The Mineral Resources Ltd (ASX: MIN) share price had clawed back a 0.6% loss in early trade to be up 0.99% at the time of writing.
Below, we take a look at the company's refinery agreement announcement together with its joint venture (JV) partner Neometals Ltd (ASX: NMT).
Neometals shares are up around 7% this morning.
Image source: Getty Images
What agreement was announced?
The Mineral Resources share price isn't getting a lift from the agreement of its wholly-owned subsidiary Process Minerals International with Bondalti Chemicals, S.A. to evaluate commercialisation of its ELi lithium process in Europe.
The agreement was reached with Neometals' and Mineral Resources' JV company (70% Neometals, 30% Mineral Resources), Reed Advanced Materials Pty Ltd (RAM).
The planned lithium refinery, to be located in Portugal, would have a capacity of 25,000 tonnes per annum (tpa). It will be the first ELi deployment to produce battery quality lithium hydroxide and lithium carbonate.
With lithium demand and production increasing amid the global move to electrification, the company highlights that its system uses electrolysis to produce lithium chemicals. This means it has a smaller carbon footprint than conventional chemical conversion of lithium chloride solutions.
The company also said the pilot plant could use renewable energy, which would further decrease greenhouse gas emissions.
Commenting on the agreement, Reed's managing director Chris Reed said:
We are eager to take another step towards commercialising our ELi process and building a globally competitive, high purity 'battery quality' lithium chemical facility. Bondalti is a highly credentialed chemical producer and operator of chlor-alkali facilities which use electrolysis to produce sodium hydroxide.
Moreover, Bondalti's existing by-product hydrogen and chlorine gases provide a ready market for the by-products of the ELi Process. The synergies of first-class technical skills and infrastructure at Estarreja maximise the probability of technical success in the full-scale pilot plant trials and enhance the potential financial metrics of its first commercial application.
The US$4 million costs for construction and operation along with the 18-month evaluation studies will be co-funded by Bondalti and RAM.
Mineral Resources share price snapshot
The Mineral Resources share price is up 28% in 2021. That compares to a year-to-date gain of 11% posted by the S&P/ASX 200 Index (ASX: XJO).
Over the past month alone, shares in Mineral Resources are up 20%.
