Piedmont Lithium [ASX:PLL] shares fell 5% this morning as the lithium developer updated the market on plans for its new lithium hydroxide project in Tennessee.
The lithium stock — like many of its counterparts — is having a turbulent 2022 after strong bidding last year.
PLL shares are up a modest 5% over the past 12 months, down 20% from their 52-week highs:
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Piedmont picks Tennessee for hydroxide plant
Today, Piedmont presented some details regarding its plan for a lithium hydroxide plant in Tennessee, US.
PLL forecasts this plant to have planned production of 30,000 metric tonnes per year of lithium hydroxide, which will add to PLL’s existing Carolina Lithium planned production.
Together, both operations are expected to boost lithium hydroxide capacity to 60,000 annual tonnes by 2026.
Piedmont anticipates first production in 2025, with Kiewit Corp and Primero group chosen for the latest project’s front-end engineering designs, and a definitive feasibility study expected by the end of 2022.
Tennessee Governor Bill Lee seemed to welcome the development:
‘Companies like Piedmont Lithium choose to call Tennessee home because of our unmatched workforce and strong business climate. I thank this company for its investment in McMinn County and commitment to create nearly 120 manufacturing jobs for Tennesseans.’
Echoing the sentiment, PLL explained that it had chosen Tennessee for its cooperative government relations.
Given its protracted regulatory issues in North Carolina, favourable government relations are important.
Piedmont CEO Keith Phillips said:
‘We are excited to announce the site of our newest project and partnership with the City of Etowah… as we advance our strategic goal of becoming a leading lithium supplier in the United States.
‘The rapid electrification of the automotive market has led to massive investments in electric vehicle and lithium-ion battery production in the United States, creating a critical need for lithium hydroxide produced in the US.
‘Our Tennessee Lithium operations should play an important role in helping to mitigate supply shortages in the American EV industry and battery supply chain, particularly in the wake of recent legislation in incentivizing the use of domestically sourced critical materials and providing tax credits for US producers.’
Will PLL’s US expansions pay off?
Piedmont was quick to say the Tennessee lithium hydroxide plant could become the largest such facility constructed in the US.
But if true, such an undertaking would be costly and not without difficulty.
Piedmont plans to invest about US$600 million to develop the operation.
In its latest quarterly report, PLL reported having US$140 million in cash and cash equivalents, so building the plant will require fresh capital and financing…
Not to mention smooth jumping through regulatory hoops, which isn’t always the case.
Overlooked lithium stocks
PLL appears to be positioning itself well in the US, at a time when the Biden administration is actively encouraging EV adoption in the US.
Biden’s public campaigning for the US economy’s EV prospects has been bolstering momentum for lithium developers.
But there’s plenty of competition out there.
So are there any overlooked lithium stocks neglected by the market?
Our experts at Money Morning believe so. In our latest report, we profiled there overlooked Aussie lithium stocks.
Regards,
Kiryll Prakapenka
