ASX-listed Lithium Universe has confirmed that it will adopt a “same equipment, same supplier” procurement strategy for its Bécancour lithium refinery project, in Québec, Canada.
This follows a recent visit by Lithium Universe board members and CEO Alex Hanly to consulting engineering and project implementation firm Hatch’s Shanghai procurement office to establish a procurement strategy that replicates the procurement success achieved by Galaxy Resources at the Jiangsu lithium carbonate plant project in China more than a decade ago.
The Jiangsu project had between 60% and 70% of its plant supplied by Chinese suppliers, with the remainder sourced from global suppliers.
By implementing rigorous quality control measures at the supplier's manufacturing site, Galaxy was able to acquire quality equipment that aligned with international engineering standards. Lithium Universe seeks to follow this model.
Lithium Universe has reported that local fabricators have been servicing the Chinese lithium refinery industry for the last 15 years and that key suppliers used for the Jiangsu project have become the backbone of the rapid expansion across the country.
These same key suppliers used by the Galaxy team are known to Lithium Universe and are therefore considered to be reliable and to provide an acceptable quality product, the company added.
“A key aspect of our approach is to use equipment and top-quality suppliers that we have used before. By sticking with what works, we aim to expedite the engineering process and ensure seamless coordination among all parties involved.
Building on the successes of past projects, such as Jiangsu where 60% to 70% of our suppliers were Chinese, we are confident in our ability to manage quality while optimising efficiency,” chairperson Iggy Tan said on May 28.
Lithium Universe aims to reduce the number of unknowns when planning the construction of the Bécancour refinery and will, therefore, partner with vendors that have a proven record of delivery of specific plant and equipment.
The “same equipment, same supplier” procurement strategy will enable Lithium Universe to be competitive and to build cost-effective lithium refineries.
Firstly, using proven equipment designs, there will be reduced engineering work required for the definitive feasibility study (DFS). Secondly, with the ‘same supplier’ strategy, Lithium Universe can tap into the original supplier’s design and construction experience, minimising the cost and time associated with repeated detailed engineering.
Another key advantage is that the preferred suppliers will be able to provide Lithium Universe with accurate quotations, as opposed to budget numbers. Alternative suppliers closer to Canada will be used if the original suppliers are no longer in business.
Key board members and the CEO reinforced this procurement strategy, design and logistics with the Hatch procurement office in Shanghai.
In addition, Lithium Universe met with the key equipment providers in Shanghai to finalise the design for Bécancour. In this instance, the kiln will be fabricated in China and shipped to Canada for installation.
Using proven equipment from proven suppliers, this process aims to fast-track the DFS process. Another advantage of using established offshore suppliers is the mitigation of potential scheduling disruptions caused by the increased demand for construction materials and highly skilled tradespeople.
This surge in demand is expected owing to the numerous battery supply chain projects scheduled for construction over the next four years in Canada.
Lithium Universe said it aims to bridge the lithium conversion gap in North America while supporting both provincial and federal governments in restoring the battery supply chain in Canada. The company's objective is to collaborate with local Canadian suppliers, providing training and facilitating knowledge transfer while using the Bécancour refinery as a blueprint for replication elsewhere in North America.
“By fostering strong partnerships and implementing rigorous quality control measures, we are well-equipped to deliver a quicker, cheaper, and more reliable project. One of the most significant advantages of our approach is the reduction in lead times, allowing us to execute tasks with greater speed and precision,” Tan said.