Liontown has awarded a $35 million engineering, procurement and construction management services (EPCM) contract for its Tier-1 lithium mining site at Kathleen Valley.
The EPCM services contract was awarded to Lycopodium, and will include pre-operational testing and commissioning services through the processing facilities and associated non-process infrastructure at Kathleen Valley.
The contract was awarded after initial undertakings of the Pre-feasibility Study update for the project, followed by Value Engineering Assessments (VEAs) and subsequently the Definitive Feasibility Study (DFS) and Front End Engineering Design (FEED) services.
The EPCM contract, valued at approximately $35 million based on the agreed scope, is on terms consistent with the assumptions in Liontown’s DFS and includes fixed and reimbursable portions to ensure greater cost certainty for project engineering.
Since completion of the DFS, Lycopodium has been providing the FEED services under a preliminary services agreement.
As a result, the DFS engineering team was retained and detailed engineering is well advanced, enabling Liontown to award over 75 per cent of mechanical equipment long-lead items as well as awarding total process plant and non-process infrastructure packages with an estimated value of $103 million, ensuring that the project remains on schedule.
Lycopodium has been involved with the Kathleen Valley project since 2018 and has substantial global mineral processing and project delivery experience (which includes current engagements on multiple lithium projects and studies) which it will leverage to provide Liontown with an integrated engineering, construction and commissioning solution for delivery of the project.
The award follows Liontown’s Board’s decision to make the Final Investment Decision to proceed to develop Kathleen Valley in June 2022.
Management Comments Liontown’s Managing Director and CEO, Tony Ottaviano, said awarding the EPCM contract is another significant milestone for Liontown and the development of Kathleen Valley.
“We are delighted to have appointed a company of Lycopodium’s stature and capability, building on their long-standing involvement with the Kathleen Valley Project in overseeing testwork, piloting and design since 2018,” Mr Ottaviano said.
“We believe Lycopodium is an ideal engineering and construction partner, with substantial experience in mineral processing plant design and construction expertise, making it ideally placed to deliver the project.”
Lycopodium’s Managing Director, Peter De Leo, said, “Kathleen Valley is a lithium project of global significance that will supply vital battery minerals to the burgeoning electric vehicle and energy storage industries.
“Having worked with Liontown through the evaluation and study stages, we are extremely pleased to have the opportunity to continue into the engineering and construction phase of this exciting project.”
About the project
Kathleen Valley is one of the world’s largest and highest-grade hard rock lithium deposits and, with an initial 2.5Mtpa production capacity, it is expected to supply ~500,000 tonnes of six per cent lithium oxide concentrate per year. With first production expected in Q2 2024, the deposit will also produce tantalum pentoxide, a valuable material used in electronics and optics manufacturing.
The project is located on the western edge of the Norseman-Wiluna Greenstone Belt, about 60km north of Leinster, and 680km north-east of Perth, Western Australia. It is considered a Tier-1 battery metals asset with excellent grade and scale in one of the world’s premier mining districts.
Mining will predominantly be underground, allowing direct access to higher grade mineralisation while minimising waste and the environmental footprint of the project, with mined ore processed through a Whole of Ore Flotation circuit.
