Lithium Universe’s Bécancour Lithium Refinery project in Québec is poised to capitalise on a sharp lithium price rebound, with current prices well above feasibility study forecasts. The company’s counter-cyclical development strategy is gaining momentum amid renewed market confidence.
- Bécancour DFS completed during lithium price trough below US$10,000/tonne
- Current lithium carbonate spot price around US$24,000/tonne, doubling in months
- Project economics robust with NPV US$718 million and IRR 21%
- Counter-cyclical strategy validated by faster-than-expected lithium price recovery
- Re-engagement with stakeholders and pursuit of offtake agreements underway
Context and Strategy
Lithium Universe Limited (ASX, LU7) has emerged from the lithium market downturn with its flagship Bécancour Lithium Refinery project in Québec, Canada, well positioned to benefit from a rapid recovery in lithium prices. The company’s counter-cyclical approach saw it advance the project through one of the most severe lithium price troughs in recent history, completing a Definitive Feasibility Study (DFS) in early 2025 when battery-grade lithium carbonate prices had dipped below US$10,000 per tonne.
This strategic decision to push forward during a market lull contrasts with many peers who paused development amid oversupply and weak demand. Lithium Universe’s leadership, drawing on extensive industry experience, anticipated a faster-than-consensus price rebound and chose to invest in engineering, environmental planning, and stakeholder engagement to ensure readiness for the market upswing.
Robust Project Economics Amid Price Surge
The DFS outlined a project designed to produce approximately 18,270 tonnes per annum of battery-grade lithium carbonate using proven continuous processing technology adapted from the Jiangsu Lithium Carbonate refinery. The study was deliberately conservative, assuming a long-term lithium carbonate price of US$20,970 per tonne, below historical peaks and current market prices.
Since the DFS release, lithium carbonate prices have more than doubled, reaching around US$24,000 per tonne. This surge significantly exceeds the DFS price assumptions, enhancing the project’s economic outlook. Under the DFS assumptions, the Bécancour project boasts a pre-tax Net Present Value (NPV) of US$718 million, an Internal Rate of Return (IRR) of 21%, and a payback period of just under four years. With current prices, these metrics are poised to improve, potentially boosting operating margins and cash flow generation.
Advancing Commercial and Stakeholder Engagement
In response to the improved market conditions, Lithium Universe has re-engaged with key stakeholders, including spodumene concentrate suppliers, downstream lithium carbonate customers, government authorities, and potential strategic and financial partners. The company is actively pursuing long-term offtake agreements to secure feedstock and ensure reliable supply for the refinery.
Situated within Québec’s growing battery materials ecosystem, the Bécancour project benefits from access to low-cost green hydroelectric power, excellent logistics, and proximity to North American markets. This strategic location, combined with the company’s readiness, positions Lithium Universe to capitalise on the tightening lithium supply-demand balance.
Broader Strategic Initiatives
Beyond Bécancour, Lithium Universe is advancing a second lithium refinery project in Brownsville, Texas, aiming to create a binational lithium refining platform. This initiative addresses North America’s lithium conversion capacity shortage and aligns with regional policy incentives, such as the U.S. Inflation Reduction Act. The Texas refinery will replicate the proven design from Bécancour, enabling rapid deployment to serve nearby gigafactories.
Additionally, the company is innovating in photovoltaic solar panel recycling, developing technologies to recover silver and other critical materials sustainably. This diversification underscores Lithium Universe’s commitment to closing supply chain gaps and supporting circular economy principles in the clean energy sector.
Leadership Perspective
Executive Chairman Iggy Tan emphasised the validation of the company’s counter-cyclical strategy, noting that advancing the Bécancour project during a severe downturn has positioned Lithium Universe ahead of many peers. The rapid lithium price recovery, surpassing DFS assumptions, provides strong momentum to progress the next phase of project development with confidence.
Bottom Line?
As lithium prices continue to climb, Lithium Universe’s readiness and strategic positioning could translate into significant value creation in the near term.
Questions in the middle?
- Will Lithium Universe secure long-term offtake agreements to underpin refinery feedstock?
- How will financing and commercial partnerships evolve amid the improved lithium market?
- What is the timeline for advancing the Brownsville, Texas refinery alongside Bécancour?