Rhyolite Ridge’s Faster Processing: Can Ioneer Sustain Low Costs Amid Lithium Price Swings?
Ioneer Ltd has enhanced the economics of its Rhyolite Ridge Lithium-Boron Project by cutting leach retention time, boosting lithium and boron production and improving key financial metrics with minimal capital cost increase.
- Leach retention time reduced from 3 to 1.5 days
- 19% increase in unlevered NPV to US$2.237 billion
- Lithium hydroxide production up 9% to 27,800 tpa
- Operating costs remain stable with US$4,628/t LCE AISC net of boric acid credits
- Project fully permitted with US$996 million DOE loan secured
Leach Optimization Drives Production Gains
Ioneer Ltd (ASX, INR, Nasdaq, IONR) has announced a significant advancement in the economics of its 100%-owned Rhyolite Ridge Lithium-Boron Project in Nevada, USA. By reducing the vat leach retention time from three days to just one and a half days, the company has materially increased lithium and boron production without increasing acid consumption. This breakthrough enables processing 15% more ore annually, raising throughput from 3.0 million tonnes per annum (Mtpa) to 3.4 Mtpa.
The shorter leach time, achieved through extensive metallurgical testwork and pilot plant programs, optimizes reagent efficiency and lithium yield per tonne of sulphuric acid consumed. This innovation has unlocked approximately 9,500 tonnes per annum of lithium carbonate/hydroxide production not committed under existing offtake agreements, positioning the project to better meet growing US strategic demand for critical minerals.
Robust Financial Metrics and Cost Position
The updated project economics reflect a 19% increase in unlevered life-of-mine net present value (NPV) to US$2.237 billion and an 8% rise in internal rate of return (IRR) to 18.0%. Annual lithium hydroxide production is forecast to increase by 9% to 27,800 tonnes, while boric acid output rises 7% to 135,500 tonnes. Importantly, these gains come with only a modest US$15 million increase in initial capital expenditure, leaving the overall capital cost estimate largely unchanged.
Operating costs remain competitive, with an all-in sustaining cash cost (AISC) of US$4,628 per tonne of lithium carbonate equivalent (LCE), net of expected boric acid revenue. This places Rhyolite Ridge in the lowest cost quartile globally for lithium production, supported by the stable revenue stream from boric acid, a commodity with historically low price volatility.
Resource and Reserve Stability with Expansion Potential
Independent Mining Consultants, Inc. updated the Mineral Resource and Ore Reserve estimates to reflect the processing improvements. The Mineral Resource increased slightly to 549 million tonnes, with an Ore Reserve of 266 million tonnes supporting a 77-year mine life. The resource flexibility and large reserve base underpin potential future expansions to further increase lithium and boron output.
The project benefits from unique mineralogy allowing vat and heap leaching, enabling on-site production of high-purity lithium and boron chemicals. The mine plan prioritizes high boron ore in the first 25 years, with stockpiling of lower boron ore for potential future processing stages.
Permitting, Financing, and Strategic Partnerships
Rhyolite Ridge is fully permitted, having received its final federal permit from the Bureau of Land Management in October 2024. The project secured a US$996 million loan from the U.S. Department of Energy Loan Programs Office, with conditions to first draw. Ioneer has launched a strategic partner process with Goldman Sachs and holds offtake agreements with major automotive and battery companies including Ford, Toyota’s Prime Planet Energy & Solutions, and Korea’s EcoPro Innovation.
Next steps include securing equity financing to complement the DOE debt, followed by a final investment decision. Construction is expected to take approximately 36 months, with first production anticipated three years post-FID.
Environmental and Operational Considerations
The project is designed with environmental sensitivity in mind, featuring on-site power generation via a steam turbine generator, low water usage, and no tailings dam or solar evaporation ponds. Measures are in place to protect the endangered Tiehm’s buckwheat plant species within the project area, with minimal disturbance to designated critical habitat.
Automation will be employed from the outset, with autonomous haul trucks enhancing safety and reducing costs. The stable boric acid market revenue stream provides a financial buffer against lithium price volatility, enhancing project resilience.
Bottom Line?
Ioneer’s leach optimization marks a pivotal step toward delivering low-cost, high-output lithium and boron from Rhyolite Ridge, setting the stage for imminent financing and construction milestones.
Questions in the middle?
- How will Ioneer secure the remaining equity financing to complement the DOE loan?
- What are the potential environmental or regulatory risks related to Tiehm’s buckwheat habitat?
- How might lithium market price volatility impact project profitability despite boric acid revenue stability?
