Lithium Africa to build processing plant at South Africa project

Lithium Africa Corp. said it will pursue on-site processing of stockpiled and newly mined pegmatite at its Springbok Project in South Africa, targeting first production of spodumene concentrate in the second half of 2027.

In an Oct. 7 statement, the TSX Venture-listed company said it plans to process the material through a dense media separation (DMS) plant to be built at the project. Lithium Africa had previously been evaluating the direct-shipping sale of material stockpiled at the historical Norrabees I mine in the Northern Cape Province.

The decision follows the company's review of two-stage DMS test work conducted by a third party on a 13-metric-ton bulk sample of stockpile material. Lithium Africa said the test work has not yet been verified by a Qualified Person and will be incorporated into a planned preliminary economic assessment following the completion of an initial mineral resource estimate.

"Self-funding exploration through small-scale mining is a uniquely African way to explore for lithium," Chief Executive Thomas Benson said. "Our plan is designed to deliver real, non-dilutive value for Lithium Africa shareholders while advancing sustainable economic development in the Northern Cape."

Mining at Norrabees I is permitted under an existing 5-hectare Mining Permit. However, the construction and operation of a DMS plant will require additional approvals, including environmental authorization for the processing area, Lithium Africa said. The company added that it had begun the permitting process.

Springbok is held by Namli Exploration & Mining Pty Ltd., in which Lithium Africa owns a 70% interest. The Mining Permit is located within a 1,675-square-kilometer Prospecting Right that the company describes as a district-scale land position.

Lithium Africa said it is conducting drilling at Norrabees I and expects the results, along with historical drilling and ongoing exploration, to support an initial mineral resource estimate prepared in accordance with National Instrument 43-101 during the first half of 2027. The company plans to follow the estimate with a preliminary economic assessment covering the resource, DMS test work, the existing stockpiles as potential commissioning feed, and a proposed mining and processing plan.

The company emphasized that Springbok currently has no mineral resources and that it has not completed a preliminary economic assessment or other economic analysis of mineral resources at the project. The planned production decision is not supported by a feasibility study demonstrating the economic and technical viability of mineral reserves, which the company said means the decision carries a higher risk of economic and technical failure.

Lithium Africa said that it is also holding preliminary discussions regarding project-level financing structures, including offtake agreements, vendor financing and project-level equity, the company said. It is targeting a financing decision during the first half of 2027, although it cautioned that financing may not be completed on acceptable terms or at all.

The company's indicative schedule calls for continued drilling, environmental permitting and financing discussions during the fourth quarter of 2026. Subject to receiving the required approvals and securing financing, construction could begin during the first half of 2027, followed by targeted first production in the second half of the year.

Lithium Africa said cash flow from a modest-scale DMS operation would help fund exploration at Springbok and elsewhere in its African portfolio. Its other exploration interests in West and Southern Africa are held through a 50/50 joint venture with GFL International Co. Ltd., an affiliate of Ganfeng Lithium.

Platts, part of S&P Global Energy, assessed SpodIX CIF China at $1,700/mt on Oct. 7, stable from Oct. 6, amid thin spot trading activity due to the National Day holiday in China.