TIDMALK
RNS Number : 8874W
Alkemy Capital Investments PLC
20 April 2023
20 April 2023
Alkemy Capital Investments Plc
Corporate Update
Alkemy Capital Investments plc ("Alkemy") (ALK:LSE) (JV2:FRA)
and its wholly-owned subsidiary Tees Valley Lithium Limited (" TVL
") are pleased to provide a corporate update on recent activities
and milestones.
HIGHLIGHTS
-- Macro outlook for lithium processing remains extremely robust
with 700GW of gigafactory capacity planned for Europe with
currently limited lithium refining capacity in the UK and
Europe.
-- TVL's world class Wilton lithium hydroxide refinery, one of
Europe's largest and most advanced, has received environmental and
planning permission, is shovel ready, with final FEED engineering
studies now underway.
-- Alkemy's Port Hedland lithium sulphate refinery is advancing
rapidly with land secured at the Boodarie Strategic Industrial Area
alongside multinationals BP, POSCO and Fortescue Metals, with the
environmental and planning approvals process and feasibility and
engineering studies underway.
-- Lithium offtake secured with Recharge Industries, the new
owners of Britishvolt, to supply tolled low-carbon lithium
hydroxide, with other European offtake deals currently being
advanced
-- Feedstock identified for both the Port Hedland and Wilton
refineries with Alkemy in late-stage discussions for supply deals
with multiple potential suppliers including well known automakers,
miners and commodity trading houses.
-- Project financing discussions advancing with multiple
potential providers of debt, strategic equity and green bond
finance.
Director Sam Quinn commented:
"Since the inception of our company little over a year ago, we
have made incredible progress in advancing both of our lithium
refinery projects, including securing key sites in Teesside and
Port Hedland, receiving planning and environmental permissions,
establishing offtake and other key strategic partnerships along
with key governmental, industry and media recognition.
We continue to advance discussions with several key potential
feedstock suppliers and consider that a binding deal with any one
or more of these parties would be a company-maker.
We firmly believe that the quality of our offering as one of the
world's lowest-carbon and Europe's largest refiners of zero waste
battery-grade lithium hydroxide, together with the rapid project
advancements made to date, stand us in good stead in these
negotiations."
Macro outlook for lithium processing remains extremely
robust
The European Commission and the UK have announced the ban on
sales of all combustion engine cars by 2035 and several governments
are offering financial incentives to buy electric vehicles ("EVs")
which has seen the demand for EVs in Europe breaking new records.
Norway is leading the charge where a remarkable 86% of all new
vehicles registered late year were EVs with Sweden 47%, Demark 35%
and Finland 32% not far behind. Globally, under the IEA's Stated
Policies Scenario, the stock of EVs is forecast to increase 11-fold
from today's levels to over 200 million vehicles.
As Europe's car makers make the switch to EVs to meet this
burgeoning demand there is over 700GW of gigafactory capacity
either in construction or planned to provide the batteries for
these electric vehicles.
These gigafactories will require over 650,000 tonnes of locally
refined lithium per year in the form of either hydroxide or
carbonate depending on the type of vehicle. Currently the UK and
Europe has very limited lithium refining capacity.
Building a European lithium processing facility will reduce the
regional dependence on China, which currently controls 90% of the
world's lithium refining capacity, however, is expected to require
all of this production domestically in order to deliver its US$11
trillion Carbon Neutral 2060 plan.
TVL's processing refinery is expected to produce enough lithium
hydroxide to supply 100% of the forecasted automotive demand in the
UK by 2030, with a further 35% of its total production available
for export to other countries in Europe and elsewhere.
Alkemy's Teesside and Port Hedland refineries continue to
advance at a rapid pace
TVL is looking to address this problem by providing the UK and
Europe with a supply of lithium from its recently approved refinery
at the Wilton Chemicals Park in the Teesside Freeport.
The state-of-the-art Wilton refinery will process imported high
content lithium in the form of a technical grade carbonate from
brine producers in South America and lithium sulphate from its Port
Hedland refinery in Western Australia, which will convert low grade
spodumene into high grade lithium sulphate.
The Wilton refinery has received planning approval for 96,000
tonnes per annum and is currently undergoing engineering studies
ahead of financing.
