Canada’s Rock Tech Lithium (TSX-V: RCK) and Germany’s Bilfinger SE will work together on building Europe’s first lithium converter and refinery in a push to meet the region’s increasing demand for electric vehicles (EVs).
The Canadian miner and the German industrial services provider have signed a memorandum of understanding to build the lithium hydroxide converter for Rock Tech’s planned battery-metals facility in Guben, southeast of Berlin, the companies said.
Refineries are needed to convert the lithium oxide found in spodumene rock deposits into battery-grade chemicals. Having a local smelter would allow Europe to avoid some of the complex logistics involved in shipping what is a highly corrosive substance that reacts violently with water.
Markus Brügmann, CEO of Rock Tech Lithium, said in a separate statement that the cooperation agreement was “another significant milestone for Rock Tech Lithium on its way to becoming a leading clean-tech company supplying the automotive industry with high-purity lithium hydroxide.”
The company, which announced the construction of Europe’s first lithium refinery in October last year, plans to largely source the ore for the German factory from its own spodumene mine in Georgia Lake, Ontario.
Bilfinger will overtake engineering services and, in the event the project is realized, procurement services and construction management, it said in the statement.
The plant will be in the town of Guben, southeast of Berlin, which is located a roughly 90-minute drive from where Tesla is building its gigafactory.
Several carmakers and battery cell players, including tesla, Volkswagen and China’s CATL, are expanding production capacity in Europe’s top economy as they bank on an expected mass roll-out of EVs.
The converter-refinery project in the town of Guben has initial capital costs of $560.2 million and is estimated to produce revenues totalling $7.6 billion over the 20-year projected life. The project has a payback period of 64 months.
Nameplate annual production will be 24,000 tonnes of lithium hydroxide from approximately 178,000 tonnes of spodumene concentrate sourced from multiple third parties. By-products including alumino-silicate, gypsum and sodium sulphate will also be produced.
The converter is expected to start operations in 2024, the companies said.
Backed by venture capitalist Peter Thiel, Christian Angermayer and hedge fund billionaire Alan Howard, Rock Tech is also preparing a Nasdaq listing to broaden its investor base and help finance the refinery, people familiar with the matter told Bloomberg last year.
(With files from Bloomberg)