Australian Lake Resources partners with cleantech firm Lilac to develop lithium project in Argentina

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MELBOURNE, Sept 22 (Reuters) – Australian lithium company Lake Resources NL (LKE.AX) and California-based Lilac Solutions said on Wednesday they are teaming up to jointly develop the Kachi Lithium Brine project in Argentina, pushing up prices Lake shares more than 20% higher.

Lilac will bring its expertise in clean technologies to develop the lithium brine project in Argentina, which is home to the world’s third largest reserve of the material essential to batteries for electric vehicles.

In a joint statement on Wednesday, the companies said Lilac is set to invest around $50 million in the development of the project, which will allow it to take up to 25% equity in the future. The project should produce 25,500 tons per year from 2024 with a possible extension to 50,000 tons.

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The price of lithium has surged over the past year amid an explosion in demand for batteries using lithium as part of a global push towards greener modes of transport.

Lilac’s backers include Breakthrough Energy Ventures, whose investors include Amazon’s Bill Gates and Jeff Bezos (AMZN.O). Lilac said the deal allows the company to prove that its technology will deliver a high-purity product at scale, potentially allowing it to expand its customer base.

“We want to be in the lithium production business,” Lilac chief executive David Snydacker told Reuters on the sidelines of the Fastmarkets lithium conference in Las Vegas.

“We want to help people like Lake Resources bring production online and not just do engineering work.”

The project is currently expected to cost about $540 million, including about $300 million that Lilac and Lake Resources plan to finance through debt, Snydacker said. The bulk of the project’s electricity needs are expected to come from solar power.

For Lake Resources, the deal will bolster its green credentials and provide a funding route that, alongside export agency debt, means it won’t have to sell future supply just to secure development funding. . This will give him more flexibility to choose his customers and his conditions in the future.

Shares of Lake Resources jumped 22.3% before stabilizing 12.6% at AU$0.58.

The extraction of lithium from brine, often from large evaporation ponds in arid areas, has raised environmental concerns about water use.

But the companies said Lilac’s ion-exchange process will allow brine to be returned underground, reducing Kachi’s environmental impact.

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Reporting by Melanie Burton in Melbourne and Yamini CS in Bangalore; additional reporting by Ernest Scheyder in Las Vegas; Editing by Krishna Chandra Eluri and Kenneth Maxwell

Our standards: The Thomson Reuters Trust Principles.

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