Brian Zinchuk is editor and owner of Pipeline Online
On Nov. 24 Prairie Lithium was doing geotechnical drilling at its Pad #1 site. Photo by Brian Zinchuk
EMERALD PARK, PERTH, AUSTRALIA –Since Prairie Lithium drilled the first lithium brine well near Torquay, Saskatchewan in September 2021, approximately 9,200,000 metric tonnes lithium carbonate equivalent (composed of the highest-grade lithium brine in Canada) has been discovered in southeast Saskatchewan. While there are still companies exploring for more, and there are private companies with undisclosed or undetermined resource values, the companies that do understand their resources are now moving from exploration, through development, and into production. But once in production where will that lithium go? We are getting closer to knowing the answer, based on a string of offtake announcements from Prairie Lithium.
Back on Oct. 21, Prairie Lithium announced an offtake agreement with a startup company, Stardust Power, in Oklahoma to potentially take up to 6,000 tonnes per year of its lithium production, as they get up and running.
Then on Dec. 10, the company announced another offtake agreement, this time to a lithium refinery in South Korea, for up to 10,000 tonnes per year (tpa).
So what gives? Prairie Lithium Founder, & Executive Director Zach Maurer explained to Pipeline Online on Dec. 17.
Maurer said, “The offtake for Stardust Power in Oklahoma, is focused on domestic security of lithium supply chains. They have the desire to build a refinery in the United States to help shore up domestic processing of battery grade lithium products, so in turn they need to secure North American feed stock for their refinery. The offtake that we entered into with them is a non-binding offtake, basically to show that if they build their lithium refinery in North America, we’d be happy to provide them feed stock subject to reaching a definitive agreement.
- 0106 SASPO-2874_Self Serve Campaign_New Connects_Youtube_v30106 SASPO-2874_Self Serve Campaign_New Connects_Youtube_v3
- 0105 SaskEnergy Commitment to Safety0105 SaskEnergy Commitment to Safety
- 0102 Lori Carr Coal Extended0102 Lori Carr Coal Extended
- 0100 Turnbull Project Manager0100 Turnbull Project Manager
- 0099 Mryglod Steel 1080p0099 Mryglod Steel 1080p
- 0097 Eagle Sky Ventures LTD0097 Eagle Sky Ventures LTD
- 0095 Fast Trucking nearly 70 years good at it0095 Fast Trucking nearly 70 years good at it
- 0092 Turnbull projects big and small0092 Turnbull projects big and small
- 0046 City of Estevan This is Estevan Teaser0046 City of Estevan This is Estevan Teaser
- 0077 Caprice Resources Stand Up For Free Speech0077 Caprice Resources Stand Up For Free Speech
- 0061 SIMSA 2024 For Sask Buy Sask0061 SIMSA 2024 For Sask Buy Sask
- 0051 JML Hiring Pumpjack assembly0051 JML Hiring Pumpjack assembly
- 0049 Scotsburn Dental soft guitar0049 Scotsburn Dental soft guitar
- 0041 DEEP Since 2018 now we are going to build0041 DEEP Since 2018 now we are going to build
- 0032 IWS Summer hiring rock trailer music
- 0022 Grimes winter hiring
- 0021 OSY Rentals S8 Promo
- 0018 IWS Hiring Royal Summer
- 0013 Panther Drilling PO ad 03 top drive rigs
- 0002 gilliss casing services0002 gilliss casing services
- 9002 Pipeline Online 30 sec EBEX9002 Pipeline Online 30 sec EBEX
- 9001
“The difference with the offtake to this group in South Korea is this refinery in South Korea is operational, so they’re already producing battery grade lithium chemicals in their refinery, and their current feed stock is out of China. So they’re trying to ease their reliance on their Chinese feed stock into the refinery. And hence why they wanted to partner with us on our project, so that they can get their feed stock from what will be a more reliable source. This is an offtake that we can immediately feed into upon establishing production.”
Prairie Lithium’s Dec. 11 press release explains, “Under the heads of agreement, Hydro Lithium will purchase 100 per cent of the Lithium-bearing Crystallite produced at the Company’s Phase 1 commercial-scale proof-of-concept plant (up to 150 tpa Lithium Carbonate Equivalent (LCE) and use best endeavours to seek to increase supply to up to 10,000 Tonne Per Annum LCE for 10 years from the Prairie Lithium project in Saskatchewan, Canada. The product will be sold in the form of a lithium-bearing crystallite and will be used as feedstock for Hydro Lithium’s battery grade refinery in South Korea. This offtake includes all the lithium that will be produced from Phase 1 – commercial scale proof of concept plant currently in construction (approximately 150 TPA LCE).”
