Lithium Universe secures prime industrial land for lithium refinery expansion

Company News

by Peter Milios

Lithium Universe (ASX:LU7) has made a significant move in its quest to address the lithium conversion capacity gap in the North American market. The company announced today that it has successfully executed an option agreement to acquire a strategic commercial property within the Bécancour Waterfront Industrial Park (BWIP) in Quebec, Canada.

The acquired site, known as Lot 22 of the Parc industriel et portuaire de Bécancour, spans an estimated area of 276,423 square meters. This acquisition marks a crucial step forward for Lithium Universe's ambitious plans to establish a lithium carbonate refinery in the region.

Closing the Lithium Conversion Gap

The East Coast of North America is witnessing a surge in battery manufacturing, with numerous major players planning substantial capacity expansions. By 2030, states such as Georgia, Kentucky, and Michigan aim to dominate electric vehicle (EV) battery production, requiring significant investments.

To meet this growing demand, North America's EV battery manufacturing capacity is projected to soar from 55 gigawatt-hours in 2021 to nearly 1,000 gigawatt-hours by 2030, necessitating an investment exceeding $40 billion. However, a significant challenge lies in establishing a reliable supply chain, particularly in lithium conversion and processing.

Lithium Universe aims to bridge this gap by leveraging its expertise in constructing lithium converters, with the proposed facility in Quebec playing a pivotal role in meeting the region's burgeoning demand.

Strategic Location and Key Facilities

The selected site within the Bécancour Waterfront Industrial Park offers strategic advantages, including proximity to major highways, railway networks, and international ports. Furthermore, the site benefits from access to low-cost hydroelectric power, making it an attractive location for lithium refining operations.

Additionally, the park hosts several major cathode material factories, including those of General Motors and Ford, further enhancing the region's appeal as a hub for battery manufacturing.

Option Agreement Details

The execution of the option agreement follows the appointment of Hatch Ltd to undertake an engineering study for the design of a multi-purpose battery-grade lithium carbonate refinery. The agreement grants Lithium Universe an exclusive right to acquire the site, subject to regulatory and shareholder approvals.

The purchase price for the site is expected to be $CAD 12.6 million, with additional costs for infrastructure works. The option term spans 36 months, with the company required to pay a monthly fee of $CAD 63,135 to secure the option.

Future Prospects

Chairman Iggy Tan expressed optimism about the acquisition, highlighting Quebec's favorable business environment and logistical advantages. He emphasized the site's potential for future expansion, aligning with Lithium Universe's long-term growth strategy.

This acquisition represents a significant milestone for Lithium Universe as it seeks to bolster North America's lithium conversion capacity and support the region's transition towards electric vehicles.

Peter Milios

Peter Milios is a recent graduate from the University of Technology - majoring in Finance and Accounting. Peter is currently working under equity research analyst Di Brookman for Corporate Connect Research.

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