Galaxy Contracts to Buy Spodumene from Talison

Galaxy Resources Ltd of Australia has announced that it has achieved commercial production of 99.9% purity lithium carbonate at its plant in Jiangsu, China. The Jiangsu plant was originally designed to produce 17,000 tonnes/year of battery grade lithium carbonate (minimum 99.5% purity) making it the largest battery grade producer in the world. However, the company says that recent adjustments and improvements to the process have allowed the Jiangsu plant to produce a 99.9% pure product. Lithium carbonate of minimum 99.9% purity, registered by Galaxy as EV Grade, is used specifically in the manufacture of electrolyte solution for lithium-ion batteries. Up until now, the Jiangsu plant has produced battery grade (99.5% Li2CO3) lithium carbonate, which is used in the cathode part of the batteries. EV Grade currently accounts for 5-10% of the overall battery grade lithium carbonate market but commands a price premium of 20-30% to battery grade due to the higher purity specification and limited global supply. While the main future demand for lithium carbonate will come from cathode producers, Galaxy thinks that the ability to produce higher purity grades will give it more marketing options. Iggy Tan, Galaxy’s managing director, said, “The ability to produce EV Grade product extends Galaxy’s potential customer base, allowing the company to tap into growth in both the cathode and electrolyte markets. Although, it’s a smaller market, the higher price EV Grade makes it a valuable product to add to our mix, and we will determine how much of each product to produce based on demand levels from our customers.” Galaxy has also signed a three-year spodumene feedstock contract with Talison Lithium Ltd to supply the Jiangsu plant. Galaxy will purchase the Talison feedstock in U.S. dollars from Talison’s Greenbushes mine in Western Australia. The company says that spodumene can be delivered from Greenbushes at a better rate compared with the costs of a full reinstatement of Galaxy’s Mt Cattlin operation near Ravensthorpe, Western Australia. The supply contract is expected to commence in July 2013, after existing stockpiles at Jiangsu have been depleted. Iggy Tan, Galaxy’s managing director, said, “Given the current exchange rate and the adverse impact on local operating costs, it is financially a better option to purchase external spodumene today instead of resuming operations at Mt Cattlin. The Talison Greenbushes mine has the benefit of a threefold head grade and greater capacity compared to Mt Cattlin, and can better weather the impact of the high Australian dollar. “Mt Cattlin has produced many thousands of tonnes of spodumene and is a strong and stable operation that can easily be brought back online when required. The operation reached 95% of design output in May 2012 just before it was placed in suspension due to inventory build-up. Unfortunately, the current high Australian currency has put a lot of pressure on Australian producers and exporters. “Galaxy believes Mt Cattlin is a valuable strategic asset for the company and purchasing external spodumene maintains Mt Cattlin’s resource base without further depletion. Mt Cattlin remains an important security of feedstock supply for the company.” Galaxy is also developing a lithium pegmatite project in Quebec and the Sal de Vida lithium and potash brine project in Argentina.

Volume 27 issue 6

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