Lepidico, Desert Lion merger to accelerate production of lithium hydroxide

Australian Lepidico Ltd agreed earlier this month to acquire Desert Lion, a junior miner with mining operations in Namibia, to create an integrated lithium business.

The merged company will be named Lepidico Ltd and will combine Desert Lion’s Rubicon and Helikon lepidolite deposits in Namibia alongside the partially developed lepidolite concentrator with Lepidico’s L-Max and LOH-Max technologies which will be used to process lepidolite concentrate into lithium hydroxide.

“The merger between Desert Lion and Lepidico is set to accelerate our entry into the lithium chemical market by combining our lepidolite resources in Namibia with Lepidico’s technology and expertise in producing lithium hydroxide from this type of lithium source,” Desert Lion told Fastmarkets.

The two companies expect to start a feasibility study to establish mineral reserves and determine the economic and technical viability of production once the merger is complete in July.

“The closing of these transactions announced today will be transformative for Lepidico. They will allow it to advance its technologies and projects, demonstrate the commercial viability of L-Max and LOH-Max, and hopefully become a globally significant, vertically integrated lithium chemical producer,” Joe Walsh, managing director at Lepidico, said in a press release.

In terms of the company’s lithium hydroxide consumers, battery materials manufacturer BASF SE has a non-binding offtake agreement for lithium hydroxide with Desert Lion and this could be the first customer of Lepidico once production starts.

Lepidico has an offtake agreement with Mota Ceramic Solutions which operates the Alvarroes lepidolite mine in Portugal. Mota Ceramic Solutions produces 20,000 tpy of lithium minerals, predominantly lepidolite.

“It is too soon to say when we will start commercial-scale production of lithium hydroxide, but as soon as we start production we will be aiming at supplying our offtake partner,” Desert Lion said.

Desert Lion operations in Namibia had been set to produce 160,000 tonnes of lithium concentrate through phase 1 of operations which had been planned to last between 2018 and 2019. The second phase of Desert Lion operations was set to start in the first quarter of 2020 and to increase production to 250,000 tonnes lithium concentrate.

The company stopped production in September 2018 due to the lower spodumene prices.

Fastmarkets assessed the spodumene, min 5-6% Li2O, cif China, price at $600-700 per tonne on April 24, down by 30.48% from $900-970 per tonne in May 2018.

Lepidico is commissioning its phase 1 pilot plant to be developed in stages, anticipating a production capacity of 5,000 tonnes per year of lithium hydroxide once fully ramped up. No time frame was given for the pilot plant commissioning period.

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