Riyadh’s Obeikan Group and US-headquartered Critical Metals Corporation have agreed to establish a joint venture to construct and commission a large-scale lithium hydroxide processing plant in Saudi Arabia.

According to Critical Metals Corporation, the 50:50 joint venture, known as Arabian New Energy Company, will develop, construct and commission a lithium hydroxide processing plant and operate it to convert lithium spodumene concentrate from the Wolfsberg lithium project in Austria.

The facility in Saudi Arabia is expected to be developed to meet the minimum initial capacity and product specifications based on Critical Metals Corporation’s long-term supply agreement with German carmaker BMW.

Critical Metals Corporation said it has accepted the assignment of the European Lithium-Obeikan Group Investment Company (Obeikan Group) joint venture following an independent committee review.

Under the shareholders' agreement, Arabian New Energy will seek the exclusive right to purchase spodumene mined from the current resource at Wolfsberg Zone 1. 

Subject to the successful commissioning of the plant, “the Wolfsberg Project Zone 1 will sell the lithium spodumene concentrate to the JV company over the life of the current resources of the Wolfsberg mine at a reduced rate, with a floor and ceiling price subject to final agreement of the parties”.

European Lithium and Obeikan Group have also executed a deed of assignment to assign all rights under the 31 May 2023 binding agreement to Critical Metals Corporation.

Tony Sage, CEO and chairman of Critical Metals Corporation, said: “Critical Metals Corporation has two dedicated partners to ensure we fulfil our ambition to become the first European producer of both spodumene and hydroxide.

“With these key milestones having been achieved, we expect the next steps will become a lot easier. Over the next several quarters, we plan to update and finalise the DFS on these projects, and to secure the necessary funding to commence construction.”

He added that the board of the newly formed Arabian New Energy will oversee the construction of the hydroxide plant, with funding sourced from within Saudi Arabia.

The company did not disclose the investment’s value and the planned facility’s location in Saudi Arabia. 

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