India’s Manikaran Power Ltd. and Australian mining company Neometals are conducting a feasibility study for what would be India’s first lithium refinery, and Manikaran announced last week that the analysis will be completed by the end of this year.
The facility would produce lithium hydroxide, and the study is estimated at AU$2 million (U.S. $1.3 million). Lithium- and lithium complex-based greases dominate India’s market. Lithium’s biggest and fastest-growing demand comes from makers of lithium-ion batteries for smartphones, laptops and electric vehicles.
The proposed refinery would have nameplate capacity to produce 20,000 metric tons per year lithium carbonate equivalent of lithium hydroxide. Lithium production numbers are commonly described in terms of lithium carbonate equivalent – commonly referred to as LCE – because that is the initial chemical in the lithium production chain, with subsequent steps producing compounds such as lithium hydroxide.
According to the announcement, the companies eliminated the originally planned lithium carbonate co-product stream, offering significant economies of scale from the expanded output and overall capital efficiency gains. “The decision to increase the capacity of the lithium refinery and simplify the product mix was in response to feedback from potential offtake customers,” Manikaran said in the news release. “This commencement to feasibility study establishes Manikaran’s conviction to produce lithium chemicals in India, considering competitive capital costs and meeting the growing demand for lithium in India.”
Manikaran and Neometals, a mineral project developer in Western Australia, signed a memorandum of understanding in June 2019 for joint evaluation and development of India’s first lithium refinery. Under the memorandum, they will consider formation of an incorporated 50-50 joint venture company, based on the results of the feasibility timeline. The timeline for target project development steps calls for completion of the feasibility study in December 2020 and possible formation of the joint venture in March 2021.
The short- to medium-term forecast for lithium will likely impact the lithium supply chain during 2025-2028, according to Manikaran, spurred by the ongoing disturbance due to the Covid-19 pandemic. “The assessment of the refinery and its development is timed to be commissioned to help match the increased demand for lithium in this period,” the company stated in its news release.
India and the Indian subcontinent produced about 192.5 million tons of grease that used lithium soap thickeners in 2018, according to the National Lubricating Grease Institute’s most recent yearly survey, released in June 2019. Conventional lithium soap thickeners accounted for 73.6 percent of that production in the region, with complex lithium soap accounting for the remainder.
Industry applications for lithium complex grease include the wind turbine, steel mill and automotive industries.
Manaikaran, a power company, noted that demand for lithium for electric vehicles is rising. “Our country is already home to several EV manufacturers, and domestic policy makers are aiming to incentivize EV adoption and downstream investment in the EV supply chain,” Manikaran Power Director Jasmeet Sing Kalso said in the news release. “The proposed lithium refinery – which will produce lithium hydroxide, critical for manufacturing of lithium ion battery cells – with Neometals-Australia as its strategic partner, will help in achieving domestic downstream manufacturing capabilities for lithium ion batteries.”