It goes on, “Prairie Lithium producing and selling a lithium-bearing crystallite closely mimics that of a Spodumene Concentrate transaction, where junior companies reduce project capex associated with battery grade processing equipment, and sell an intermediate product to establish production and revenue. This strategy enables organic growth, as the company can then leverage its production and revenue to continue to grow the project.”
Maurer explained that by producing and selling an intermediate product, it simplifies many things for the company.
As for the volume, he said their project is planned to be able to sustain higher than 10,000 tonnes per year, with 15,000- 20,000 tonnes per year as the goal.
- 0106 SASPO-2874_Self Serve Campaign_New Connects_Youtube_v30106 SASPO-2874_Self Serve Campaign_New Connects_Youtube_v3
- 0105 SaskEnergy Commitment to Safety0105 SaskEnergy Commitment to Safety
- 0102 Lori Carr Coal Extended0102 Lori Carr Coal Extended
- 0100 Turnbull Project Manager0100 Turnbull Project Manager
- 0099 Mryglod Steel 1080p0099 Mryglod Steel 1080p
- 0097 Eagle Sky Ventures LTD0097 Eagle Sky Ventures LTD
- 0095 Fast Trucking nearly 70 years good at it0095 Fast Trucking nearly 70 years good at it
- 0092 Turnbull projects big and small0092 Turnbull projects big and small
- 0046 City of Estevan This is Estevan Teaser0046 City of Estevan This is Estevan Teaser
- 0077 Caprice Resources Stand Up For Free Speech0077 Caprice Resources Stand Up For Free Speech
- 0061 SIMSA 2024 For Sask Buy Sask0061 SIMSA 2024 For Sask Buy Sask
- 0051 JML Hiring Pumpjack assembly0051 JML Hiring Pumpjack assembly
- 0049 Scotsburn Dental soft guitar0049 Scotsburn Dental soft guitar
- 0041 DEEP Since 2018 now we are going to build0041 DEEP Since 2018 now we are going to build
- 0032 IWS Summer hiring rock trailer music
- 0022 Grimes winter hiring
- 0021 OSY Rentals S8 Promo
- 0018 IWS Hiring Royal Summer
- 0013 Panther Drilling PO ad 03 top drive rigs
- 0002 gilliss casing services0002 gilliss casing services
- 9002 Pipeline Online 30 sec EBEX9002 Pipeline Online 30 sec EBEX
- 9001
As a binding vs non-binding agreement, the South Korean deal supercedes the earlier Oklahoma announcement. What it means is that Prairie Lithium now has two potential customers – one for sure, with Hydro Lithium, and one possible, with Stardust Power, indicating there’s definitely interest in their future production.
He said there are several impacts. “Number one, it establishes, our definitive supply chain. So now we know for sure where we’re going to be selling our initial product, what the price of that product is going to be, and given the quality of the product that we’re going to be shipping to them, that allows us to finalize all the equipment spec on the back end of the facility, which, in turn, because of the product that we will be selling to them, we anticipate to have some cost benefits to us, because we’ll need less equipment. So, lower CapEx, slightly less reagent use, so lower OpEx. We can sell them an intermediate product, and save some costs on our side. And then, in addition to that, it does open up the door to additional financing opportunities. Once you have a definitive off take in place, like we do now, you can start to access different programs and different capital providers, because they know that there’s somebody who definitively wants to buy your production with pricing certainty over a set duration.
The final product will still be a white powder and will primarily be made up of lithium chloride. The whole idea behind a refinery is to refine, and that, in turn, will bring the product to a battery-grade material. Maurer said, “They accept our product, and then they convert it into a battery grade, lithium carbonate or lithium hydroxide, and then they sell it to their off take partners who are currently buying from their refinery. Typically, it’s cathode active material or CAM companies that source the battery grade lithium carbonate or hydroxide, who then in turn can sell down into the battery cell manufacturers. In some cases, like what Tesla announced a few years ago, companies are trying to vertically integrate from resource right through to battery assembly. For now we remained focused on what we do best, which is resource exploration & development.
“Asia has a substantially more mature and developed battery material supply chain. This is evident in many of the electronic devices that we use and rely on every day, so it makes sense to sell Saskatchewan lithium into that market, in South Korea, until the North American market is developed.”
In late October, Prairie Lithium did dirt work at its Pad #1 site a few kilometres southwest of Torquay. That was followed up a few weeks later geotechnical survey work for planning foundations for its facility. More construction work is expected in the new year.
Editor’s note: Here’s the portion of Pipeline Online’s year-end interview with Premier Scott Moe where he’s asked about Prairie Lithium. (Actually, Maurer accompanied Moe to Washington.)
