Lithium Australia Ltd (ASX:LIT) has signed a non-binding Memorandum of Understanding (MOU) with South Korea’s SungEel HiTech regarding the off-take of Mixed Metal Dust (MMD) (also known in the industry as Black Powder).
The company also revealed the progression of a joint development agreement (JDA), including related to investment by SungEel into the expansion of the company’s recycling capability and capacity.
Wholly owned subsidiary, Envirostream Australia has entered into a sales and purchase contract with SungEel to facilitate MMD sales whilst the off- take agreement is being finalised. This contract includes customary terms for such an agreement, including MMD price mechanisms, but does not include minimum volumes.
SungEel is a leading South Korean battery recycler with global operations. SungEel currently operates recycling plants in South Korea, Hungary, Poland, India, and Malaysia and has announced planned investments in the USA, Spain, and Germany to expand its global footprint. SungEel operates various Hydro Centres, which utilise hydrometallurgy to extract high-purity battery materials from MMD.
SungEel is an existing customer of Envirostream with MMD sales in excess of 300 tonnes since the start of 2020. The relationship between SungEel and Lithium Australia is important to the Company, and the signing of an MOU intends to extend and formalise the existing relationship between the two parties.
The MOU between Lithium Australia and SungEel is intended to progress discussions on MMD off-take, with execution of an off-take agreement expected to be completed by 30 June 2024. Both parties will then progress discussions towards entering into a JDA, including investment by the end of 2024, focused on upgrading recycling equipment and expanding total processing capacity of Envirostream.
The company notes that the off- take agreement and JDA are subject to negotiations and relevant approvals.
As Envirostream secures additional lithium-ion battery (LIB) supply through recycling servicing agreements with EV and ESS manufacturers, there will be an associated uplift in MMD production. An MMD off-take agreement with SungEel ensures that increased LIB processing will be matched with MMD demand.
“Signing MMD off-take agreements is critical to Lithium Australia’s strategic roadmap, as it demonstrates the Company’s ability to secure additional MMD customers as the collection volumes of LIBs continues to scale,” Lithium Australia CEO and Managing Director, Simon Linge, said.
“The MOU signed with SungEel is very exciting for the growth of the company’s recycling operations. SungEel is a global leading battery recycler with hydrometallurgical capabilities, which requires MMD as an input material for the extraction of high-purity battery materials. We look forward to formalising our relationship with SungEel, a valued long-term partner of Lithium Australia.”
