Core Lithium has decided to proceed with the construction of its Finniss project in the Northern Territory, the Australian lithium explorer said on Thursday, and also planned to create 250 jobs for the operations.
Finniss is the first lithium mine in the Northern Territory and the commissioning of a separation process plant is scheduled for the fourth quarter of fiscal 2022, the company said.
Lithium miners are set to benefit from soaring prices for the raw material used in electric vehicle batteries as demand recovers from the pandemic fallout, according to filings made by Australian firms earlier this year.
“The project and a final investment decision (FID) are underpinned by high-grade lithium deposits that have the potential to support long-term lithium supply from northern Australia,” Managing Director Stephen Biggins said in a statement.
In July, the miner reiterated its capital expenditure forecast of A$89 million ($64.60 million) for the project with a targeted average production of 173,000 tonnes per annum of high-quality lithium concentrate.
The project is fully funded after Core Lithium successfully conducted multiple placements over the year to raise more than A$250 million from institutional investors.
Ganfeng Lithium, one of the world’s largest lithium producers by market value, has signed a four-year offtake agreement with Core Lithium and agreed to provide A$34 million in new equity, subject to Chinese government approvals.
About 80% of Finniss’ initial output is covered under the offtake agreement with Ganfeng and Sichuan Yahua, a key lithium supplier to U.S. electric carmaker Tesla Inc .
($1 = 1.3778 Australian dollars)
(By Tejaswi Marthi; Editing by Sherry Jacob-Phillips)