Lithium Australia
(ASX:LIT) has announced a significant joint development agreement with leading ASX-listed mining company Mineral Resources Ltd (MinRes) related to their innovative lithium extraction technology, LieNA®.
MinRes, with a market capitalisation of approximately A$13.6 billion, is known for its extensive mining operations in Western Australia, including lithium and iron ore. The agreement will see MinRes solely fund the development and operation of a pilot plant, along with an engineering study for a demonstration plant, with a budgeted cost of A$4.5 million. In addition, MinRes will provide the required raw materials to support the extraction process at no cost to Lithium Australia.
Lithium Australia will contribute its patented LieNA® technology, which has the potential to enhance lithium extraction yields by up to 50% over current market performance. The technology aims to recover lithium from fine and low-grade spodumene, which is typically discarded as waste, thereby improving mining efficiency, sustainability, and profitability.
Upon successful completion of the pilot plant operations and engineering study, MinRes' convertible note will convert into equity in a new joint venture between MinRes and Lithium Australia. The joint venture will wholly own the LieNA® technology and plans to license it to third parties at a target headline gross product royalty rate of 8%. This licensing model significantly expands Lithium Australia's addressable market, allowing them to capture a fee on all tonnage processed via any mine utilising the LieNA® technology.
Furthermore, the joint venture will license the LieNA® technology to a larger demonstration plant, which MinRes can elect to independently fund, develop, and operate. The larger plant aims to extract lithium salt at a commercial scale under the licence. Early target jurisdictions for licensing include Western Australia and North America, with potential expansion into Europe and Africa.
Lithium Australia's Chief Executive Officer, Simon Linge, expressed excitement about the partnership with Mineral Resources, highlighting MinRes' extensive owned operations and strategic movement in the battery materials sector. He emphasised that securing a development partner is a significant step in Lithium Australia's roadmap and validates their patented technology. Linge looks forward to licensing their proven high-value technology to existing and new lithium mines across Australia and the world.
The joint development agreement between Lithium Australia and Mineral Resources marks a crucial milestone in the advancement of innovative lithium extraction technology, paving the way for potential industry-wide application and long-term growth opportunities.
