Phillips added.
The potential site development still remains subject to various factors, including a final site selection and financing.
Piedmont shares rose 6% Wednesday.