Piedmont Lithium launches partnership with Sayona Mining
Piedmont Lithium has entered into agreements to establish a strategic partnership with Sayona Mining Limited, through the purchase of equity stakes in Sayona and its 100 percent owned Quebec subsidiary, Sayona Quebec, as well as a binding supply agreement for at least 50 percent of Sayona Quebec’s planned spodumene concentrate production.
In a statement, Piedmont Lithium said it will acquire an initial 9.9 percent equity investment in Sayona for approximately $3.1 million and two unsecured convertible notes for approximately $3.9 million that upon conversion will result in Piedmont acquiring an additional 10.0 percent equity interest in Sayona.
Furthermore, Piedmont will appoint one director to Sayona’s Board of Directors, while it will also purchase a 25 percent stake in Sayona Quebec for approximately $5 million in cash.
Sayona Quebec owns the DFS-level Authier lithium project, the highly prospective Tansim lithium project, and is pursuing a bid to acquire the assets of the Quebec-based North American Lithium company.
Piedmont and Sayona Quebec have also entered into a binding spodumene concentrate ("SC6") supply agreement ("Supply Agreement") pursuant to which Sayona Quebec will supply to Piedmont the greater of 60,000 t/y or 50 percent of Sayona Quebec's SC6 production at market prices on a life-of-mine basis. Project Investment is expected to close in February.
"Piedmont's partnership with Sayona will provide multiple benefits. Sayona has high quality asset in a favourable location, and the investments are being made at an attractive valuation. The investments are additive to Piedmont from a resources and reserves perspective, and the spodumene supply agreement will offset our Testa commitments in the near term and position us for longer term growth in lithium hydroxide production. Furthermore, Sayona's pursuit of the brownfield assets of NAL offers a unique regional consolidation opportunity," said Keith D Philip, president and CEO of Piedmont Lithium.
"Quebec is poised to become an important lithium hydroxide production centre given its abundant mineral resources, low-cost sustainable hydro-electric power, proximity to major US and European electric vehicle markets, and pro electrification stance of provincial leaders."
Sayona's assets are favourably located in the Val-d'Or region of central Quebec, home to major mining concerns and proximate to first-class infrastructure. Sayona's core Authier project is well-advanced, with reserves declared and DFS complete, the nearby Tansim project offers strong exploration potential, and the regional consolidation opportunities including NAL are growing.
"This is a very exciting step for Piedmont. We look forward to supporting Sayona's team as they drive day-to-day activities in Quebec, while Piedmont's team focuses on its core interests in North Carolina. 2021 will be an important year for our Piedmont Lithium Project, as we plan to expand our mineral resources, finalize permitting, execute additional lithium offtake agreements, complete an integrated definitive feasibility study, and secure strategic project financing. We are fortunate to have a strong balance sheet to comfortably fund the Sayona investments without compromising our aggressive plans in North Carolina," he said.
Global iron ore production to recover by 5.1% in 2021
Global iron ore production fell by 3% to 2.2bnt in 2020. Global production is expected to grow at a compound annual growth rate (CAGR) of 3.7% to 2,663.4Mt between 2021 to 2025. The key contributors to this grow will be Brazil (6.2%), South Africa (4.1%), Australia (3.2%) and India (2.9%). Key upcoming projects expected to commence operations include South Flank in Australia (2021), Zulti in South Africa (H2 2021), Serrote Da Laje in Brazil (H2 2021) and Gudai-Darri (2022), according to GlobalData, a leading data and analytics company.
Vinneth Bajaj, Associate Project Manager at GlobalData, comments: “Declines from Brazil and India were major contributors to the reduced output in 2020. Combined production from these two countries fell from a collective 638.2Mt in 2019 to an estimated 591.1Mt in 2020. The reduced output from the iron ore giant, Vale, was the key factor behind Brazil’s reduced output, while delays in the auctioning of mines in Odisha affected India’s output in 2020.
“Miners in Australia were relatively unaffected by COVID-19 due to effective measures adopted by the Australian Government, while a speedy recovery in China led to a significant 10.4% increase in the country’s iron ore output.”
Looking ahead, the global iron ore production is expected to increase by 111.3Mt to 2,302.5Mt in 2021. Rio Tinto is expected to produce up to 340Mt of iron ore, while BHP has released production guidance of 245–255Mt, supported by the start of the Samarco project in December, which is expected to produce between 1–2Mt.The company has retained its guidance for Australian mines at 276–286Mt on a 100% basis, due to scheduled maintenance work at its ore handling plant and tie-in activity at the Area C mine and South-Flank mine.
Bajaj added: “The remaining companies are expected to produce more than 600Mt of iron ore, including FMG, whose production is expected to range between 175–180Mt supported by its Eliwana mine that commenced operations in late December 2020, and Anglo American, which is expecting to produce between 64–67Mt. Vale is expected to resume 40Mt of its production capacity, taking its overall production capacity to 350Mt in 2021, with production guidance of 315-335Mt.”