News: LIT UPDATE 1-Lithium Australia signs deal with Mineral Resources for Queensland pilot project

(Updates with deal details throughout)

Aug 7 (Reuters) - Lithium Australia (LIT) said on Monday it signed a deal with Mineral Resources (MinRes) (MIN) to form a joint venture and develop a pilot plant that would produce lithium iron phosphate to be used in electric vehicle batteries.

MinRes will solely fund the development and operation of the pilot plant in Queensland with a total budgeted cost of A$4.5 million ($2.96 million) and provide raw materials at no costs to the company, Lithium Australia said.

The deal includes Lithium Australia contributing its patented LieNA technology, which can improve lithium extraction yields by up to 50%, and managing the pilot plant's production process.

Depending on the results of the pilot plant, both parties will form a 50:50 joint venture to own and commercialise the LieNA technology.

Shares of Lithium Australia jumped 24.2% to A$0.041 by 0042 GMT, while those of MinRes were up 0.1%.

($1 = 1.5214 Australian dollars)