- 0106 SASPO-2874_Self Serve Campaign_New Connects_Youtube_v30106 SASPO-2874_Self Serve Campaign_New Connects_Youtube_v3
- 0105 SaskEnergy Commitment to Safety0105 SaskEnergy Commitment to Safety
- 0102 Lori Carr Coal Extended0102 Lori Carr Coal Extended
- 0100 Turnbull Project Manager0100 Turnbull Project Manager
- 0099 Mryglod Steel 1080p0099 Mryglod Steel 1080p
- 0097 Eagle Sky Ventures LTD0097 Eagle Sky Ventures LTD
- 0095 Fast Trucking nearly 70 years good at it0095 Fast Trucking nearly 70 years good at it
- 0092 Turnbull projects big and small0092 Turnbull projects big and small
- 0046 City of Estevan This is Estevan Teaser0046 City of Estevan This is Estevan Teaser
- 0077 Caprice Resources Stand Up For Free Speech0077 Caprice Resources Stand Up For Free Speech
- 0061 SIMSA 2024 For Sask Buy Sask0061 SIMSA 2024 For Sask Buy Sask
- 0051 JML Hiring Pumpjack assembly0051 JML Hiring Pumpjack assembly
- 0049 Scotsburn Dental soft guitar0049 Scotsburn Dental soft guitar
- 0041 DEEP Since 2018 now we are going to build0041 DEEP Since 2018 now we are going to build
- 0032 IWS Summer hiring rock trailer music
- 0022 Grimes winter hiring
- 0021 OSY Rentals S8 Promo
- 0018 IWS Hiring Royal Summer
- 0013 Panther Drilling PO ad 03 top drive rigs
- 0002 gilliss casing services0002 gilliss casing services
- 9002 Pipeline Online 30 sec EBEX9002 Pipeline Online 30 sec EBEX
- 9001
- 0106 SASPO-2874_Self Serve Campaign_New Connects_Youtube_v30106 SASPO-2874_Self Serve Campaign_New Connects_Youtube_v3
- 0105 SaskEnergy Commitment to Safety0105 SaskEnergy Commitment to Safety
- 0102 Lori Carr Coal Extended0102 Lori Carr Coal Extended
- 0100 Turnbull Project Manager0100 Turnbull Project Manager
- 0099 Mryglod Steel 1080p0099 Mryglod Steel 1080p
- 0097 Eagle Sky Ventures LTD0097 Eagle Sky Ventures LTD
- 0095 Fast Trucking nearly 70 years good at it0095 Fast Trucking nearly 70 years good at it
- 0092 Turnbull projects big and small0092 Turnbull projects big and small
- 0046 City of Estevan This is Estevan Teaser0046 City of Estevan This is Estevan Teaser
- 0077 Caprice Resources Stand Up For Free Speech0077 Caprice Resources Stand Up For Free Speech
- 0061 SIMSA 2024 For Sask Buy Sask0061 SIMSA 2024 For Sask Buy Sask
- 0051 JML Hiring Pumpjack assembly0051 JML Hiring Pumpjack assembly
- 0049 Scotsburn Dental soft guitar0049 Scotsburn Dental soft guitar
- 0041 DEEP Since 2018 now we are going to build0041 DEEP Since 2018 now we are going to build
- 0032 IWS Summer hiring rock trailer music
- 0022 Grimes winter hiring
- 0021 OSY Rentals S8 Promo
- 0018 IWS Hiring Royal Summer
- 0013 Panther Drilling PO ad 03 top drive rigs
- 0002 gilliss casing services0002 gilliss casing services
- 9002 Pipeline Online 30 sec EBEX9002 Pipeline Online 30 sec EBEX
- 9001
- 0106 SASPO-2874_Self Serve Campaign_New Connects_Youtube_v30106 SASPO-2874_Self Serve Campaign_New Connects_Youtube_v3
- 0105 SaskEnergy Commitment to Safety0105 SaskEnergy Commitment to Safety
- 0102 Lori Carr Coal Extended0102 Lori Carr Coal Extended
- 0100 Turnbull Project Manager0100 Turnbull Project Manager
- 0099 Mryglod Steel 1080p0099 Mryglod Steel 1080p
- 0097 Eagle Sky Ventures LTD0097 Eagle Sky Ventures LTD
- 0095 Fast Trucking nearly 70 years good at it0095 Fast Trucking nearly 70 years good at it
- 0092 Turnbull projects big and small0092 Turnbull projects big and small
- 0046 City of Estevan This is Estevan Teaser0046 City of Estevan This is Estevan Teaser
