Neometals, Kalgoorlie lithium hydroxide refinery in Australia is part of the company's strategy to realise maximum value from its lithium feedstocks and targeted for applications in EVs and energy storage, among others. (Image courtesy - Neometals)

India's third largest power trading company, Manikaran Power has signed an MoU with Australia's Neometals to jointly fund the evaluation of developing the first lithium refinery in India.

The JV will see partners bring their respective skills, resources and know-how towards achieving a positive outcome from the evaluation activities and will also share costs equally. Upon completion of the feasibility analysis, and subject to agreement on terms, a final investment decision will be considered for a 50:50  JV to progress and develop the lithium refinery.

A final investment and formal JV commitment would see Neometals contributing to the venture its ‘life-of-mine’ offtake option volume (i.e. up to 57,000-tonne per annum of 6 percent spodumene concentrate) retained as part of its Mt Marion equity sale agreement. Additional spodumene feed would be sourced as required from external sources to meet the lithium refinery’s needs depending on its nameplate capacity.

As per the announcement, once the JV is formalised, Manikaran will take the lead role in procuring project financing for not less than 50 percent of the capital expenditure required, securing regulatory approvals and Indian government subsidies (as available), securing a suitable site for the lithium refinery, and securing necessary utility and reagent supplies. Neometals says this MoU is a significant step in its downstream lithium processing strategy, which allows the realisation of value from its offtake option to participate in higher value, higher margin lithium chemical production for electric vehicles, stationary energy storage and a more sustainable future.

The partners estimate that the feasibility analysis will be completed in about 18 to 24 months, with a formal announcement on whether to proceed with a potential JV likely in the first half of 2021. Neometals previously completed a capital cost study on a proposed lithium refinery operation in Kalgoorlie, Australia, which indicated a higher than anticipated capital intensity for the 10,000-tonne lithium-hydroxide capacity.