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With the shortage of raw materials for manufacturing lithium batteries, Australia's unique mining resources have also attracted the covetousness of technology giant Tesla, and the four kings who have obtained Tesla contracts in the companies currently listed on the Australian Exchange are lithium ore suppliers LTR, PLL and CXO, graphite supplier SRY, and the following will make a basic introduction and analysis of these four major companies.
Liontown Resources Limited (ASX:LTR) currently includes three wholly-owned battery metal projects, namely the Kathleen Valley Lithium Project in Western Australia, the Buldania Lithium Project, and the Toolebuc Vanadium Project in north-west Queensland. Among them, the DFS released by the Kathleen Valley Lithium Project in Western Australia shows that the basic output of the project has increased from 2 million tons / year to 2.5 million tons / year, and the annual output is about 500,000 tons / year. The company also plans to expand to 4 million tons/year in the sixth year, with an annual production capacity of about 700,000 tons of pyroxene concentrate. In terms of costs, Liontown revealed that the initial capital cost of its project is estimated to have increased to $473 million. Meanwhile, the Company estimates the project's after-tax net present value (NPV) of $4.2 billion, a repayment period of 2.3 years and an after-tax mine service life (LOM) free cash flow of $12.2 billion.
In addition, the first production is expected to begin in the first half of 2024, a full year ahead of schedule. LTR has signed an off-offer letter of intent with LG Energy Solutions (LGES), one of the world's leading battery manufacturers. When operational in 2024, Liontown is expected to supply LGES with up to 150,000 metric tons of spodumene concentrate per year, representing approximately one-third of the approximately 500,000 tons/year SC6.0 (grade 6%) spodumene concentrate capacity at the start of the project. LTR also signed a legally binding agreement with Tesla for sale and purchase. The initial five-year agreement between the two parties is expected to enter into force in 2024. Liontown will supply Tesla with 100,000 metric tons of spodumene concentrate in its first year, and since then the annual supply has increased to 150,000 metric tons.
Piedmont Lithium (ASX: PLL) is an emerging lithium company founded in Australia in 1983. The company focuses on the development of its wholly-owned Piedmont lithium project in North Carolina, USA. Located in one of the world's major areas for lithium exploration, the Piedmont Lithium Mine Project is geologically and geographically accessible to infrastructure, electricity, lithium battery storage and proximity to research and development centers in high-tech population centers. The company is also the largest shareholder in another public company, SYR, with mines in Quebec, Canada, adjacent to the continental United States, and no sea transportation required. The company also has highly potential lithium projects in Africa. PLL won Tesla's supply contract as early as 2020, and the company also completed the dual listing layout of the NASDAQ main listing and the ASX depository listing in 2021. The latest announcement shows that PLL partner Atlantic Lithium has completed an update to the Mineral Resource Estimates for the Ewoyaa Project.
The Ewoyaa Project has an estimated Mineral Resource of 30.1 million tonnes at an average grade of 1.26% lithium oxide, a 42% increase from previous estimates. It should be noted that although PLL's project in the United States has long been authorized by the US federal government, the local government in the area where the mine is located has been slow to issue a certificate, and is still waiting for the implementation of the final mining license, which is also the key to the suppression of the general direction of the stock price.
Core Lithium Ltd (ASX:CXO) is committed to the production of lithium through the development of the Finniss Lithium Project in Darwin, Northern Territory, Australia. The company's main projects are located in the southern part of the Port of Darwin in the Northern Territory, where the company also owns the Jervois Copper Project, the Blueys and Inkheart Lead/Silver Project, the Yerelina Zinc Project in South Australia, and napperby's Uranium Project, the Fitton Uranium Project. The Northern Territory Government officially approved CXO's Finniss Project Mine Operation Plan in 2020. In March 2021, the federal government granted the Finniss project "Major Project Status" (MPS). This marks the Government's recognition of the strategic importance of the project to Australia and provides CXO with additional support from major project facilitation agencies, including a $6 million Modern Manufacturing Initiative (MMI) grant from the federal government. In mid-2021, COX completed the Final Feasibility Study (DFS) for the project.
The results show that Finniss can achieve a high-grade concentrate production of 173,000 tonnes/t at a direct cash cost (C1 cost) of US$364/t for 8 years. One of the main advantages of the project was that CXO included a simple heavy media beneficiation (DMS) processing plant in the project design, enabling it to produce high-grade lithium concentrate through a simple DMS re-separation process, which used only gravity and water in the process, DMS was able to save two-thirds of the cost, and avoided higher flotation operating costs and processing risks, which made the CXO project start-up cost of only $89 million and the payback period of only two years, which was very obvious.
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author:
Xavier Zhang | Professional analyst at GO Markets