Funding and Permitting Risks Loom as Jindalee Advances US Lithium Giant

A Generational Lithium Project Emerges

Jindalee Lithium Limited’s McDermitt Lithium Project, straddling the Oregon-Nevada border, has taken a significant step forward with the release of its December 2024 Quarterly Activities Report. The highlight is the confirmation from the Pre-Feasibility Study (PFS) of a 63-year project life, with an initial 40-year production target of 1.8 million tonnes of battery-grade lithium carbonate. This positions McDermitt as a cornerstone asset in the burgeoning US lithium supply chain, a sector increasingly critical amid global energy transition efforts.

The PFS, completed with engineering support from Fluor Corporation and other specialists, outlines a robust economic foundation. With a post-tax net present value (NPV8) of US$3.23 billion and an internal rate of return (IRR) of 17.9%, the project promises strong returns. Notably, the payback period is under five years, a compelling metric for investors eyeing long-term value in critical minerals.

Resource and Reserve: A Fraction Tapped

Jindalee’s maiden Probable Ore Reserve stands at 251 million tonnes grading 1,751 ppm lithium, equating to 2.34 million tonnes of lithium carbonate equivalent (LCE). This reserve accounts for just about 10% of the total Mineral Resource Estimate (MRE) of 3 billion tonnes at 1,340 ppm lithium, or 21.5 million tonnes LCE. The reserve’s relatively small proportion of the resource base underscores significant optionality for future expansions and production scale-ups.

The project’s open-pit mining approach benefits from a low strip ratio and soft ore, requiring no blasting, which should help contain operating costs. Processing involves attrition scrubbing, sulphuric acid leaching, and lithium carbonate precipitation, validated through metallurgical testwork producing 99.8% pure lithium carbonate, meeting industry battery-grade standards.

Financial and Operational Strengths

The PFS capital estimate is US$3.02 billion, including a 21% contingency, reflecting a Class 4 estimate with an accuracy range of +35%/-25%. Operating costs are competitive, with C1 costs averaging US$8,670 per tonne of lithium carbonate over the first 40 years, placing McDermitt in the lower half of the industry cost curve. EBITDA margins are forecast at 66% in the first decade, with sustained strong cash flow margins thereafter.

Infrastructure advantages include grid power access and proximity to US highway and rail networks, facilitating logistics. The project’s long life and scale provide resilience against capital cost fluctuations, with sensitivity analyses showing revenue (lithium price and recovery) as the primary value driver.

Strategic US Government Engagement and Permitting

Jindalee is actively engaging with US government agencies, securing a Cooperative Research and Development Agreement with the Department of Energy to innovate extraction methods aimed at reducing costs and environmental impact. The company has also applied for a Department of Defense grant to co-fund a feasibility study, enhancing financing prospects.

Permitting is progressing with no identified barriers, supported by agreements with local Native American tribes and a comprehensive environmental review underway. The project aligns with US policy priorities to secure domestic critical mineral supply chains, especially under the new administration’s push for energy security and reduced reliance on China.

Market Context and Industry Positioning

Despite recent lithium price softness, driven by oversupply and deferred projects, electric vehicle sales continue to surge globally, underpinning long-term lithium demand. Benchmark Mineral Intelligence forecasts significant lithium deficits by 2030, highlighting the strategic importance of projects like McDermitt.

Nearby US lithium projects such as Lithium Americas’ Thacker Pass and ioneer’s Rhyolite Ridge are advancing, supported by substantial government and OEM investments. McDermitt’s proximity and resource scale position it well within this emerging US lithium hub, with potential to benefit from evolving tax credits and tariffs favoring domestic production.

Looking Ahead

Jindalee’s immediate focus is securing pre-development funding and advancing technical studies toward a final investment decision by the end of 2029. The company’s expanding US team and strategic partnerships underscore its commitment to responsible development, community engagement, and environmental stewardship.

With a long-life, low-cost lithium project in a geopolitically strategic location, Jindalee is poised to play a pivotal role in the US battery materials supply chain as global demand for electric vehicles accelerates.