Lithium Universe Targets 36,000 tpa Capacity with New Texas Refinery

Strategic Expansion into Texas

Lithium Universe Limited (ASX – LU7) has announced a significant expansion of its lithium refining ambitions with the launch of a second lithium carbonate refinery strategy in Brownsville, Texas. This move complements its flagship Bécancour project in Québec and positions the company to build a binational refining platform that addresses the critical shortage of lithium conversion capacity in North America.

The Brownsville site, located within the Port of Brownsville Business Park, offers a unique combination of deep-water port access, multimodal transport links, and existing industrial infrastructure. These features, combined with lower labour and land costs compared to other US hubs, provide a compelling economic case for the refinery’s development.

Addressing the Lithium Conversion Gap

North America faces a widening gap between lithium battery gigafactory capacity and lithium conversion facilities. While gigafactory capacity is expected to reach 1,000 GWh by 2028, lithium conversion capacity currently lags far behind, with only about 100,000 tonnes per annum slated for development versus the 850,000 tonnes required. Lithium Universe’s dual refinery strategy directly targets this bottleneck, aiming to reduce dependence on Chinese supply chains and strengthen regional supply resilience.

The Brownsville refinery will replicate the proven design from the Bécancour Definitive Feasibility Study, which demonstrated a robust lithium carbonate refinery with a net present value of US$718 million and an internal rate of return around 21%. However, the Texas facility will be engineered for Gulf Coast conditions, incorporating hurricane resilience features rather than cold-weather modifications.

Leveraging US Policy Tailwinds

The timing of this expansion aligns closely with favourable US government policies. The Inflation Reduction Act provides tax credits and subsidies for domestic lithium processing, enhancing the financial viability of the Brownsville refinery. Additionally, US tariffs on Chinese lithium products and national security mandates further incentivize local refining capacity.

Lithium Universe plans to pursue funding opportunities through the US Department of Energy’s Loan Programs Office, leveraging its proven technology and project track record to attract federal support. The company’s Executive Chairman, Iggy Tan, highlighted the strategic importance of establishing a US foothold to capitalize on these policy tailwinds.

Complementary Growth and Feedstock Diversity

The Brownsville refinery will complement the Québec facility by serving as a US hub integrated with Gulf Coast logistics and closer to domestic gigafactories. Together, these projects form a diversified, binational platform that de-risks supply and maximizes exposure to incentives across Canada and the US.

Feedstock for the Brownsville refinery is expected to come from multiple regions, including domestic US spodumene projects in Nevada and North Carolina, Brazil, and African producers in Mozambique, Zimbabwe, and Namibia. This diversified sourcing strategy aligns with Western partners’ goals to reduce reliance on China.

Beyond Refining – PV Recycling and Silver Recovery

In addition to lithium refining, Lithium Universe continues to advance its photovoltaic (PV) solar panel recycling initiative. The company is evaluating a pilot plant and potential large-scale commercial recycling project at Brownsville, focusing initially on recovering silver and other valuable metals from discarded solar panels. This initiative addresses the growing challenge of solar panel waste and contributes to a circular economy for critical materials.