When you look at the whole equation, we expect to be able to...

When you look at the whole equation, we expect to be able to produce lithium hydroxide more competitively than hydroxide from spodumene," Lepidico managing director Joe Walsh told Mining Journal.Most of the world's current lithium supply is dominated by spodumene concentrate, which is typically mined and concentrated in Western Australia and then shipped off to China for refining. However, this process has its downsides, including geopolitical risk arising from the US-China trade war, as well as the cost of converting the concentrate into battery-grade lithium hydroxide. Lepidico says the smaller scale of its planned operations, combined with lower costs of conversion from lithium mica and lithium phosphate, will help to keep costs significantly down."We're using a purely hydro-metallurgical process, unlike spodumene which is a pyro-metallurgical and then hydro-metallurgical process," said Walsh. "Whereas spodumene involves heating to very high temperatures [up to 850 degrees], we only heat to 100 degrees celsius, which is a lot less energy intensive."Those two elements really help the economics associated with lithium mica, lithium phosphate conversion, despite lithium mica minerals being lower grade on concentrations."Desert Lion had originally planned to produce 20,000 tonnes of lithium hydroxide per year, and had already started producing lithium concentrate from stockpiled material. But as the price of lithium has reduced, the company eventually found itself running out of money, even despite the non-binding offtake agreement it signed with German chemical company BASF in April."Desert Lion had a fairly aggressive development strategy last year, and with the fall-back in spot China lithium carbonate prices, they effectively ran out of capital," said Walsh."We liked what they were doing, and saw an opportunity. The acquisition by Lepidico brings the Desert Lion assets into a well capitalised vehicle, which also provides an alternate methodology for becoming a lithium chemical producer using proprietary technology."Following the acquisition, Lepidico staff went out to Namibia to integrate the Desert Lion staff, and also set up four drill rigs. Drilling is set to start in September, and a new resource estimate is scheduled for Q4. The company is carrying out feasibility studies for two openpit mines, one at Pelekon one and one at Rubicon.Unlike some of the proposed lithium projects in Europe, Lepidico isn't planning to build a refinery anywhere near its actual mining operation. Instead, the company is looking at locations either in Canada, at Sudbury, or Abu Dhabi in the UAE, and seeking potential strategic partners for the plant."The key for us is strategically locating that plant," said Walsh. "We need to maximise revenue by having local markets for both by-products - SOP [sulphate of potash] fertiliser and amorphous silicalithium - and minimise our costs by having local sources of sulphuric acid and lime and limestone."Lepidico executives recently visited Abu Dhabi, where they met with Gulf Fluor, the largest manufacturer of sulphuric acid in the region."Our process consumes sulphuric acid, it's our largest single consumable, so being in proximity to affordable abundant sources of acid is important to us. We use one tonne of sulphuric acid for every tonne of concentrate processed," said Walsh. Lepidico's target to keep the entire cost of mining, concentrating and then refining lithium mica to under $100 million contrasts with estimatespreviously provided to Mining Journal, which put the cost of an integrated mining and refining operation (in Europe at least) at $400-500 million, although some European projects do claim lower costs. Lepidico's market capitalisation is A$114 million (US$79.6 million). "Most of the other lithium projects are going for scale, because they need to earn back their high cost of construction to make a return," said Walsh."Our scale to get a return is much lower."However, the $100 million figure is not final, and Lepidico expects to release a more exact figure later this year.