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Australia based Neometals and India’s Manikaran Power—which announced their collaboration on India’s first lithium refinery last year—have also doubled the proposed refinery capacity to 20,000 tonnes per annum of lithium hydroxide.

Having announced their collaboration last year, Neometals, an Australian company with an interest in the Mount Marion lithium mine near Kalgoorlie in Western Australia, and New Delhi’s Manikaran Power have launched a feasibility study into developing India’s first lithium refinery.

The Australian miner also announced an increase in the planned refinery output to 20,000 tonnes per annum of battery-grade lithium hydroxide (LiOH) equivalent—from 10,000 tonnes per annum earlier.  

Besides, it has scrapped the original plan to co-produce lithium carbonate, offering scope for significant economies of scale from the expanded output and overall capital efficiency gains.

 “The decision to increase the capacity of the lithium refinery and simplify the product mix is in response to feedback from potential offtake customers. Advancement to the feasibility study supports Manikaran’s conviction to refine lithium chemicals in India and to do so in a manner that is capital efficient and adequately meets growing forecast domestic demand”—read a statement by Neometals.

Significance for India’s EV push

The proposed project would help India to secure the raw material supply for domestic manufacturing of lithium batteries as it looks to promote electric vehicles in a big way. 

Australia has lithium reserves of an estimated 2.7 million tonnes, mostly in the state of Western Australia, near state capital Perth. Thus far, most of the nation’s lithium projects have been with Chinese and American partners and the proposed tie-up could lead to the first lithium deal between an Australian and Indian company.

Under the deal, Neometals will supply ore from the Mount Marion mine for processing at the India refinery to produce battery-grade material for electric cars.

“Our conviction in the long-term opportunity for lithium, and indeed for a suite of other lithium battery raw materials, remains very strong. The lithium refinery supports Neometals’ desire to derive value from its life-of-mine spodumene offtake option at Mt Marion by moving downstream to capture higher value and margins from lithium chemical products,” Neometals Chief Executive Officer Chris Reed said in the statement.

Seeking to gain a first-mover advantage in Indian market, the company sees the lithium refinery as a low-cost strategic option to produce the key ingredient in the EV battery, timed to deliver into a strong supply shortage mid-decade. 

“Given recent global economic events, the importance of nationalised supply chains is more evident than ever. This is particularly relevant for India with its government target of achieving 100% electric vehicle sales by 2030, despite presently having no domestic lithium chemical production to supply significant planned domestic cathode and LIB cell production capacity,” Reed said.