ANDRADA Mining may take on a strategic partner to accelerate the development of lithium production from its Uis mine in Namibia.
Uis, previously operated by Iscor for tin production, is being re-developed by Andrada (formerly AfriTin). However the presence of significant lithium resources, coupled with the improvement in the mineral’s price, has opened the door to product diversification.
Afritin has targeted tin concentrate production of between 1,400 to 1,500 tons for its 2024 financial year, a year-on-year increase of between 45% and 56%. In terms of its lithium expansion plans, however the company said in March it was due to complete a lithium bulk-testing pilot facility in June.
“As Andrada accelerates its trajectory towards producing lithium and establishing Namibia as a major producer, it is imperative that it collaborates with an appropriate strategic partner to realise value from this opportunity within the shortest timeframe,” Anthony Viljoen, CEO of Andrada said in a statement today.
The company had consequently employed Barclays Bank in order to identify a potential partner following “numerous unsolicited approaches from international entities seeking to participate in the acceleration of the company’s lithium strategy,” Andrada said.
Andrada said in April last year that it would launch a ‘bank-ready’ feasibility study of Uis for a phase two expansion that would also produce lithium and tantalum.
A preliminary economic assessment (PEA) which was conducted in-house found that the expansion would require $440m in capital. This would be funded from cash generated by Uis as well as debt and an equity component.
Andrada said today that the focus of retaining Barclays was to identify a partner “with appropriate technical and financial capabilities for expediting the lithium opportunity”.
“The strategic assessment will enable Andrada to explore several funding permutations based on existing and proposed options, to determine the one that is most aligned to its overall objectives,” it said.
Lithium, which is critical in the manufacture of electric vehicle batteries (BEVs), is the world’s third most common element. But production of the mineral in grades the automotive market can use is not abundant.
According to SFA Oxford, a metals research company that Sibanye-Stillwater owns, demand is expected to grow nearly 25% every year from now until 2026 by which time some 944,000 tons of demand will come from BEVs alone.
Elon Musk, CEO of Tesla, urged more entrants to the mining sector saying that producing lithium for use in battery electric vehicles was a license to “mint” money.
Viljoen said previously that Andrada’s larger strategy was to become a “multi-tech metal producer” over five years. It also intended to add tungsten to its product suite through the development of the Brandberg West prospect, situated about 107 kilometres from Uis.
Shares in the company which trade on London’s AIM have gained nearly 42% since March but on a 12 month basis the stock is 19% lower. It is currently valued at £78.4m.