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Minor Piedmont announces plans for new lithium refinery plant to propel domestic EV supply chain

Piedmont Lithium announced Thursday plans to build a new lithium refinery in Tennessee as the United States scrambles to develop a domestic supply chain for raw materials critical to the energy transition.

Thursday’s announcement follows the largest climate financing package in U.S. history signed by President Joe Biden in August. The package includes incentives to revitalize the domestic supply chain for electric vehicle batteries, but Piedmont said plans for the factory are under development ahead of the Inflation Reduction Act.

Having selected a site in McMinn County, the company will begin the process of securing the necessary permits, which can take time. Still, the company aims to start construction in 2023 and start production in 2025.

When fully operational, the plant will produce 30,000 tons of lithium annually, according to the company, making it the largest lithium refinery in the United States. Piedmont says it will mass produce enough material to supply about 500,000 electric cars a year.

Piedmont currently has no active mines in the United States, so when the facility is operational, it will process spodumene concentrate from Piedmont’s international operations in Quebec and Ghana.

Ultimately, the company wants to use domestically mined lithium. The company is planning a mine and another factory in North Carolina, but CEO Keith Phillips said it would be difficult from a permit standpoint because both the mine and the factory are co-located.

Albemarle operates the only meaningful lithium mine in the United States at Silver Peaks, Nevada. Additionally, only 2.1% of lithium is refined in the United States, according to data from Benchmark Mineral Intelligence. China dominates the industry, refining more than half of the world’s lithium supply.

But if its North Carolina mine and plant in Piedmont secure the necessary permits, the company expects lithium production to double, supplying 1 million electric vehicles a year.

Piedmont Lithium’s announcement also comes at a time when automakers are rushing to launch a vast array of electric vehicles. According to some forecasts, there won’t be enough lithium to meet demand in the near future. The International Energy Agency estimates that lithium demand will increase more than 40-fold by 2040, he said, to meet the targets set out in the Paris Agreement.

Building a new mine takes years. They are capital intensive and may face permit challenges. There are those who oppose new mines, arguing that the world should instead focus on existing production.

Piedmont’s Phillips noted that last year alone, $33 billion was announced for US electric vehicle battery manufacturing plants, which would require 500,000 tons of lithium annually.

“This is more than all lithium hydroxide currently being produced in the world, so clearly the industry faces a critical resource shortage,” he told CNBC. “Anyone who can produce materials that can be supplied in this market, especially in the United States, is well positioned.”

Piedmont plans to invest approximately $600 million in the development of its Tennessee facility.

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