Why the Piedmont Lithium (ASX:PLL) share price is gaining today

As the world transitions to electric vehicles, finding sustainable supply chains to power them is critical

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The Piedmont Lithium Inc (ASX: PLL) share price is gaining today, up by 0.55%. At the time of writing, Piedmont shares are changing hands for 91 cents.

Below, we look at the lithium company’s latest project update.

What did Piedmont report on its scoping study?

Piedmont Lithium’s share price is gaining after the company updated the market on the scoping study for its proposed integrated lithium hydroxide business. The business, Carolina Lithium, is located in the US state of North Carolina.

According to the release, the study confirmed Carolina Lithium will be among the world’s biggest and lowest-cost producers of lithium hydroxide. The company noted the project was well placed to help power the big expected increase in electric vehicles (EVs) in the US.

It also highlighted a superior sustainability level of its project compared to existing producers, who are based in China and South America. In China, lithium producers remain highly dependent on coal-fired power. In South America, lithium producers often use huge tracts of land and large amounts of water which, Piedmont notes, occurs in the Atacama — the driest desert on Earth.

By contrast, Piedmont Lithium’s Metso Outotec process reduces emissions, eliminates sulfuric acid roasting and reduces solid waste, the company says. Its use of solar power also cuts back its dependence on carbon-based energy sources. In addition, transport distances for its raw materials and finished products are far lower than its Chinese and South American competitors.

The lithium company is forecasting a 2.9 year payback period with US$401 million average annual earnings before interest, taxes, depreciation and amortisation (EBITDA). It expects to produce 30,000 tonnes of lithium hydroxide per year.

Piedmont Lithium’s CEO Keith Phillips said:

It is critical that raw material supply chains do not detract from the overall sustainability of the transition to electric vehicles…

Given the project’s unique position as the only American spodumene project, with world-class scale, economics, and sustainability, we expect strategic interest to be robust.

The company has engaged Evercore and JPMorgan as financial advisors.

Piedmont Lithium share price snapshot

Piedmont Lithium’s share price has rocketed over the past 12 months, up 810%. That blows the doors off the 20% gains posted by the All Ordinaries Index (ASX: XAO) over that same time.

The Piedmont Energy share price has continued to hugely outperform in 2021, up 145% so far this calendar year.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Piedmont Lithium Limited. Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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