Lithium price toils see processing technology JV still searching for best answers

Australian miners Livium and Mineral Resources (Min Res) will continue to examine routes to commercialising their Liena lithium processing technology. But price weakness has contributed to an eight-month postponement of the repayment of the latter’s loan to the project, albeit Livium CEO Simon Linge is still optimistic for the project's future.

The two firms have achieved the development and operation of a pilot plant, successful refinement of high-quality lithium phosphate and completion of a demonstration plant engineering study.

But “considering current lithium market conditions”, they will now undertake additional activities to optimise the development of the Liena technology, including an assessment of alternate commercialisation pathways and the selection of the preferred lithium product for its development, encompassing the potential to produce battery grade lithium carbonate. Lithium prices have fallen by more than 85pc over the last two years from a late-2022 peak.

"Very much a position that [Min Res] could have taken... given the current lithium price environment, is let us pause," Linge told the Proactive Investors news channel. "But they were really keen, as were we, to continue to advance the technology, which I think shows the potential."

To allow further activities — which the firms are calling Stage 1A and will be funded through the remaining balance of Min Res’ convertible note and R&D tax incentive rebates received earlier this month — to be completed, the firms have agreed to extend the maturity date of Min Res’ convertible note deed from its original date of 31 January to 30 September 2025.

Liena is a process that aims to eliminate the need for high-temperature conversion of spodumene. Fine spodumene reacts with caustic soda in an autoclave to form lithium sodalite, from which lithium can be readily recovered via selective leaching in weak acid. Livium’s overall proposition is to produce lithium chemicals from what are currently waste or low-grade lithium minerals and concentrates.

Decision to make

Should Stage 1A activities complete successfully, Min Res’ note will convert into equity in a new joint 50:50 venture (JV) between the two firms that will own the Liena technology, which currently belongs solely to Livium. But if Stage 1A Activities are not completed successfully and Min Res elects not to convert to equity, then the JV entity will pay Min Res 50pc of the value of the Liena technology, as agreed by a third-party expert, as repayment of the note.

The JV plans to license the Liena technology to third parties at a target headline gross product royalty rate of 8pc. The royalty model is intended to expand Livium’s addressable market through the potential to capture a fee on all tonnage processed via any mine utilising the Liena technology.

"When we sat down and agreed the pathway in August '23, the world was in a very different place," says Linge. "But we also had a very rigid view about how we would upscale the technology.

"We might be able to accelerate that pathway; we might be able to scale the technology in a different way; and it gets us to a commercial outcome sooner rather than later," he continues.

On successful completion of Stage 1A Activities, the JV intends to initially license the technology to a semi-commercial facility, which Min Res can elect to independently fund, develop, and operate. The larger plant will aim to extract lithium salt at commercial scale.

The royalty payable by Min Res for its licence to use Liena technology in his and future projects will be a a discount to the headline 8pc rate above “in acknowledgement of Min Res’ first mover position”.

“Whilst lithium market conditions have tightened since our partnership with Min Res commenced, the progress made in Stage 1 Activities has given Livium and Min Res the confidence to undertake further work to optimise the commercialisation pathway,” says Linge.

“What we have seen Livium deliver as part of the Stage 1 piloting activities has been very positive for the Liena technology. We are excited to continue our partnership with Livium throughout Stage 1A Activities under the adjusted JDA to help us understand the technology’s potential breadth and optimise the development and commercial pathway," Min Res adds.