European Lithium (ASX:EUR) has announced plans to construct a lithium hydroxide plant in Saudi Arabia in partnership with Obeikan Investment Group.
The plant, which will be a 50:50 joint venture, aims to process spodumene concentrate from the Wolfsberg Lithium Project in Austria.
Under the shareholder agreement, a newly formed joint venture company, Arabian New Energy, seeks to have an exclusive right to purchase spodumene mined from the current resource at the Wolfsberg Project.
Subject to commissioning the plant, lithium spodumene concentrate from Wolfsberg’s Zone One will be sold to the joint venture company over the life of the resource at a reduced rate, with a floor and ceiling price. This is all subject to final agreements being in place.
Upon completion, all parties involved will establish a development committee with the aim of jointly collaborating on all key decisions relating to the plant’s development.
Once Critical Metals Corp, of which European Lithium owns 83.03%, has signed the deed of assignment and shareholders agreement, both agreements will become binding.
Executive Chairman Tony Sage says the company now has two partners to ensure its ambitions are fulfilled to become the first European producers of spodumene and hydroxide.
The company previously locked in a US$15 million investment from major German car manufacturer BMW.
“Now after these key milestones have been achieved the next steps become a lot easier,” Sage says.
“Over the next two quarters we expect to finalise the updated Definitive Feasibility Study on the now separated projects and secure the necessary funding to commence construction.
“The board of the newly formed Arabian New Energy will appoint a leading ECPM to oversee the construction of the hydroxide plant. The funding for the project will be organised from within Saudi Arabia.”
Obeikan Investment Group CEO Abdallah Obeikan says this partnership will combine European Lithium’s technical expertise and its affiliates with the industrial knowledge of Obeikan and the strength of the Saudi Arabian financial markets.
European Lithium is an explorer and developer focused on lithium in Austria, Ukraine, Ireland, and Australia.
Write to Aaliyah Rogan at Mining.com.au
Images: European Lithium
