Hi RB
HK did an interview with Patrick Brindle in Oct 2022. This was a much maligned topic on the SYA thread. It worth watching again but I'll quote some of the really interesting parts ... because my opinion on producing carbonate from spodumene isn't favorable. I'm not against Carbonate - I just think their are more natural and cheaper ways to produce it than starting with spodumene.
from approx 17min mark, my bolding
"...in a recent press release from Sayona providing a market update they noted that the carbonate plant at NAL is 50 % constructed. I would say that from our perspective if you look at other conversion plants that have been built in recent years, what's actually in the plant at La Corne probably only represents about 50% of the equipment and the capital needed for a fully functional carbonate plant. We're not doing any work in the carbonate plant today. There are major elements missing: the acid roast and cooler; a mill; storage of beta spodumene - I mean calcined material; substantial upgrades to crystallization; impurity removal; filtration packaging etc. There's probably a few hundred million dollars that would need to be spent there to put the carbonate plant into service. What we did agree at a board level is that we would refresh technical studies that had been undertaken in the past at a feasibility level to re-evaluate what might be required in some granular detail with respect to a full build out of the carbonate plant and then once those studies are completed you know we'll have a conversation at a partner level about what the next appropriate steps are."
That ought to clarify a bit. That really is kind of what we here having been saying for some time.
Them the next question gets really interesting
HK: "... but there was some commitment I thought, to the Quebec government, that you would do a downstream. It could be carbonate, it could be hydroxide. What is the carbonate Market in the United States or in North America, does it – carbonate - make sense?
PB: "Yeah it's a it's a good question... What your question leads to is that we have optionality because we have element of an existing asset in place. We don't have other property away from La Corne today where we might colocate a jointly owned lithium conversion facility and so what that lends itself to, I think is, a number of trade-off studies that need to be undertaken by the partnership to figure out what exactly it is that we that we want to do. You know manufacturing carbonate at NAL might mean you know a technical grade carbonate that gets reprocessed into a into a battery quality hydroxide. It might mean a battery quality carbonate that's used for those types of those types of cathode formulations that favor battery grade carbonate. There's a few things there. ... We do have certain commitments to Investissement Quebec. We agreed to in exchange for their support of a of a credit bid through the acquisition of NAL that ask us to complete technical studies including a feasibility study within three years of the acquisition date and downstream production in a range of starting as early as six years from the acquisition date and so those aren't you know tomorrow or next year but they're not that far out into the future if you consider how long it takes to permit a facility like that to raise the capital needed to bring it to market and start production."
So think about that for a bit. There is much more work to be done before anything gets even close to FID. And for some "outside-the-box" thinking, this is the next (scripted for sure) question.
HK: ".... Nemaska with Livent could be building hydroxide and you have optionality - why couldn't you sell spodumene into that or other downstream facilities that Piedmont's building, or with the inflation reduction act, may just be economically better for the joint venture to build in America for example... "
PB: "It may be. The intent and spirit of long-term objectives would be conversion of spodumene within the province. The goal posts move a little bit with respect to timing etc. if the facilities are owned by the partnership or where the partnership has an equity position in you say a conversion facility where there are other partners versus one in which we sell spodumene concentrate to a conversion facility in the province that's owned by others. From our perspective, it's not in that development progression from 2023 through 2026. That includes NAL restart, Atlantic, Tennessee and Carolina. You would look forward to a future that also included conversion capacity in Quebec. Quebec will be an important contributor to the battery materials supply chain over time both on the cathode and anodes side, and I think it would be logical for Piedmont to want to have exposure to production capacity in that Province both upstream and downstream."
As a business decision, nothing should be sacrosanct. If the IRA made it just that much better an economic decision to build a JV owned conversion facility in the USA why does IQ have the right to interfere with that. It's somewhat rhetorical as the GoQ would say the decision to sell NAL to the JV was made with conversion in province BUT the IRA has changed things. Effectively Quebec would be implementing "export controls" and Washington wouldn't be all that happy (and don't underestimate that as the USA considers Canada as "domestic" - e.g. its provides a lot of funding into Canadian projects).
Whatever happens, it will be done properly because there is a lot at stake.
(20min delay)