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(Kitco News) - Piedmont Lithium (Nasdaq: PLL) today reported the results of a definitive feasibility study ("DFS") of the company's proposed Tennessee Lithium project in McMinn County, Tennessee.
The company said that the DFS study economics of the 30,000 metric ton per year lithium hydroxide plant are highlighted by an estimated after-tax NPV (8% discount rate) of $2.5 billion and an after-tax IRR of 32% for the 30-year project, with average annual steady state EBITDA and after-tax cash flow of $376 and $317 million, respectively. Payback from start of operations is 2.8 years.
The study assumes fixed prices of $26,000 per metric ton of lithium hydroxide and $1,600 per metric ton of spodumene concentrate over the project's 30-year life.
Importantly, Piedmont pointed out that the model includes a Section 45X production tax credit of 10% under the Inflation Reduction Act of 2022 and assumes a credit of $141.7 million against project capital costs based on expected receipt of a U.S. Department of Energy grant.
"The Tennessee Lithium DFS study results demonstrate a robust technical and financial case for Piedmont to establish a merchant lithium hydroxide manufacturing business in the United States using spodumene concentrate from market sources, including the existing offtake agreements secured by the company in 2021," the company said in a statement.
President and CEO Keith Phillips noted he was "pleased" with the project economics and the positive impact of the Inflation Reduction Act, "which strongly favors domestic battery and critical minerals production."
"Tennessee Lithium is positioned to be a key resource for EV and battery manufacturers," Phillips added. "Through long-term supply agreements with our partners, we can source raw material from spodumene that we own or in which we have an economic interest, providing greater control of our feedstock while capturing the economics of integrated production."
Piedmont said it is advancing permitting and project financing activities for Tennessee Lithium with the goal of beginning construction in 2024, adding that the company is focused on first commercial shipments in Q3 from North American Lithium with revenue generation to support activities across Piedmont's global portfolio of projects, including Tennessee Lithium.
A DFS is expected mid-2023 for the Ewoyaa Lithium project in Ghana, which is expected to be the primary feedstock for Tennessee Lithium, while Carolina Lithium continues to advance through permitting and approvals processes.
Piedmont Lithium is developing a world-class, multi-asset, integrated lithium business focused on enabling the transition to a net zero world and the creation of a clean energy economy in North America. The company's goal is to become one of the largest lithium hydroxide producers in North America.
Piedmont's projects include its Carolina Lithium and Tennessee Lithium projects in the United States and partnerships in Quebec with Sayona Mining and in Ghana with Atlantic Lithium.
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