TIDMALK
RNS Number : 0699A
Alkemy Capital Investments PLC
18 January 2024
18 January 2024
Alkemy Capital Investments Plc
Corporate Update
Alkemy Capital Investments plc ("Alkemy") (LSE: ALK) (FRA:JV2)
is pleased to provide a corporate and strategic update.
HIGHLIGHTS
-- Macro outlook for lithium processing remains extremely robust
despite a recent fall in lithium prices, with European demand for
lithium remaining on an unprecedented upward trajectory.
-- Tees Valley Lithium's refinery at the Wilton International
Chemicals Park in Teesside is a refinery of strategic importance in
Europe, having already secured environmental and planning
permission, and will create over 1,000 local jobs in the UK when in
full production in 2026.
-- Feedstock has been secured for the Wilton refinery's first train from global leader Wogen.
-- Project financing discussions advancing with multiple
potential providers of debt, strategic equity and green bond
finance; mezzanine finance discussions with tier one financial
institutions progressing well.
-- Port Hedland Lithium's refinery at the Boodarie Strategic
Industrial Area in Port Hedland provides a mid-stream solution for
Australia's spodumene miners with direct access to the European
premium market and a low-carbon feedstock supply for TVL's Wilton
refinery.
-- Alkemy is actively exploring opportunities to expand its
downstream processing strategy to other key critical battery
minerals in conjunction with strategic and industry partners.
Chairman Paul Atherley commented:
"Since the inception of our company, we have made excellent
progress in advancing our lithium refinery projects, including
securing key sites in Teesside and Port Hedland, receiving planning
and environmental permissions, securing feedstock and establishing
other key strategic partnerships along with key governmental,
industry and media recognition, reflecting our commitment to
becoming a leader in the low-carbon production of battery-grade
lithium hydroxide.
The success of these strategic initiatives and partnerships
places us at the forefront of Europe's critical minerals processing
sector, and we are now poised to replicate this success across
other key critical battery minerals, that could deliver for Alkemy
a potentially transformational multi-minerals strategy.
In the short term we remain focussed on securing mezzanine
finance to advance the project and I am pleased to report that we
are making excellent progress with several tier one financial
institutions on this front."
Macro outlook for lithium processing remains robust despite the
recent downturn in lithium prices
Despite recent market shifts, European demand for lithium
remains on an unprecedented upward trajectory. With the UK and EU's
transition towards electric vehicles (EVs), there's a forecasted
demand for lithium that far exceeds current supply
capabilities.
The UK and European Commission's move to ban combustion engine
cars by 2035 is a significant catalyst, signalling a shift towards
a more sustainable and electric future. This policy change, along
with similar initiatives worldwide, is expected to fuel a
consistent and growing demand for lithium.
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 EVs. 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.
Recognising the escalating demand for lithium, Alkemy has been
actively developing its lithium refining portfolio through Tees
Valley Lithium (TVL) and Port Hedland Lithium (PHL). Alkemy's focus
is not just on meeting the immediate market needs but on
establishing a supply chain that is resilient, environmentally
responsible, and capable of adapting to the rapidly evolving energy
landscape.
TVL's processing refinery in Teesside 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.
Feedstock secured for TVL's Teesside refinery
TVL has reached an agreement in principle with international
trading house Wogen for the supply of technical grade lithium
carbonate to TVL's merchant refinery at Wilton.
Wogen is a leading international trader of off-exchange
specialty metals and minerals, with a long history and
well-established presence in the battery metals market across Asia,
the United States and Europe. Wogen has an active trading book in
lithium products procuring from an array of producing countries and
selling into the battery supply chain.
Wogen intends to supply up to 20,000 tonnes of technical grade
lithium carbonate feedstock per annum, for an initial period of
five years. The supply will be sufficient to fill the first of the
proposed four trains at Wilton producing around 24,000 tonnes of
battery grade lithium hydroxide or lithium carbonate
equivalent.
TVL's partnership with Wogen ensures a reliable supply of
lithium, critical for its first production train. This partnership
is however more than just a supply agreement: it's a strategic
alignment that ensures a steady and sustainable flow of lithium to
TVL's Teesside refinery. This collaboration is critical in
establishing a reliable and ethical supply chain which is crucial
in the volatile commodity market. Wogen, known for its global reach
and expertise in speciality metals and minerals, brings not just
the supply security but also a wealth of industry knowledge and
market insight.
This partnership, combined with ongoing dialogues with other
industry leaders, will propel Alkemy forward in its mission to
become a significant force in the battery minerals sector,
underpinning the Alkemy group's commitment to sustainability and
ethical sourcing.
