With due diligence wrapped up, European Lithium says it is targeting a JV agreement with Obeikan Investment Group before May 31 for the co-development of a hydroxide plant in Saudi.
It follows on European Lithium seeking to become first mover in mining investment in Saudi Arabia when it signed a memorandum of understanding with Obeikan earlier this year to build and operate a lithium hydroxide plant.
Obeikan Investment Group is one of Saudi Arabia’s 100 largest companies, with over 3000 employees and operations in 16 countries.
Abadallah Obeikan, CEO of the Obeikan Investment Group, called the MoU a “a great step ahead in further strengthening the Saudi Australian economic collaboration,” saying it was “In-line with (the) Obeikan investment group strategy of accelerating sustainability within the energy field.”
Under the deal, EUR and Obeikan agreed to negotiate suitable commercial terms to enter a 50:50 joint venture (JV) partnership for the co-development and co-operation of the plant for EUR’s Wolsfberg lithium project in Austria.
A reduction in operating energy costs from the proposed 50-50 JV is expected to deliver significant savings for the Wolfsberg project, making the project even more robust, EUR executive chairman Tony Sage says.
“Enormous savings” in operating costs
“Building and operating the hydroxide plant in Saudi Arabia will reduce energy costs by over 80%, provide access to a much lower corporate tax rate (20%) and provide much more attractive financing options,” he explains.
“This will create enormous savings in operating costs and lower Capex for the Wolfsberg Project, which will greatly impact the just completed DFS’s NPV and IRR calculations”.
European Lithium is homing in on these plans, with due diligence ticked off ahead of an expected binding JV agreement before May 31.