Piedmont's NAM lithium plan taking shape

The company aims to become a leading producer of lithium hydroxide for the US lithium-ion battery market, with an eventual production of 60,000tpa of lithium carbonate equivalent from the Tennessee plant and a similar plant in North Carolina by the end of the decade.Piedmont began generating cash flow from spodumene concentrate production through its participation in the North American Lithium (NAL) joint venture with Sayona Mining in Quebec, Canada earlier this year. The next step of Piedmont's development will see it produce spodumene concentrate from Ewoyaa in Ghana, where it is waiting for approval of a mining lease."Piedmont Lithium wants to be a leading lithium hydroxide producer, focused on the North American battery materials and electric vehicle manufacturing supply chain. Fundamentally, we are interested in manufacturing lithium hydroxide for high energy density, long-range batteries and we want to do that entirely from hard rock resources that we either own and operate, or in which we have a substantial equity interest or economic exposure to," said Brindle.Piedmont believes it is in the right place at the right time, well-positioned to supply the growing North American electric vehicle battery supply chain and qualify for various funding mechanisms made available by the US and Canadian governments.The US$809 million Tennessee project has already been earmarked for a $141.7 million US Department of Energy grant under the bipartisan infrastructure law, and the company expects to qualify for funding under the 2022 Inflation Reduction Act."The Inflation Reduction Act has provided tremendous tailwinds to development stage companies like Piedmont. We look forward to being a fully IRA-compliant manufacturer of lithium hydroxide, both from a benefit to our operations under the 45X programme and for our customers under the 30D clean energy vehicle credit. Lithium hydroxide may not be a big input into those vehicles, but we think our products will meet 30D and 30W requirements," said Brindle.With considerable capital investments in its future, while looking to minimise shareholder dilution, the company may seek to raise the equity component for future project financing packages through the involvement of a strategic partner or investor, perhaps an automotive or battery company. It is working with JP Morgan to assess its alternatives."We are putting the building blocks in place and setting the conditions that will interest potential strategic partners or traditional project finance parties to be willing to invest in the project. We've done that this year with the receipt of our material permits. We'll have a form of EPC agreement ready to go with our construction partner, Kiwit, and their engineering partner, Primero in place by the end of this year or early next year. We'll have our front-end engineering design completed, and we will have purchased the property where the plant should be constructed," said Brindle.QuebecWhile its lithium hydroxide goals are focused on Tennessee and North Carolina, the company is also looking at future possibilities in Quebec, where the provincial and federal governments are promoting the development of a battery minerals supply chain."Our principal mission in Quebec is to demonstrate that the province can be a stable and successful producer of lithium products. … Quebec as a development destination is extremely interesting and should be extremely interesting to a lot of folks who would like to have manufacturing capacity in North America. … Together with Sayona, we have made commitments to the Quebec government about our interest in transformation or lithium conversion in the province over the long term. It makes sense for production from NAL to be converted to value-added products in Quebec," said Brindle.GhanaIn Ghana, Piedmont's partner, Atlantic Lithium, recently signed a memorandum of understanding with the Mining Income Investment Fund of Ghana, which committed to put almost $33 million into Atlantic, including $28 million into the Ewoyaa project for a 6% project stake.Ewoyaa will produce 255,000tpa of lithium carbonate equivalent in spodumene concentrate, of which Piedmont will receive 50%, potentially from late 2025. A mining license application was submitted in October 2022."Piedmont is highly supportive of that effort. We think it's incredibly credentializing for the project and puts a stamp of approval on it from the government side. It demonstrates real interest.Shares in Piedmont Lithium are trading at $38.96, valuing the company at $748 million.

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