Hi All,
Juk, you've got me intrigued.
Regarding the differing concentrate grades, surely there is a difference?
LPD PFS
4.5% concentrate
94% recovery rate
2.47 conversion rate Li2O to Li2CO3
$350.00 LPD concentrate cost as per PFS
So 4.5% x 94% = 4.23%
1 tonne of Li2CO3 = 100%
therefore 1 tonne of Li2CO3 = 100%/2.47 Li2O conversion = 40.5
40.5/4.23 = 9.57
To make 1 tonne of Li2CO3 = 9.57 tonnes of concentrate.
9.57 tonnes concentrate x Table 4 processing costs of $1130.00
= $10,814.10 costs per tonne of Li2CO3 excluding by product credits
EMH using L-Max comparison
2.7% concentrate
94% recovery rate
2.47 conversion rate Li2O to Li2CO3
$174.00 emh concentrate cost before by product credit
So 2.7% x 94% = 2.54%
1 tonne of Li2CO3 = 100%
therefore 1 tonne of Li2CO3 = 100%/2.47 Li2O conversion = 40.5
40.5/2.54 = 15.94
To make 1 tonne of Li2CO3 = 15.94 tonnes of concentrate.
15.94 tonnes concentrate x Table 4 processing costs using $174.00 concentrate cost @ $954.00
Therefore 15.94 x $954.00 = $15,206.76 per tonne of Li2CO3 excluding by product credits
In this comparison, L-Max is the conversion process after concentrate processing in both cases. You have to have the Li content there in the first place to make the required quantity of end product surely??
The L-Max costs are on a processing per tonne of concentrate basis, so the costs would therefore be higher using EMH concentrate because of the higher throughput.
To offset this, the EMH by product credits would be higher because of the additional quantities of by products produced.
So to come to a rough conclusion about how L-Max performs using EMH concentrate, you would have to be calculating the by product credits.
These calculations are not particularly complicated, but you do have to do some hunting for pricing.
EMH provide SOP price of $520.00/t in the PFS.
LPD provide PQ Corp as the source for their pricing, and "Product D" is what I've used to get to $680.00/t
When you attempt these calculations, you cannot do it completely accurately because of the range given for by product production in the LPD PFS.
For SOP to Li2CO3 you have a cost ratio range of 1:1 to 1.25:1
For Sodium Silicate to Li2CO3 you have a cost ratio range of 13.33:1 to 16.66:1
When you apply pricing to these calculations you end with a cost range in the thousdands of dollars.
So one conclusion I can come to is that you cannot apply the comparison to EMH accurately enough using information available in the public domain.
Interestingly though, if you apply mid point credits using the above ranges for just SOP and Sodium Silicate, L-Max costs come out at $31.37 per tonne of LCE produced, so fairly close to their reported figures of approx $0.00 without considering other by product credits.
If you then apply the mid point credits to the EMH comparison, the L-Max process comes in at -$1,721.46 - On first impressions, Wow! But why are these figures so good? The vast majority of this reason would appear to be down to the sodium silicate credits.
So the big "but" for me here is when you consider the quantity of sodium silicate that would be produced from a 20ktpa LCE plant.
LPD suggest 40-50ktpa for 3ktpa LCE production.
So at the increased EMH concentrate throughput rates that would be the equivalent of 65-83 ktpa for 3ktpa LCE production.
So for 20ktpa LCE production that would be 430-550ktpa sodium silicate by product in 40% sodium water form.
Translated, that would equate to roughly 176-220ktpa glassy sodium silicate.
The total European market for sodium silicate (in glassy terms) is estimated around 1.7mtpa, so EMH would be looking to contribute 10.35% - 12.94% to that existing market.
The sodium silicate market in Europe is mature with low growth. Multiple plants in central Europe are run by well established industry players with excess capacity available to deal with increased demand.
These levels of sodium silicate production would make EMH one of the largest producers of sodium silicate in Europe.
What would then happen if EMH wanted to expand and double LCE production to 40ktpa?
What would happen to the sodium silicate price if other L-Max plants came online either locally or globally?
And with these thoughts in mind, I suspect herein lies the reasons for the decision the BoD have had to make regarding the processing route.
Just as a side note to this, for EMH the throughput of concentrate would be higher through the processing plant, therefore the CAPEX would obviously increase somewhat for the EMH L-Max processing plant.
Finally, regarding by product and co product accounting methods.
Miro and anyone interested, this is a good link to explain the differences with examples.
https://www.explorationinsights.com/pebble.asp?relid=3443
The LPD PFS shows figure 2 with all the comparative costs. Above it, in their own words, they state the following.
"The comparison shows that L-Max® is expected to be cost competitive even at the Phase 1 scale. At a
larger scale, the Company would be targeting further reductions in C3 costs on a co-product basis to
approximately $3,000/t – which would place L-Max® projects comfortably in the lowest cost quartile."
Surely if by product figures were the ones to compare with against other global producers they'd be saying "we are the planets lowest cost producer by a country mile"??
But I do agree with what you're saying about the bottom lines being the same Juk.
This is all IMHO and I'm quite happy for this to be picked apart and errors pointed out so I can fine tune the research and resultant opinion. I don't have any preference of process as long as it's the right choice moving forward.
Apologies if there is a delay in response, I'm travelling.
Cheers.
(20min delay)