Year-to-date gain: 23.19 percent; market cap: US$1.01 billion; current share price: US$52.75
Based in the US state of North Carolina, Piedmont Lithium is focused on producing lithium hydroxide to provide companies with a source outside of China. To do so, Piedmont is advancing its fully integrated Carolina lithium project in North Carolina and is planning the largest US lithium hydroxide plant, which will be in Tennessee. The company received a US$141.7 million grant for the plant from the US government last year.
Piedmont has interests outside the US as well. In Quebec, Canada, Piedmont has a 25 percent interest in the Sayona Quebec joint venture with Sayona Mining (ASX:SYA,OTCQB:SYAXF). The two companies successfully restarted spodumene production at Sayona Quebec’s North American Lithium (NAL) project in March. In Ghana, Piedmont has an earn-in agreement for up to a 50 percent interest in Atlantic Lithium’s (ASX:A11,LSE:ALL,OTC Pink:ALLIF) lithium portfolio, including its flagship Ewoyaa project, which Piedmont plans to use to partially feed its Tennessee plant.
In mid-February, Piedmont announced that LG Chem (KRX:051910) was investing US$75 million in Piedmont, and that the battery maker had signed a four year offtake agreement for a total of 200,000 MT of spodumene from the NAL project; it will be used to create cathode materials that comply with the US Inflation Reduction Act. Piedmont’s share price hit a year-to-date peak of US$73.46 on the news before moving back down in the following weeks.
In early March, Piedmont’s share price was hurt by a short seller report written by Blue Orca. Piedmont invested in Atlantic Lithium in 2021, and Blue Orca claims that some of that company’s licenses were obtained by “making secret payments … (to the) family of a high-level Ghana politician.” Blue Orca, which has a short interest in Piedmont, said this makes the Ghana government unlikely to approve Atlantic’s mining licenses for Ewoyaa, which would impact plans for the Tennessee plant.
Atlantic firmly denied the allegations and said that the targeted licenses aren’t part of its mining license application for Ewoyaa. On top of this, Piedmont stated that even without supply from Ewoyaa, it will be able to secure supply elsewhere from companies looking to participate in the US supply chain.
Piedmont’s share price moved back up on the March 30 news that Piedmont and Sayona successfully restarted spodumene production at the NAL project. According to the release, NAL is “the only major source of new spodumene production expected in North America in the next two years.” The operation is expected to produce 226,000 MT annually and is set to begin commercial shipments in Q3.
In April, the company filed its feasibility study for the Tennessee plant, which will produce 30,000 MT of lithium hydroxide annually. Construction of the plant is expected to begin in 2024. Estimated study economics show an after-tax net present value of US$2.5 billion at an 8 percent discount and an after-tax internal rate of return of 32 percent.
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