Project and mezzanine funding discussions are progressing
well
TVL is in discussions with a number of leading financial
institutions for the financing of its Wilton refinery.
The $300m approximate capital cost of train 1 is expected to be
financed largely through green bonds (for which TVL will seek
accreditation) combined with a mix of debt, strategic equity
finance and grant funding, all at project level.
Having secured feedstock for its first train at Wilton, a key
component for these financing discussions, TVL is now working with
several leading financial institutions to obtain initial mezzanine
funding which will enable it to complete Front End Engineering
Design (FEED) and commence the purchase of key long lead items for
the refinery. Alkemy is currently making excellent progress in
these discussions and will update the market as soon as this key
piece of funding is secured.
TVL's Teesside lithium refinery is of strategic importance for
the UK
The Critical Minerals Association United Kingdom (CMA), a key
interlocutor between the UK Government and the critical minerals
industry, has 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 and TVL remains in
discussions with the ATF to secure a grant which will form part of
TVL's project financing package. 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 endorsement from the CMA and the engagement with the ATF are
testaments to the national significance of this project. It's not
just an industrial venture but a crucial part of the UK's strategic
move towards a sustainable automotive industry. TVL's refinery,
with its cutting-edge technology and capacity, is set to become a
cornerstone in the UK's industrial landscape, contributing
significantly to the country's environmental goals and its position
in the global battery supply chain.
Port Hedland Lithium provides a mid-stream solution for
Australia's spodumene miners with direct access to the premium
European market
The Western Australian government has allocated PHL an area of
approximately 43.7 hectares within the Boodarie Strategic
Industrial Area for the construction of its proposed Port Hedland
LSM refinery with Wave Engineering and GHD engaged to undertake the
engineering and planning approvals.
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.
PHL 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.
PHL represents a strategic initiative that transcends
geographical boundaries. It's a symbol of the new era of critical
mineral supply chains, effectively bridging the Australian mining
capabilities with the European automotive industry. This project
not only reinforces the strong trade relations between the UK and
Australia but also establishes a direct and efficient supply line
to Europe's rapidly expanding battery market.
The Port Hedland facility is poised to become a vital link in
the global supply chain of lithium, facilitating the transfer of
raw materials from one of the world's richest mining regions
directly to the heart of the UK and Europe's battery manufacturing
hub.
Alkemy to replicate downstream strategy in other key critical
battery minerals in conjunction with strategic partners
Building on the successful foundations laid by TVL and PHL,
Alkemy is actively exploring new horizons in the battery minerals
sector. Alkemy's vision extends beyond lithium to encompass a range
of critical battery minerals, positioning it as a diversified
leader in the energy transition sector.
Alkemy is committed to being a pivotal force in critical
minerals processing, guiding its portfolio companies towards not
only achieving operational excellence but also adhering to
sustainable practices in premium mineral production. Alkemy will
seek to nurture their growth and expansion, while strategically
forging partnerships to diversify and align its portfolio with the
evolving demands of the energy transition industry. Alkemy's focus
is steadfastly on driving consistent growth, ensuring global market
resilience, and fostering long-term value creation.
Alkemy continues to advance discussions with potential key
strategic and industry partners to develop additional downstream
processing refineries for other battery minerals. These projects
will build on the key relationships already in place between TVL
and its various stakeholders and will be fully complementary to
TVL's aims and objectives.
Alkemy expects to make further announcements in due course once
key agreements have been entered into.
Further information
For further information, please visit the Company's website:
www.alkemycapital.co.uk or www.teesvalleylithium.co.uk
-Ends-
Alkemy Capital Investments Plc Tel: 0207 317 0636
info@alkemycapital.co.uk
SI Capital Limited Tel: 0148 341 3500
VSA Capital Limited Tel: 0203 005 5000
ABOUT ALKEMY CAPITAL
Alkemy is seeking to establish independent and sustainable
lithium hydroxide production by developing lithium sulphate and
lithium hydroxide facilities in the UK and Australia.
Alkemy, through its wholly owned UK 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 one of 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 or an equivalent amount of
lithium carbonate annually, representing around 15% of Europe's
projected demand.
Alkemy, through its wholly owned Australian subsidiary Port
Hedland Lithium, has secured a 43.7 ha site at the Boodarie
strategic industry area, near Port Hedland, Western Australia to
build a world-class sustainable lithium sulphate refinery that will
provide reliable feedstock for Tees Valley Lithium's refinery.
Port Hedland Lithium has completed a Class 4 Feasibility Study
for its proposed lithium sulphate refinery, each train of which
will process spodumene concentrate to produce 40,000 tonnes of
lithium sulphate annually.
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. In addition, factors that could
cause actual events to differ materially from the forward-looking
information stated herein 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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