Critical Metals Corp. (NASDAQ: CRML) says it's finalized a deal with Saudi Arabia's Obeikan Group to build a large-scale lithium hydroxide processing plant in the kingdom.
The two will form an equal joint venture to develop and operate the plant, which will convert lithium spodumene concentrate from Critical Metals' Wolfsberg lithium project in Austria.
The deal, which was announced last month and has been approved by an independent committee formed by Critical Metals, creates a new company called Arabian New Energy. It will have exclusive rights to purchase spodumene mined from the current resource at Wolfsberg (Zone 1). The facility is expected to be developed to meet the minimum initial capacity and product specifications based on Critical Metals' binding long-term supply agreement with BMW. Those terms have not been disclosed.
ASX-listed European Lithium merged with Sizzle Acquisition Corp. to create Critical Metals in March. Its Wolfsberg project is Europe's first fully permitted lithium project. A definitive feasibility study was produced in 2023, but the construction of the hydroxide plant now may be less expensive and expected operating costs have improved, Critical Metals CEO Tony Sage told The Northern Miner's sister publication MINING.com in an interview in March.
Sage also said the Wolfsberg project, located in Carinthia, is set to become the European Union's only producing battery-grade lithium mine by 2027.
"The assignment of this JV to Critical Metals Corp. represents another huge milestone for the Wolfsberg project," Sage said in Tuesday's news release. "Critical Metals Corp 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."
The company plans to update and finalize the feasibility studies for both projects over the next few quarters, Sage added, and to secure funding for construction. He said the board of Arabian New Energy will oversee construction of the hydroxide plant, with funding for the project sourced from Saudi Arabia.
The news comes just a month after Critical Metals announced it will acquire a controlling stake in one of the world's biggest rare earth projects, Tanbreez in Greenland.
Critical Metals shares traded at US$10.83 this morning for a market cap of US$884.2 million.