The two companies have signed a memorandum of understanding to progress the development of a downstream lithium chemical plant, which would use concentrate from their jointly owned Mt Marion mine.

The proposed plant, to be located near Mt Marion, would produce a battery quality lithium hydroxide product.

MinRes owns 43.1% of the mine, while Neometals holds 13.8%, and are permitted to buy 51% of the spodumene production from Mt Marion from around 2020.

China’s Ganfeng Lithium holds the balance of Mt Marion and will initially purchase 100% of the production.

MinRes and Neometals will jointly assess the feasibility of a plant with nameplate capacity of 20,000-25,000 tonnes per annum of lithium carbonate equivalent production, utilising the conventional sulphate/caustic soda process used by leading Chinese lithium converters (including Ganfeng).  

Activities will include front-end engineering and design, site selection and acquisition, negotiation of reagent supplies, and approvals.

The partners said the proposed process route would eliminate the need for pilot testing as Ganfeng would be processing run‐of‐mine concentrates at commercial scale starting this quarter.

Work will begin immediately with a final investment decision targeted for the September quarter of next year.

“With the transition of Mt Marion to production we are now confident that a downstream lithium processing plant located nearby to Mt Marion will deliver superior economic outcomes for the JV partners with the added benefit of bring new employment opportunities to the Goldfields,” Neometals managing director Chris Reed said.

The commercialisation of the patented ELi process will continue separately from the MoU work.

Commissioning of the $US158 million Mt Marion mine is underway with the partners targeting the first shipment of lithium by the end of the month.

The project has a resource of 60.5 million tonnes at 1.36% lithium oxide.

Neometals shares were unchanged at A32.5c, while MinRes shares rose by 0.9% to $11.17.