In January 2023, the Western Australian Government allocated
Alkemy an area of approximately 43.7 hectares within the Boodarie
Strategic Industrial Area for the construction of its Port Hedland
refinery. Wave Engineering and GHD have been engaged to undertake
the engineering and planning approvals for the Boodarie
operation.
Port Hedland, Western Australia is the largest bulk export port
in the world, the largest container port in Australia and with the
planned US$470 million multi-user logistics hub at Lumsden Point it
is expected to become the world's biggest exporter of lithium.
Alkemy has been allocated land along with BP, POSCO, Fortescue
Metals and Alinta Energy with the aim of making Boodarie part of an
A$70 billion globally competitive Pilbara green industrial
precinct.
Building the Port Hedland LSM refinery will provide Australian
spodumene producers with a complete mid-stream lithium refining
solution with direct access to the premium European market through
TVL's refinery at the Wilton International Chemicals Park in
Teesside, UK.
This new Pilbara to Teesside supply chain will embody the new
critical minerals supply chains possible under the recently signed
free trade agreement between Australia and the UK and leverage the
competitive strengths of Australia in mining and critical minerals
processing and the UK in chemical refining.
By sourcing low carbon feedstock and powering an electrochemical
refining process with offshore wind and green hydrogen supplied by
energy multinational bp's HyGreen Teesside project, TVL aims to
supply its UK and European customers with the world's lowest-carbon
lithium hydroxide, commencing in 2025.
Offtake has been secured with more lithium supply deals
expected
Recharge Industries Pty Ltd ("Recharge"), an Australian
Lithium-ion battery company, has now completed the acquisition of
Britishvolt, a planned GBP3.8 billlion lithium-ion gigafactory in
Northern England. TVL and Recharge have signed an MOU and will now
seek to negotiate and finalise a definitive offtake agreement to
supply tolled low-carbon lithium hydroxide into Recharge's
qualified supply chain and to potentially jointly source spodumene
for TVL's processing facilities. Recharge is currently developing
Australia's first large-scale lithium-ion cell production facility
in Geelong, Australia.
Under plans presented by Recharge, Britishvolt will be the UK's
first gigafactory, creating a strategic economic and security asset
which will play a critical role in the UK's industrial and net zero
strategies. Britishvolt will provide thousands of green, skilled
and local jobs that will drive local and national benefits.
Under its MOU with Recharge, TVL has agreed to supply tolled
lithium hydroxide to Britishvolt from its facility in Teesside.
Both companies will continue good-faith negotiations, with the aim
of concluding a definitive offtake and supply agreement. In
addition, both TVL and Recharge have agreed to work together to
jointly source lithium spodumene to be used in TVL's refinery in
Port Hedland, Western Australia for conversion to lithium sulphate
to be shipped to Teesside, UK for conversion into lithium
hydroxide.
TVL is also in discussions with several other European
gigafactories and electric vehicle OEMs to supply lithium hydroxide
and carbonate and expects more offtake deals to be signed in due
course. These customers are increasingly focussed on price,
transparency and low embedded carbon, when sourcing high grade
lithium products.
Government and industry continue to recognise the importance of
Alkemy's refineries
The Critical Minerals Association United Kingdom, a key
interlocutor between the UK Government and the critical minerals
industry, has recently identified TVL's lithium refinery in
Teesside as a case study project that in its opinion will form a
key strategic component of the UK's critical minerals midstream
processing and refining sector.
In addition, the UK Automotive Transformation Fund ("ATF"),
which is designed to help fund the UK's automotive supply chain,
has approved TVL's initial expression of interest with a formal
decision due in the coming months. The ATF is a funding programme
created to support large-scale industrialisation and will invest up
to GBP1 billion to develop a high-value end-to-end electrified
automotive supply chain in the UK. The ATF is a long-term programme
designed to enable the UK to build the world's most comprehensive
and compelling electrified vehicle supply chain, supporting over
160,000 jobs and creating export opportunities
TVL's world-class zero waste lithium hydroxide refinery will
form a significant component of the UK's transition to EVs and is
expected to produce enough lithium hydroxide to supply 100% of the
forecasted automotive demand in the UK by 2030.
