Barry Fitzgerald's article in RRS

Piedmont’s ‘Made in America’ lithium

The American’s are a patriotic bunch, that’s for sure. And with Trump in the White House, “Made in America” bumper stickers have some real meaning to them.
It’s that backdrop which makes it hard to dispute ASX-listed Piedmont Lithium’s claim (PLL) that it’s got the world’s best-located lithium project business.
It helps that its namesake project some 30 miles outside of Charlotte in North Carolina sits on a mineralised trend which was the world’s primary source of lithium-bearing spodumene in the 1950s-1990s when no one really cared about the stuff.
The so-called Carolina tin-spodumene belt hosted the two historic US spodumene mines and while spodumene production stopped back in the 1990s, the big boys of Albemarle and FMC continued with their lithium processing operations, mainly with South American and Chinese lithium carbonate material.
Piedmont is out to restart spodumene production from the belt and become a lithium carbonate producer/processor itself to capture the higher margins for the value-added material. The “Made in America’’ stencil on its bagged project is set to give it a leg up in dealing with the US auto industry on the sourcing of material for the mighty swing towards electric vehicles in the US.
On that score, there was chat recently about some guys from GM seen walking the Piedmont ground.
Having a project in a region that has done it all before, and where low labour and energy costs and a smooth permitting process delivers real benefits, makes Piedmont an obvious port of call for the US auto makers – and their battery partners - as they get busy sorting out their raw material supplies for the EV revolution.
Piedmont has got to lots of boxes to tick before it returns North Carolina to both mining and processing status in lithium. A maiden mineral resource and confirming metallurgy work would be a good start.
They are on their way in coming quarters, as is a scoping study, probably in June/July. By the fourth quarter of 2019, the plan is to have a feasibility study done so a final investment decision can be made for construction to start in 2020, with first production in 2021.
Lots of “ifs’’ and “buts” in there which explains while Piedmont is yet to capture the sort of market rating that is applied to players in the crowded Australian lithium space.
It has been trading at 17c for a market cap of about $90m. To juice up the not unreasonable expectation that as the milestones towards a development are passed, there will be re-rating events, and the company is planning a US listing.
The scoping study is the near-term key for the stock. If it points to an integrated spodumene/lithium carbonate operation good for 20,000-25,000 tonnes of annual lithium carbonate equivalent, people will sit up in this market, and the US.
Foster Stockbroking had a stab at what the first of the milestones – the maiden resource estimate – might mean for the company. On a comparative peer enterprise value/resource valuation method, it set a 30c price target.