Australia-based battery chemicals and technology company EV Metals Group (EVM) will build a world-class battery chemicals complex in Yanbu Industrial City, on the Red Sea coast of Saudi Arabia.

Managing director Michael Naylor tells Kallanish in an exclusive interview the decision on the “strategic location” follows a conditional investment agreement signed between the Royal Commission for Jubail and Yanbu (RCJY) and EVM Arabia. The roughly 127-hectare land earmarked for the complex is larger than previously planned, to accommodate a proposed capacity expansion.

» Watch the exclusive interview

The site will have easy access to exports route to Europe and North America, as well as proximity to proposed battery and electric vehicles clusters in Saudi Arabia. “The Vision 2030 of the Kingdom is the perfect fit for the development of this complex,” says Naylor, pointing to the diversification of the Saudi economy and its push towards renewables, clean energy and electric vehicles.

The multi-phase project will feature a plant to produce lithium hydroxide monohydrate (LHM); a nickel chemicals plant to produce nickel, cobalt and manganese sulphate; and a pre-cathode active materials plant. In the first stage, EVM plans to commission a two-train lithium plant with capacity to produce 50,000 tonnes/year of LHM in late 2024 and ramp-up in early 2025. The second train will be commissioned six months after the first.

The project also includes a three-train nickel plant with capacity to produce 300,000 t/y of high-purity nickel sulphate, set to be operational in 2026. A pre-cathode active materials plant should follow. Initial investment for the two-train lithium plant is set at $800 million, with the amount rising to up to $3 billion by 2030.

Amec Foster Wheeler Australia is conducting the front-end engineering design (FEED) study for the first two trains of LHM. Study completion is scheduled for Q4 2022, enabling construction to start in Q1 2023. Thanks to the support of Saudi agencies, EVM is now working to double its planned LHM production capacity to 100,000 t/y, says Naylor.

First mover advantage

Initially, EVM will process spodumene concentrate containing 6% lithium oxide (SC6) from Western Australia. Phase I is expected to require 330,000 t/y of SC6, for which offtake negotiations have started. It will also rely on its nickel resources in Western Australia, but it is simultaneously pushing for first mover advantage in the mining of its own feedstock in Saudi Arabia, including rare earth elements.

The company has applied for exploration licenses over areas with identified critical raw materials including lithium, nickel, cobalt, copper, platinum group metals and rare earths in Saudi Arabia. The latter, particularly, is a strategic development area for Saudi to open up the global supply chain, currently dominated by China, to key markets of Europe and North America.

“It’s strategic now for Western economies to develop independent supply chains because here’s where the Chinese are headed according to our market intelligence: Would you like to buy rare earths? Yes. What do you want them for? Permanent magnets for motors for electric vehicles. And they will say: here’s the car,” says Naylor, suggesting Chinese suppliers are in control of what to offer and to whom.

“It’s a new industry for the Kingdom and very much fits the diversification strategy,” he adds. “The Kingdom hasn’t looked at this before and when it did, it was 20 or 30 years ago … the world has changed. So, from our perspective in Western Australia they’re [Saudis] about 30-50 years behind us in these areas. And that’s what’s been very clever with the strategy that our chairman Abdullah S. Busfar has put in place … and now has this company in a position to bring to the Kingdom world-class digital capabilities to develop these critical raw materials.”