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Saudi Arabia is planning a second lithium processing facility, because it steps up efforts to work with western companions to develop its battery provide chain.
The power, which is able to use feedstock mined in Austria to supply refined lithium hydroxide for BMW, is an indication of how provide chains to course of the metallic are slowly growing exterior China.
China accounts for almost 60 per cent of worldwide processing for lithium, a essential ingredient in electrical automobile batteries — and the EU and US are bolstering incentives to create extra capability.
Australia-listed lithium start-up European Lithium and the Saudi industrial conglomerate Obeikan Funding Group will every take a 50 per cent stake within the plant. The power will value $350mn-$400mn and can in all probability produce its first lithium hydroxide in 2026.
European Lithium will provide the processing plant with lithium ore, often known as spodumene, from its mine in southern Austria.
“Lots of the world is fearful about what would occur if China switched off its [lithium] exports,” mentioned Tony Sage, govt chair of European Lithium. “It could be a catastrophe for the vitality transition.”
For Saudi Arabia, the mission is the most recent in a collection of offers geared toward boosting its function in electrical car manufacturing and the battery provide chain — a part of broader efforts to diversify past oil revenues.
Earlier this yr Saudi Arabia signed an settlement with EV Metals, an Australian battery producer, to develop a lithium hydroxide plant that will probably be in manufacturing in 2026.
Lithium processing is extremely vitality intensive and Sage mentioned Saudi Arabia was a lovely location for a processing facility due to its low cost vitality.
Saudi Arabia goals to supply 500,000 autos a yr by 2030, together with these produced within the nation by US-based Lucid Motors, wherein its sovereign fund the Public Funding Fund acquired a majority stake.
Lucid, which has struggled over the previous few years, mentioned on Wednesday it could elevate $3bn in a inventory providing, with 60 per cent of the funds coming from the PIF.
The wealth fund, which is chaired by Crown Prince Mohammed bin Salman, has additionally began its personal electric-vehicle producer, Ceer, which is planning to supply 170,000 autos a yr, along with Foxconn and BMW.
The lithium hydroxide produced by the European Lithium facility will probably be offered to BMW as a part of an current provide settlement. European Lithium will present 9,000 tonnes of lithium hydroxide yearly to the carmaker from 2027.
Even whereas the west has been scrambling to safe lithium sources, costs for the metallic are down almost 50 per cent because the starting of this yr — though they’re nonetheless above the common of the previous three years.
European Lithium mentioned its whole capex wants for constructing its Austrian mine and close by ore concentrator, in addition to growing the Saudi plant, can be between $800mn and $900mn. It’s planning a secondary itemizing on Nasdaq through a particular objective acquisition firm, or clean cheque merger, within the coming months.
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