Mining Technology

Daily Newsletter

08 August 2023

Daily Newsletter

Lithium Australia signs deal with MinRes for lithium extraction technology

MinRes will solely fund the development of a proposed pilot facility and an engineering study for a demonstration plant.

Lithium Australia has signed an agreement with mining company Mineral Resources (MinRes) to form a joint venture (JV) related to its LieNA disruptive lithium extraction technology.

As part of the agreement, MinRes will solely fund up to A$4.5m ($2.95m) for the development and operation of a proposed pilot plant and an engineering study for a demonstration plant.

The company will also be responsible for the supply of raw materials needed to support the extraction process at no cost.

For its part, Lithium Australia will contribute its patented disruptive lithium extraction technology, LieNA, and manage the pilot plant’s production process.

The technology has the potential to enhance lithium extraction yields by up to 50% compared with current market performance.

In a press statement, Lithium Australia said: "On successful completion of the pilot plant operations and engineering study, MinRes’ convertible note will convert into equity in a new joint venture (JV), which will be equally owned by MinRes and Lithium Australia.

The JV will own and commercialise the LieNA technology through a licensing model. The technology will be licensed to third parties at a target headline gross product royalty rate of 8%.

Lithium Australia said in a statement: “The royalty model materially expands Lithium Australia’s addressable market as it has the potential to capture a fee on all tonnage processed via any mine utilising the LieNA technology.”

The LieNA technology is initially to be licensed to a larger demonstration plant, which MinRes can choose to independently fund, develop and operate.

Lithium Australia CEO Simon Linge said: “MinRes is the perfect partner to complement our leading lithium extraction technology, given its extensive owned operations and strategic movement downstream into the battery materials sector.”

ESG 2.0 marks a shift towards stricter environmental rules

ESG is moving into a different era, which we call ESG 2.0. While ESG 1.0 was driven by voluntary corporate action, spurred by pressure from activist consumers and investors, ESG 2.0 is being driven by a new wave of government policies. The EU has taken the regulatory lead, with rules introduced or in the pipeline that will price emissions, regulate the use of the terms ‘ESG’ and ‘sustainability’ in marketing materials, and make ESG reporting mandatory. The US has taken a different approach, favoring less regulation and more financial support in the form of tax breaks for clean industry (renewables plus nuclear and hydrogen). China is planning to expand its emissions trading system to more sectors, decarbonize its heavy industry, and ramp up its use of renewables. The new policy direction is mainly motivated by the ambition to hit net zero emissions targets. But on top of this, governments are now competing for clean industry and trying to challenge China’s leadership on the production of the world’s green technologies such as solar panels and batteries, as well as the production and refinement of materials needed for energy transition such as lithium. These driving forces are leading to policy that will impact every sector, not just heavy industry, and will keep ESG near the top of the regulatory agenda over the longer term.