Lithium Universe progresses offtake discussions for Bécancour Lithium Refinery

Lithium Universe Ltd (ASX:LU7, OTC:LUVSF) has advanced its strategic development plans for the Bécancour Lithium Refinery in Québec, Canada, initiating discussions with multiple spodumene concentrate producers to secure long-term feedstock supply. 

The company is targeting a minimum 10-year supply agreement, with full ramp-up to 140,000 tonnes per annum (tpa) of SC6 spodumene by 2030. Supply is expected to start in 2028.

The company is looking to procure spodumene at benchmark pricing and retain full ownership of the lithium carbonate product, which may be sold to original equipment manufacturers (OEMs) or into the open market.

Strategic discussions with producers

LU7 has been in talks with operational and near-term spodumene developers across the North Atlantic region, including Canada, Brazil, and Africa who recognise significant logistical and tariff advantages in supplying a local Canadian converter over exporting to China. 

Transporting spodumene to China can cost up to US$100 per dry metric tonne (dmt), equating to US$800–900 per tonne of finished lithium carbonate. Should the final lithium carbonate then need to be re-imported to North America, it would incur an additional shipping cost of approximately US$200 per tonne.

Moreover, Canada currently imposes a 25% import tariff on all Chinese lithium chemicals, making local conversion a strategically and economically favourable alternative.

Supply ramp-up and delivery model

LU7 is advancing plans to secure a non-binding Memorandum of Understanding (MoU) for the full supply of 140,000 tonnes per annum of SC6-grade spodumene concentrate to its proposed Bécancour Lithium Refinery. The target tonnage would be adjusted proportionally should the lithium oxide (Li₂O) grade fall below 6%.

The company aims to convert the MoU into a definitive agreement once the Bécancour facility is fully funded and construction begins. LU7 is looking to secure a minimum 10-year spodumene supply agreement, with rolling five-year terms, to enhance security of feedstock for project financing purposes.

Initial deliveries are expected to start in 2028 at approximately 56,000 tonnes per annum, ramping up to 98,000 tonnes in 2029, and reaching the nameplate capacity of 140,000 tonnes per year from 2030. The spodumene is expected to be delivered directly to the refinery’s on-site storage facility.

While LU7 remains open to sourcing spodumene from the broader North Atlantic region—including Brazil and Africa—it is prioritising domestic Canadian feedstock to reduce geopolitical and logistical risks associated with overseas shipments and offshore conversion.

According to the Definitive Feasibility Study (DFS), the planned refinery will convert the spodumene into approximately 18,270 tonnes per annum of battery-grade lithium carbonate, bolstering Canada’s emerging electric vehicle (EV) and energy storage supply chains.

Benchmark pricing and offtake structure

The company intends to acquire spodumene ore at prevailing market rates and does not intend to pursue tolling arrangements. 

LU7 will retain ownership of the refined lithium carbonate, allowing flexibility in sales strategy—whether via market-based transactions or direct OEM partnerships.

Market interest and next steps

Executive Chairman Iggy Tan said: “There are several interested potential spodumene suppliers that could meet the 2028 timeframe and discussions are ongoing. There is real interest in the market. The company will continue to keep the market informed concerning progress of these discussions and negotiations.”

Once spodumene feedstock is secured, LU7 plans to turn its focus to attracting a strategic OEM partner to underpin offtake for its battery-grade product.