- 0077 Caprice Resources Stand Up For Free Speech0077 Caprice Resources Stand Up For Free Speech
- 0061 SIMSA 2024 For Sask Buy Sask0061 SIMSA 2024 For Sask Buy Sask
- 0051 JML Hiring Pumpjack assembly0051 JML Hiring Pumpjack assembly
- 0049 Scotsburn Dental soft guitar0049 Scotsburn Dental soft guitar
- 0041 DEEP Since 2018 now we are going to build0041 DEEP Since 2018 now we are going to build
- 0032 IWS Summer hiring rock trailer music
- 0022 Grimes winter hiring
- 0021 OSY Rentals S8 Promo
- 0018 IWS Hiring Royal Summer
- 0013 Panther Drilling PO ad 03 top drive rigs
- 0002 gilliss casing services0002 gilliss casing services
- 9002 Pipeline Online 30 sec EBEX9002 Pipeline Online 30 sec EBEX
- 9001
- 0106 SASPO-2874_Self Serve Campaign_New Connects_Youtube_v30106 SASPO-2874_Self Serve Campaign_New Connects_Youtube_v3
- 0105 SaskEnergy Commitment to Safety0105 SaskEnergy Commitment to Safety
- 0102 Lori Carr Coal Extended0102 Lori Carr Coal Extended
- 0100 Turnbull Project Manager0100 Turnbull Project Manager
- 0099 Mryglod Steel 1080p0099 Mryglod Steel 1080p
- 0097 Eagle Sky Ventures LTD0097 Eagle Sky Ventures LTD
- 0095 Fast Trucking nearly 70 years good at it0095 Fast Trucking nearly 70 years good at it
- 0092 Turnbull projects big and small0092 Turnbull projects big and small
- 0046 City of Estevan This is Estevan Teaser0046 City of Estevan This is Estevan Teaser
- 0077 Caprice Resources Stand Up For Free Speech0077 Caprice Resources Stand Up For Free Speech
- 0061 SIMSA 2024 For Sask Buy Sask0061 SIMSA 2024 For Sask Buy Sask
- 0051 JML Hiring Pumpjack assembly0051 JML Hiring Pumpjack assembly
- 0049 Scotsburn Dental soft guitar0049 Scotsburn Dental soft guitar
- 0041 DEEP Since 2018 now we are going to build0041 DEEP Since 2018 now we are going to build
- 0032 IWS Summer hiring rock trailer music
- 0022 Grimes winter hiring
- 0021 OSY Rentals S8 Promo
- 0018 IWS Hiring Royal Summer
- 0013 Panther Drilling PO ad 03 top drive rigs
- 0002 gilliss casing services0002 gilliss casing services
- 9002 Pipeline Online 30 sec EBEX9002 Pipeline Online 30 sec EBEX
- 9001
- 0106 SASPO-2874_Self Serve Campaign_New Connects_Youtube_v30106 SASPO-2874_Self Serve Campaign_New Connects_Youtube_v3
- 0105 SaskEnergy Commitment to Safety0105 SaskEnergy Commitment to Safety
- 0102 Lori Carr Coal Extended0102 Lori Carr Coal Extended
- 0100 Turnbull Project Manager0100 Turnbull Project Manager
- 0099 Mryglod Steel 1080p0099 Mryglod Steel 1080p
- 0097 Eagle Sky Ventures LTD0097 Eagle Sky Ventures LTD
- 0095 Fast Trucking nearly 70 years good at it0095 Fast Trucking nearly 70 years good at it
- 0092 Turnbull projects big and small0092 Turnbull projects big and small
- 0046 City of Estevan This is Estevan Teaser0046 City of Estevan This is Estevan Teaser
- 0077 Caprice Resources Stand Up For Free Speech0077 Caprice Resources Stand Up For Free Speech
- 0061 SIMSA 2024 For Sask Buy Sask0061 SIMSA 2024 For Sask Buy Sask
- 0051 JML Hiring Pumpjack assembly0051 JML Hiring Pumpjack assembly
- 0049 Scotsburn Dental soft guitar0049 Scotsburn Dental soft guitar
- 0041 DEEP Since 2018 now we are going to build0041 DEEP Since 2018 now we are going to build
- 0032 IWS Summer hiring rock trailer music
- 0022 Grimes winter hiring
- 0021 OSY Rentals S8 Promo
- 0018 IWS Hiring Royal Summer
- 0013 Panther Drilling PO ad 03 top drive rigs
- 0002 gilliss casing services0002 gilliss casing services
- 9002 Pipeline Online 30 sec EBEX9002 Pipeline Online 30 sec EBEX
- 9001