London — Russia's state nuclear company Rosatom is pursuing its goal of applying lithium ion battery technology in the Russian economy by positioning itself to join Canadian corporation Wealth Minerals' lithium greenfield project in Chile, Wealth Minerals' president, Tim McCutcheon, told S&P Global Platts.
Wealth Minerals signed a memorandum of understanding this week with Uranium One Group (U1G), a subsidiary of Rosatom, outlining the acquisition by U1G of up to a 51% ownership in Wealth's Atacama lithium project in northern Chile.
This is the second MoU on lithium that Rosatom has signed this year, after sealing a non-binding agreement in July with Bolivia's energy ministry to cooperate in developing lithium deposits and making lithium products.
In May 2018, the Russian company also signed a similar document with the Chilean Atomic Energy Commission covering lithium processing.
The MoU with Wealth Minerals seems to be the most tangible of these agreements and relates to an actual project. It provides for a due diligence period and would give U1G the right to purchase 100% of the output of the Atacama Project, provided the transaction closes. The companies have not disclosed a timeline, and they have yet to agree on commercial terms as well as receive the required approvals, including that of Toronto-based stock exchange TSX Venture Exchange.
"U1G has decades of resource development, which we anticipate will be of great importance to create a world class operation at Wealth's Atacama project," McCutcheon said, referring to the company's portfolio of assets worldwide, including in Kazakhstan, the US and Tanzania.
The plan is to extract lithium from the Atacama brines and then pump the brine back into salars -- underground brine reservoirs -- and represents an environmentally friendly and sustainable production method, McCutcheon said.
This sorption technology proposed by U1G was part of the company's draw in the deal. Typical lithium extraction operations use underground brine reservoirs, with solar evaporation as the major part of the lithium recovery process. While this process is cost effective and technologically simple, it also requires significant land for ponds in which lithium brine, after subsurface pumping, is placed for drying.
Water in the brine is evaporated and lost from the location. In extremely dry areas like the Andes mountains, where most lithium brine operations are located, this method has sustainability issues.
Wealth Minerals' team has studied alternative methodologies for developing its lithium assets and found the one proposed by the Russian company to be the most viable in terms of commercial implementation. U1G suggested utilizing a reusable catalyst material to draw lithium out of brine, eliminating the need for solar evaporation and greatly reducing the physical footprint.
Rosatom already makes lithium products marketed in Russia and abroad. A spokesman for the company told Platts Wednesday that, given its competencies and technological capabilities in mining, its plans in lithium extraction are well justified.
The company has been interested in expanding its lithium business for several years. Rosatom applied to participate in the Chilean lithium processing program one-and-a-half years ago. To kick off the program, in May 2017 the Chilean government hosted the Lithium Call Roadshow, aimed at potential investors and partners seeking to set up production of lithium cathodes, components for batteries and other such products in Chile.
Rosatom was among the attendees, but its interests were not limited to value-added processing projects. It also eyed the extraction of lithium in Chile -- the country holds just over half of all global lithium reserves -- in order to be able to feed its own operations in Siberia.
Shortly after the roadshow, Rosatom said in mid-2017 it would invest Rb1 billion ($15.6 million) to set up the production of lithium-ion power batteries at its Novosibirsk Chemical Concentrates Plant. The latter mainly makes fuel for nuclear power plants but is also Russia's sole producer of commercial lithium metal.
Russia has its own lithium deposits -- in eastern Siberia, Irkutsk region and Yakutia -- but they have not yet been tapped. And the Novosibirsk plant sources lithium substrate outside the country. Without captive raw materials, it is limited in its ability to develop lithium production at competitive costs, according to Rosatom's website.
So far, Russia has only one plant, Liotech, producing lithium-ion batteries -- mainly for electric vehicles. Also in Novosibirsk, the plant belongs to another Russian state-owned corporation, Rosnano, which focuses on nanotechnologies. Launched in 2011, Liotech saw downtimes between 2014 and 2016, a period that brought continuous ruble devaluations that pushed up the cost of imports.
By joining lithium operations in Chile, Rosatom would strengthen ties between the countries and increase its chances of taking part in Chile's nuclear projects, analysts have said.
-- Ekaterina Bouckley, firstname.lastname@example.org
-- Edited by James Leech, email@example.com