Lithium Australia and Mineral Resources (MinRes) have signed an agreement to form a joint venture (JV) and develop a pilot plant for lithium iron phosphate to be used in EV batteries.

MinRes has a growing portfolio of mining operations across multiple commodities, including lithium and iron ore, with a market capitalisation of around A$13.6bn ($8.9bn).

Under the Agreement, MinRes will fully fund the development and operation of a pilot plant and engineering study for a demonstration plant, which would cost up to A$4.5m ($2.9bn).

MinRes will also supply the required raw materials to support the extraction process to Lithium Australia, at free of cost.

Lithium Australia will contribute its patented LieNA technology, which involves caustic digestion of spodumene and will manage the pilot plant’s production process.

LieNA technology has the potential to enhance lithium extraction yields by up to 50% compared to current market performance.

Lithium Australia CEO Simon Linge said: “MinRes is the perfect partner to complement our leading lithium extraction technology, given its extensive owned operations and strategic movement downstream into the battery materials sector.

“Securing a development partner is also noted as a significant step within Lithium Australia’s recently released roadmap and serves as a powerful validation of our patented technology.

“We are excited by the future opportunity to licence our proven high-value technology to all existing and new lithium mines across Australia and the rest of the world.”

Upon completion of the pilot plant operations and engineering study, MinRes and Lithium Australia will form a 50:50 JV to commercialise the LieNA technology.

Each company will own a 50% interest in the JV, which will wholly own the LieNA technology, and license it to third parties at a royalty rate of 8%.

The JV will initially license the LieNA technology to a larger demonstration plant which will extract lithium salt at a commercial scale, under the licence.

MinRes can opt to independently fund, develop, and operate the demonstration scale plant under a license agreement with the JV.

The licencing will initially target jurisdictions, including Western Australia and North America, with the potential for expansion into Europe and Africa.