Saudi’s Obeikan Group to Form JV with European Lithium Ltd

A proposed Joint Venture (JV) between European Lithium Ltd, one of the major players in the production of Lithium Hydroxide, and Saudi Arabia’s Obeikan Investment Group is planning to develop a new cutting-edge hydroxide processing plant in the Kingdom.

The JV, which was announced on Monday, is expected to be finalised along with the shareholder agreement by end of March this year. The capital investment represented for the processing plant will be fully funded through the JV, which is structured on a 50:50 basis focusing on developing, constructing and commissioning the lithium hydroxide processing plant.

The forthcoming facility will substantially reduce energy costs, leading to operational savings in operational expenditure (opex). It also anticipates lower capital expenditure (capex) for operations related to the Wolfsberg Lithium Project in Austria once the new facility becomes operational.

One of the major aspects of the agreement is the exclusive right granted to the JV to purchase spodumene extracted from Wolfsberg’s current resource. This exclusive arrangement enhances the long-term sustainability and stability of the Wolfsberg Lithium Project.

The agreement also aligns seamlessly with Obeikan’s strategic objectives and capitalizes on the industrial prowess of Saudi Arabia. Beyond operational efficiencies, this venture holds the potential to fortify the economic outlook for European Lithium’s upcoming projects, positioning the company as a significant player in the global lithium market.

Looking ahead, the company is set to commence Zone 2 drilling at Wolfsberg in the second quarter of the current year, capitalizing on the robust momentum in its resource development initiatives. This partnership also aims to convert lithium spodumene concentrate from Wolfsberg into high-quality lithium hydroxide.

Leveraging Industrial Strength

The agreement with European Lithium aligns with Obeikan’s strategic goals and leverages Saudi Arabia’s industrial strength. European Lithium has previously confirmed the potential of Zone 2 to mirror the resources declared in Zone 1.

Abdallah Obeikan, CEO of Obeikan Investment Group, said that their partnership will be beneficial for all stakeholders. This partnership will combine EUR expertise with the industrial knowledge of Obeikan and the strength of Saudi Arabia.

“The alignment of expertise, strategic goals, and regional strength positions this collaboration as a promising venture with mutual benefits for all involved stakeholders,” Obeikan added.

European Lithium Chairman Tony Sage said that the partnership paves the way for significant opex savings including greatly reduced energy and financing costs.

“We look forward to progressing our plans to harness the latest technology in developing a facility of the highest quality and efficiency, and in doing so, strengthen the economics of Wolfsberg and our future projects,” Sage added.