Lithium Universe (ASX:LU7) sets course to bridge lithium product supply gap

Lithium Universe has claimed a pivotal role in closing the gap on an increasingly large North American lithium conversion divide from its mine-to-battery home base in the core of Canada’s James Bay lithium hub.

On the raw supply side there might be 500 million tonnes of established resources over the one per cent lithium benchmark across the region but converting it into enough end-use product remains a lucrative unsolved problem.

LU7’s answer is its proposed Quebec Lithium Processing Hub, now being advanced as a one million tonnes a year concentrator and an independent 16,000 tonnes a year battery-grade lithium carbonate refinery.

Lithium Universe Chief Executive Alex Hanly said the greatest opportunity in the lithium industry right now lay within the midstream.

“This is the capacity to process and convert raw lithium into battery grade material, and that is the part of the lithium ecosystem that we call the lithium gap,” Hanly said.

He noted that while there were only 92 gigawatt hours of battery capacity produced within North America in 2022, there had been a significant flurry of gigafactory and cathode factory construction in the eastern seaboard over the past two years.

“What we’re seeing is a tenfold increase up to a thousand gigawatts by 2028. Now, in order to feed those gigafactories, what we estimate is that there’s probably around 850,000 tonnes of lithium carbon and equivalent required,” Hanly said.

“The opportunity we see is in connecting the supply with this huge demand. Currently, there is only a hundred thousand tonnes of lithium-carbon-equivalent planned in conversion capacity in North America, so we are seeing a huge deficit between those two figures.”

Hanly added that the company was exposed to another major tailwind, a huge geopolitical shift to onshore the continent’s lithium supply chain, noting large funding initiatives in Quebec alone from both the province’s government and Canada’s federal government.

An LU7 graphic illustrating The Lithium Gap’ emerging between North America’s planned conversion facilities capacity and downstream demand.

While China has long held the top spot in the electric vehicle supply chain, BloombergNEF has supplanted the lithium power with Canada as its number-one jurisdiction, noting the nation’s raw abundance, manufacturing investments, downstream demand, and unmatched ESG advantages.

While an abundance of exploration expenditure through record-shattering prices turned the dial back on raw product, US lithium demand has been predicted to grow by more than 500 per cent by 2030, and a large number of mid-steam conversion plants have failed to come online.

Lithium Universe hit its initial public offering with an assemblage of experts in hard rock lithium processing and refining, a team which surpassed design expectations to produce the world’s premier battery-grade product at the Jiangsu Lithium Carbonate facility.

The Perth-headquartered company admits its strategy is a bold one, but it remains undeterred on going from mine to battery-grade lithium in the Great White North.

Watch the full strategic update from Lithium Universe CEO Alex Hanly.

Please note the following valuable information before using this website. 

Independent Research 

Market Open Australia is intended to be used only for educational and informative purposes, and any information on this website should not be taken as investment advice or guidance. It is important to conduct your own research before making any investment decisions, which should be based on your own investment needs and personal circumstances. Any investment decisions based on information contained on this website should be taken in line with independent financial advice from a qualified professional or should be independently researched and verified.