Ioneer and Sibanye Stillwater: Lithium Boron Project
A collaboration between Ioneer and Sibanye Stillwater has recently been announced toa Lithium-boron mining project. Ioneer chose this established mining company as a partner for this joint venture. A feasibility study provided definitive results in 2020, validating the project as a world-class resource.
The ore reserves found in this project are close to 60 million metric tonnes. However, the entire lithium-boron mineral reserve is approximately 146.5 million metric tonnes. Ioneer has a goal to mine, process, and handle 63.8 million metric tonnes. The plan is to a 26-year mine life. This will be at an average rate of 2.5 million tonnes in a year.
The project will produce close to 24,000 tons of Lithium Carbonate/ Hydroxide per year. Additionally, production of Boric Acid is estimated at up to 192,000 tonnes per year.
When the mine starts operations, there will be employment for 250 to 300 people. However, 400 to 500 employees are required during the construction period requiring compensation levels up to $141,000/year.
The Lithium-Boron project at Rhyolite Ridge focuses on using limited water only. The aim is co-generation of on-site power along with the state of the art emission controls.
Lithium Boron, also known as LiB, is a common ingredient in the manufacturing of lithium-ion batteries. These batteries are essential to powering electric vehicles. This project between these companies aim to produce the purest lithium carbonate. Manufacturing will use spodumene concentrate, which is to be supplied from the Ioneer mine, in Griqualand West Province.
Ioneer (ASX: INR) is based in Sydney Australia. The organization recently announced that they will join hands with Sibanye-Stillwater. The latter is a global precious metal mining company focused on developing the Rhyolite Ridge lithium-boron project in the US state of Nevada.
Transformational Strategic Investment
This move is a transformational strategic investment. Providing an opportunity to position the company as the next big lithium-boron producer. According to the terms and conditions of the Joint Venture, Ioneer will enjoy 50% equity and operator rights Sibanye-Stillwater will act as an investment contributor. They will provide US $490 million in the form of direct funding to cover the remaining 50% interest.
The organizations are setting up a technical committee with experts to handle the project operations. Additionally, the marketing team will improve visibility and promote the benefits of the JV to enhance the value of the partnership. Apart from this, a special ESG committee will be formed to oversee commitments to environmental, social, and governance (ESG) initiatives.
The terms of the deal with Ioneer allow Sibanye-Stillwater to invest in 50% of the North Basin project from Rhyolite Ridge. This is a possibility with an additional contribution of $68 million from the latter. The organizations will also secure the required debt financing to ensure the Rhyolite Ridge project is funded sufficiently through to production.
Strategic placement of approximately $95 million Ioneer shares is necessary for capital requirements. These shares will be issued to Sibanye-Stillwater. As per the terms regarding the placement, Sibanye Stillwater takes close to 145.9 million shares. These are ordinary shares available at $0.655 each. Additionally, the funds will be used to handle medium-term working capital needs and play a role to develop the long-lead items and reduce production time significantly.
Goldman Sachs is the official financial adviser for Ioneer’s placement. The legal advisors include Vinson & Elkins from the US and Ashurst from Australia. Sibanye-Stillwater retains Macquarie Capital and Davis Polk & Wardwell (US) as the legal advisor for Sibanye-Stillwater.
James Calaway, the executive chairman of Ioneer hopes that the collaboration will help Rhyolite Ridge to grow as the biggest lithium mine in the United States.
“This agreement will allow us to unlock the tremendous, long-term value of Rhyolite Ridge,” James Calaway said. “Sibanye-Stillwater has a proven track record of developing and operating major mining projects and is determined to become a major force in the battery materials supply chain [which makes it] an excellent partner to help realize the promise of this project.