Discussions regarding feedstock supply and offtake are rapidly
advancing and nearing completion
Alkemy is currently in advanced discussions with a number of
potential key feedstock suppliers, including both technical grade
carbonate suppliers from South America (to supply TVL's lithium
hydroxide refinery in Teesside) and spodumene suppliers from
Australia (to supply the Port Hedland refinery).
TVL's merchant refinery design is able to accommodate multiple
feedstock sources on a train-by-train basis, thereby opening up
various feedstock, partnership and funding options.
Advanced detailed discussions are ongoing with several
industry-leading lithium producers (miners), well known automakers,
global commodity trading houses and battery recyclers, to supply
Alkemy's available trains and Alkemy is confident of completing on
one or more of these feedstock supply deals in the short term.
Project funding discussions underway with several strategic
groups
Alkemy is in discussions with a number of groups and financial
institutions for the financing of both of its refineries.
The $600m approximate capital cost of trains 1 for both
refineries is expected to be financed largely through green bonds
(for which Alkemy will seek accreditation) combined with a mix of
debt and strategic equity finance at project level.
As securing feedstock is a key component for each project, these
financing discussions are expected to be concluded following the
signing of one or more feedstock deals.
Whilst Alkemy's goal has always been to mimimise dilution in the
listed topco, it may also seek to introduce one or more long term
strategic partners who share in our vision of building a global
leader in lithium downstream processing and refining.
Further information
For further information, please visit Alkemy's website:
www.alkemycapital.co.uk or TVL's website
www.teesvalleylithium.co.uk .
-Ends-
Alkemy Capital Investments Plc Tel: 0207 317 0636
Sam Quinn info@alkemycapital.co.uk
VSA Capital Limited Tel: 0203 005 5000
Andrew Monk (Corporate Broking)
Andrew Raca (Corporate Finance)
Shard Capital Partners LLP Tel: 0207 186 9952
Damon Heath damon.heath@shardcapital.com
Tel: 0207 186 9927
Isabella Pierre isabella.pierre@shardcapital.com
NOTES TO EDITORS
Alkemy is seeking to establish the world's leading independent
and sustainable lithium hydroxide production by developing
state-of-the-art lithium sulphate and lithium hydroxide facilities
in Australia and the UK.
Alkemy, through its wholly-owned subsidiary Tees Valley Lithium,
has secured a 9.6 ha brownfields site with full planning permission
at the Wilton International Chemicals Park in Teesside, a major UK
Freeport, to build the UK's first and Europe's largest lithium
hydroxide processing facility.
Tees Valley Lithium has completed a Class 4 Feasibility Study
for its proposed lithium hydroxide refinery which will process
feedstock imported from various sources to produce 96,000 tonnes of
premium, low-carbon lithium hydroxide annually, representing around
15% of Europe's projected demand.
Alkemy has also secured a site near Port Hedland, Western
Australia to build a world-class sustainable lithium sulphate
refinery that will provide reliable feedstock for Tees Valley
Lithium.
Forward Looking Statements
This news release contains forward--looking information. The
statements are based on reasonable assumptions and expectations of
management and Alkemy provides no assurance that actual events will
meet management's expectations. In certain cases, forward--looking
information may be identified by such terms as "anticipates",
"believes", "could", "estimates", "expects", "may", "shall",
"will", or "would". Although Alkemy believes the expectations
expressed in such forward--looking statements are based on
reasonable assumptions, such statements are not guarantees of
future performance and actual results or developments may differ
materially from those projected. Mining exploration and development
is an inherently risky business. In addition, factors that could
cause actual events to differ materially from the forward-looking
information stated herein include any factors which affect
decisions to pursue mineral exploration on the relevant property
and the ultimate exercise of option rights, which may include
changes in market conditions, changes in metal prices, general
economic and political conditions, environmental risks, and
community and non-governmental actions. Such factors will also
affect whether Alkemy will ultimately receive the benefits
anticipated pursuant to relevant agreements. This list is not
exhaustive of the factors that may affect any of the
forward--looking statements. These and other factors should be
considered carefully and readers should not place undue reliance on
forward-looking information.
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END
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