Lanxess and Standard Lithium have signed an agreement setting forth the path forward for their lithium project. After 20 months of testing on the basis of a pilot plant Standard Lithium will now in a next step, conduct a Front End Engineering Design (FEED) study in order to evaluate the potential construction of a first industrial plant to produce lithium carbonate at Lanxess’ site in El Dorado, Arkansas/USA. The focus of the FEED study is the economic viability and technical feasibility of production of lithium carbonate on an industrial scale. Final results of this study are targeted for Q4/2022.
In case of a successful completion of the FEED study, Standard Lithium could build a plant for the production of battery grade lithium carbonate at one of the three LANXESS plants in El Dorado at their own expense. Lanxess does not bear any investment risk but has the option to acquire resulting battery grade lithium carbonate from Standard Lithium at advantageous pricing, i.e. at a discount of up to 20 percent to market, the final discount to be determined together with the conclusion of other project-related supply and services agreements between Lanxess and Standard Lithium.
Lanxess has a right to participate in the project company up to an ownership of 49 percent, whereas the value of this participation would be based upon the capitalization of the project company.
By signing this agreement, Lanxess safeguards opportunities in the attractive lithium market without taking downside or commodity price risk.