Avalon Advanced Materials has announced the completion of a Preliminary Economic Assessment (PEA) for its Lithium Hydroxide Processing Facility, known as the Lake Superior Lithium Project, located in Thunder Bay, Ontario, Canada. The PEA, conducted by DRA Americas Inc., highlights the project’s strong economic potential, with plans for an annual production capacity of 30,000 tonnes of battery-grade lithium hydroxide (LiOH).
Key findings from the PEA include an after-tax Net Present Value (NPV) of $4.1 billion at an 8% discount rate and an after-tax Internal Rate of Return (IRR) of 48% over the 30-year project life. The initial capital cost is estimated at $1.2 billion, with total capital costs reaching $1.3 billion. The life-of-project operating costs are projected at $13,029 per tonne, which includes the cost of spodumene concentrate, a key raw material.
Avalon plans to employ an innovative process utilizing Metso Technology, which offers a more environmentally friendly approach compared to conventional lithium hydroxide production methods. The facility is strategically positioned on a brownfield industrial site, benefiting from established infrastructure, including roads, rail, ports, and utilities, along with a skilled local workforce.
Scott Monteith, Avalon’s CEO, expressed enthusiasm about the results, emphasizing the project’s alignment with environmental sustainability and its potential to meet the growing demand for lithium hydroxide driven by the electric vehicle (EV) industry in Canada.
The project’s financial assumptions include a long-term price for lithium hydroxide of $35,360 per tonne (USD $26,000/tonne) and a spodumene concentrate price of $1,360 per tonne (USD $1,000/tonne). A 30% Clean Technology Manufacturing Industrial Tax Credit has been applied to the initial capital cost. 
