Economy 18-04-2024 13:01 4 Views

Piedmont Secures Mining Permit for Carolina Lithium Project

Piedmont Lithium (NASDAQ:PLL,ASX:PLL), one of North America’s leading lithium suppliers, announced on Monday (April 15) that the North Carolina Department of Environmental Quality (NCDEQ) has given its stamp of approval for the company’s US$1.2 billion mining and processing plant project in Gaston County.

“This is an exciting day for all of us at Piedmont Lithium. I would like to thank the leadership and staff at NCDEQ and (the Division of Energy, Mineral and Land Resources) for their diligence in the process, as well as the members of our team who worked rigorously for more than two and a half years to ensure that every aspect of the Project met the state’s high standards for approval,” Keith Phillips, the company’s president and CEO, said in a press release.

The permit allows for the construction, operation and reclamation of the proposed project, with the Belmont-based company planning to develop Carolina Lithium as a key part of the US supply chain for electric vehicles (EVs).

“We plan to develop Carolina Lithium as one of the lowest-cost, most sustainable lithium hydroxide operations in the world, and as a critical part of the American electric vehicle supply chain. The Project is expected to contribute billions of dollars of economic output and several hundred jobs to Gaston County and North Carolina’s growing electrification economy,” Phillips added, noting that he sees the asset as ‘a highly strategic project.’

The open-pit lithium mine, which will resemble a quarry, is slated to delve as deep as 500 feet, with daily blasting routines. The company expects to recruit over 400 staff members for the commencement of operations.

Carolina Lithium is set to be a low-cost producer of spodumene concentrate and lithium hydroxide, and will benefit from favorable infrastructure, minimal transportation distances and access to local markets. It is also slated to be one of the lowest-cost and most sustainable lithium hydroxide operations globally, according to the company.

Shares of Piedmont spiked more than 35 percent on the Nasdaq after Monday’s news. With the mining permit approval for Carolina Lithium now in hand, it will proceed with the county rezoning process, engaging with the local community and authorities. Construction will start upon receipt of all necessary permits, rezoning approvals and financing.

According to Reuters, this week’s milestone for Piedmont comes after local opposition to Carolina Lithium, as well as a low lithium price environment. The company is also facing competition from major lithium miner Albemarle (NYSE:ALB), which is making strides toward reopening a lithium spodumene mine in a neighboring North Carolina County.

Piedmont’s North American Lithium joint venture, which is focused on Québec, Canada, began production last March, receiving its first revenue from shipments in the third quarter of 2023. The company signed a supply deal for North American Lithium with EV maker Tesla (NASDAQ:TSLA) in 2020, and amended the agreement in January 2023. As it stands, Piedmont has agreed to deliver approximately 125,000 metric tons of spodumene concentrate to Tesla from H2 2023 to the end of 2025. Tesla has the option to extend the arrangement for another three years.

US pursuing EV supply chain initiatives

As the world shifts toward clean energy, the US is gearing up to play a larger role in the North American lithium supply chain, crucial for powering the EVs and electronics of the future. Traditionally reliant on imports, primarily from Chile, Argentina and Canada, the country is looking to develop its own lithium resources to bolster energy security.

Recent estimates from the US Geological Survey suggest substantial lithium potential within the country, positioning it as a key contender in meeting both domestic and global lithium demand.

Furthermore, initiatives such as the Clean Energy Minerals Reform Act, spearheaded by New Mexico Senator Martin Heinrich, aim to address regulatory challenges and ensure responsible mining practices.

Aside from that, the Biden administration is continuing its push to strengthen America’s critical materials supply chain, recently announcing a large loan for Lithium Americas (TSX:LAC,NYSE:LAC) subsidiary Lithium Nevada.

Last month, the US Department of Energy’s Loan Programs Office issued a conditional commitment for a US$2.26 billion loan to support the construction of a lithium carbonate processing plant at Thacker Pass in Nevada. The loan is contingent upon the completion of environmental reviews and regulatory requirements.

The project, situated adjacent to the largest-proven lithium reserves in North America, aims to produce about 40,000 metric tons per year of battery-grade lithium carbonate for use in lithium-ion batteries.

Supported by an equity investment from General Motors (NYSE:GM), Thacker Pass could supply enough lithium carbonate to power up to 800,000 EVs annually, significantly reducing gasoline consumption.

A Bloomberg article published at the time notes that the move from the US government highlights its commitment to developing the country’s EV supply chain, but also underscores potential opposition to the project.

Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.

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