Rock Tech signs framework agreement with car maker in Germany

Rock Tech Lithium (TSXV: RCK; US-OTC: RCKTF) has signed a framework agreement with an unnamed global car maker headquartered in Germany to supply lithium hydroxide over an initial five-year period.

Rock Tech is building a lithium hydroxide converter in Germany (Guben, Brandenburg), and expects to start production there in 2024. The facility is forecast to have a production capacity of 24,000 tonnes per year, an amount that Rock Teck says would be needed to equip about 500,000 electric vehicles with lithium-ion batteries.

The framework supply agreement “represents a key step towards reducing overall risk by further establishing a core customer for its production of domestically produced lithium hydroxide,” Matthew O’Keefe, a mining analyst who covers the company for brokerage Cantor Fitzgerald, commented in a research note to clients.

Rock Tech, he added, “has built a broad management team with former executives from BMW and a technical group with development and operational experience in industrial plants, chemical processing and lithium production.”

The framework agreement announced on July 13 follows a non-binding memorandum of understanding (MOU) Rock Tech announced on July 7 to supply lithium spodumene concentrate to thyssenkrupp Materials Trading. The MOU also included a framework relating to the purchase of high-purity lithium hydroxide and other by-products from the refining process. (Spodumene is refined into lithium hydroxide, which can then be supplied to cathode manufacturers for the battery industry.)

Early exploration at the Georgia Lake lithium property in northern Ontario. Credit: Rock Tech Lithium

“With thyssenkrupp Materials Trading we have found a global logistics and trading partner that gives us further security in the supply of spodumene,” Markus Brugmann, Rock Teck’s CEO, said in a news release. “This is expected to give us a broader base for our input stream, which would take us a big step forward on the road to success.”

Thyssenkrupp Materials Trading’s CEO Wolfgang Schnittker noted that the potential partnership “underlines the systematic expansion of our global trading activities in the international battery and electric vehicles industry,” and noted that the “trading of lithium products would add another very important raw material to our supply portfolio for the production of long-life batteries.”

Thyssenkrupp AG is a German multinational conglomerate focused on industrial engineering and steel production.

In a corporate presentation in June, Rock Tech said it expects construction of the converter facility in Germany to start in the second half of 2022 and permitting is expected to be completed in the first quarter of 2023.

It also said it has optioned four other converter locations in Europe, and estimated that operating five converts by 2030 would enable it to supply about 30% of Europe’s demand.

In addition to the lithium hydroxide converter Rock Tech is building in Germany, it owns 100% of the Georgia Lake lithium project in Ontario.

The company is working on completing a pre-feasibility study on the 1,042-hectare project between Nipigon and Beardmore.

The project is focused on five known spodumene deposits—Main-Zone North (MZN), Conway, Main Zone Southwest (MZSW), Harricana and Line 60. 

The Georgia Lake spodumene deposits currently have a combined measured and indicated resource of 6.6 million tonnes grading 1.16% lithium oxide (Li2O). The inferred resource is 6.7 million tonnes grading 1.16% Li2O.

The Georgia Lake project is envisioned as an open-pit and underground lithium operation with an initial mine life of 11 years. An updated preliminary economic assessment in March 2021 gave the project a post-tax net present value of US$289 million and an internal rate of return of 19.6%.

The company said that following the release of a prefeasibility study, construction could start as early as the second quarter of 2023.