Saudi Arabia advances world’s first integrated battery metals plant

Saudi Arabia aims to start construction by December on the world’s first integrated battery metals complex built and fed with raw materials by the same company.

Perth, Australia-based EV Metals Group, which is controlled by Saudi Arabia, wants to construct the battery metals complex on a 1.3-sq.-km plot in Yanbu on the Red Sea about 1,000 km west of Riyadh, EVM chief executive officer Michael Naylor said in an exclusive interview with The Northern Miner Thursday on the sidelines of the Future Minerals Forum.

The project aims to produce 50,000 tonnes of lithium hydroxide monohydrate in 2026 before ramping up to 150,000 tonnes a year and adding a second plant’s output of 450,000 tonnes of nickel, manganese and cobalt sulphates. They’ll feed a third plant making cathodes for batteries. What would be one of the world’s largest battery chemical processing plants is to be supplied by EVM’s own projects in Western Australia while it explores for local minerals in Saudi Arabia.

Automakers are struggling to lock in battery metal supplies as they ramp up electric vehicle production. The West has created alliances to promote critical mineral mining as an alternative to China’s 80% control of the market, according to estimates by BMO Capital Markets.

Early-stage supplies

However, the unlisted EVM, whose chairman is Abdullah Busfar, a former senior executive at state-owned Ma’aden Aluminum, is only beginning to develop the Range Well nickel and cobalt project near Perth and others that would supply the plant.

Participants at the Future Minerals Forum, the second held in the country, have lauded the kingdom’s eagerness to pivot towards mining to support clean energy. It was a regional leader in 2016 when it released its Saudi Vision 2030 and subsequent plans to produce about 58 gigawatts of renewable capacity, although some forecasts say it will fall short.

Still, several forum visitors noted privately that it’s early days for Saudi leaders molded by decades of fossil fuel dominance in a conservative society that could easily thwart energy reform. Also, the local mining industry needs substantial guidance and training, not just petrol-dollars, they said.

If built, the plant’s initial production of lithium hydroxide would dwarf national output in the United States estimated at 12,400 tonnes last year, according to Fitch Solutions, although that’s expected to rise to 56,400 tonnes this year.

The project’s cost wasn’t mentioned. However, Rock Tech Lithium (TSXV: RCK) plans to spend 650 million euros ($943 million) to build a 24,000-tonne-per-year lithium hydroxide plant in Germany. It received early construction permission this month.

This week the Saudi government granted the land, valued at SR3.75 million ($1.2 million), for the EVM complex and a feed of 6.2 million cubic feet a day of natural gas to power it. The government first approved the project in December 2020.

The plant is to start with two production trains before adding four more. EVM’s Range Well project would supply the plant from an indicated resource of 248 million tonnes grading 0.67% nickel, 0.043% cobalt and 0.19% manganese, according to an October 2021 report.

Joint ventures

EVM has a joint venture agreement with Zenith Minerals (ASX: ZNC) where the Saudi firm would fully fund the Split Rocks and Waratah Well lithium projects. Feasibility studies haven’t been done yet. They also have a 60% EVM, 40% Zenith joint venture in the Mount Ida North lithium project.

The long-term plan is for EVM to find and mine sources in the kingdom. The company has applied for 140 exploration licences and been approved for 11 as it prepares to probe lithium and nickel targets, one just 30 km from the plant.

“We’re very excited about the opportunity to be able to start that field work with geo-chem and rock-chip sampling,” Naylor said.

Saudi Arabia plans an automotive cluster linking the complex’s cathode active materials plant and a battery cell factory to its own electric vehicle car manufacturing.

The Saudi Public Investment Fund, a sovereign wealth fund headed by Crown Prince Mohammed bin Salman, owns 60% of electric vehicle maker Lucid Group. The fund said in November it also plans to make electric cars in the kingdom in a joint venture for the new Ceer auto brand with China-based Apple supplier Foxconn.

“They need a cathode active materials plant,” Naylor said. “In May 2022 we acquired the global battery materials and technology assets of Johnson Mathey, world-leading, world class technology.”

EVM is focusing on battery cathodes, which Naylor sees for the next 10 to 15 years being dominated by two main chemistries: lithium, nickel, cobalt and manganese; or lower-priced lithium ferro-phosphate. EVM has the means to make both using the Johnson Mathey assets.

The government has also asked EVM to consider anode production using a new process under development involving graphene, which is 200 times stronger than steel and five times lighter than aluminum but incredibly difficult to produce. However, the kingdom has access to plentiful potential sources in petroleum coke.

“We completed the studies, that is in the plan,” Naylor said. “We don’t speak a lot about it at the moment, it’s a work in progress.”