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POSCO to construct test facility to validate its advanced process technology for lithium recovery; higher yield, shorter time

Li3 Energy, Inc., a US-listed and South America-based exploration company in the lithium and minerals sector, and strategic partner POSCO (earlier post) have signed a non-binding Memorandum of Understanding under which POSCO will design, build and operate a test facility for the recovery of lithium and other products using its advanced process technology at its sole expense.

POSCO is a Republic of South Korea multinational diversified company with operations in energy, chemicals and materials and one of the largest steel manufacturers in the world. In February, POSCO announced it had developed technology to improving lithium recovery and shortening processing times from the current average of one year or more down to a month.

POSCO said it had demonstrated the technology at pilot plant scale in Korea with artificial brine and brine supplied by various parties including Li3 Energy. The Research Institute Science and Technology (RIST) unit also demonstrated that the technology succeeded in producing yields of 80% lithium from brines versus the industry standard of 40%.

Whereas natural evaporation leaves other elements of the salt water in the form of impurities in the extracted lithium, the new technology allows separate extractions of lithium as well as other high-value added elements such as magnesium, calcium, potassium and boron.

Li3 will provide all technical support as necessary. Products resulting from the demo plant will not be commercialized and will be for testing purposes only. Although the partners desire that the test facility be built on the Maricunga Project site, the final determination of its location will be based on the needs, timing and permits required to construct the test facility.

Once testing of the Maricunga Project lithium brine is complete, the technology may be used by POSCO on other Li3 projects. The two are targeting the beginning of operations in the test facility in December 2012. Upon successful completion of the test facility, evaluating the merits and validation of the technology, the parties may discuss commercialization of the products in detail, including off-take agreements between the parties.

In January 2012, Li3 reported that an independent evaluation recently conducted by signumBOX concluded, upon achieving Chilean government permits, Li3’s Maricunga Project in its current state is ranked amongst the top 5 undeveloped lithium projects in the world out of 52 other brine salars. Li3 believes that the technology initiatives and interactions it is currently evaluating with its strategic partners could make the project more appealing and, if successful, lower Maricunga’s overall cost of lithium production to one of the lowest in the industry.

Li3 cautions that while the company is very optimistic about POSCO’s technology, it can offer no assurances that the technology will be successfully validated in further tests or at a commercial scale.

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