Piedmont Lithium upset North Carolina neighbors for supplying Tesla

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GASTON COUNTY, NC, July 20 (Reuters) – In its quest to build one of the largest lithium mines in the United States, Piedmont Lithium Inc (PLL.O) overlooked a crucial constituency: its North Carolina neighbors.

Last fall, Piedmont signed a contract to supply US electric car maker Tesla Inc (TSLA.O) with lithium from its North Carolina deposits, increasing the company’s inventory tenfold.

Piedmont has also hired investment banks to find investors for its $ 840 million project, which would include an open-air pit more than 150 feet deep and facilities to manufacture lithium-based battery chemicals for electric vehicles (EV) .

However, the company has not applied for a state mining permit or required zoning change in Gaston County, west of Charlotte, though it has been telling investors since 2018 that it is on the verge of doing so.

Five of the seven members of the district’s committee who oversee the zone changes say they could block or delay the project because Piedmont did not tell them how much dust, noise and vibration there would be, nor what water and air quality would be affected.

“Piedmont put the proverbial cart in front of the horse, so to speak,” said Tom Keigher, Chairman of the Board of Commissioners. “Why in the world would you want to do this deal with Tesla before you even get permission to run the mine?”

Piedmont said it was waiting to reach out to officials to refine its plans – it released a third iteration last month – and to win a client to show that the mine is open for its planned 20-year lifespan could stay.

“We finally have a project to talk about,” said Keith Phillips, Piedmont’s chief executive officer.

“Maybe it would have been better if (Commissioners) had been kept up to date. We didn’t really have the time or resources to do it and we didn’t even know what to tell them until now.”

The deteriorating relationship between Piedmont and the county leaders reflects wider tensions in the United States as resistance to living near a mine collides with the potential of electric vehicles to curb climate change.

Piedmont has already spent $ 58 million on the project, which would produce about 30,000 tons of lithium annually, enough to make about 3 million electric vehicles.

The company originally planned to relocate its chemical plant to a neighboring district, but now plans to build it near the mine, which should reduce truck traffic. Piedmont also plans to crush rocks in the mine to reduce dust and incorporate solar energy.

TUESDAY MEETING

In September 2018, Piedmont informed investors that it would probably receive permits by the end of 2019. In August 2019, executives said they would apply for permits and reallocations “in the coming months.”

Piedmont said both times it was “aware of no reason” why the county would not approve zone changes, even though it had not yet given any information to the commissioners. In December, Piedmont said it expected to get local development permits before the end of June.

The company said the delays were partly due to weak lithium prices in recent years.

Piedmont was supposed to meet with commissioners in March, but canceled with three days’ notice, which further strained the relationship. Piedmont said it canceled that meeting to further refine its plans.

“This was the worst rollout of a project from a company I’ve ever seen,” said Chad Brown, a commissioner who opposes the mine.

Phillips, CEO of Piedmont, will give a 15-minute presentation to commissioners on Tuesday evening, although there is no vote.

Phillips said he will tell Piedmont commissioners that they will apply for a state mining permit this summer, start construction in April 2022 and go into production in the second half of 2023.

Piedmont’s deal with Tesla calls for the delivery of around 53,000 tons of spodumene concentrate to the automaker’s proposed lithium hydroxide chemical plant in Texas, which begins sometime between July 2022 and July 2023.

Piedmont declined to discuss the Tesla deal, but hinted that the automaker may not need deliveries until 2023.

“We are confident that in our relationship with our customers we can manage lithium supplies when needed,” said David Klanecky, Piedmont’s chief operating officer.

Tesla, which has other lithium suppliers, didn’t respond to requests for comment. The North Carolina Department of Environmental Quality, which issues mining permits, said it expects an application “in the near future.”

State officials added that their review process could stretch for more than a year as they solicit comments from at least six other state and federal agencies.

“I won’t even accept a Piedmont rededication application until they have their government approval in hand,” said Brian Sciba, director of Gaston County’s Planning and Zoning Bureau.

‘MY FOR MY PROPERTY’

Piedmont, whose shares are traded in Australia and traded on the Nasdaq in the United States earlier this year, owns or controls more than 3,000 acres (12 square kilometers) in the western corner of rural Gaston County.

While some landowners are willing to sell if the offer is tempting enough, others say Piedmont has bullied them.

“They told me that if I don’t sell, they will only mine around my property,” said Emilie Nelson, whose 14 acres of Piedmont has been trying to buy since 2017. Piedmont said it was unaware of whether any of its contractors made the alleged threat but did not approve or condone it.

“We always treat people with respect,” said Patrick Brindle, Vice President for Project Management in Piedmont. “And if we weren’t that kind of operator, we wouldn’t be able to make as many agreements with landowners that we have.”

Landowners said they would prefer to build just one processing plant in Piedmont and rely on a foreign mine for lithium supply. Livent Corp (LTHM.N) and Albemarle Corp (ALB.N) operate lithium processing plants in the county that source the metal from South America.

Piedmont, which recently bought stakes in lithium projects in Quebec and Ghana, said it prefers to mine and process the metal at the Gaston County site. Piedmont’s deal with Tesla did little to impress locals. More than 1,500 have signed a petition urging officials to block the mine.

“There is no doubt that the mine would benefit our country and the green power industry,” said Tracy Philbeck, a commissioner. “But it would have a negative impact on our community.”

Reporting by Ernest Scheyder; Editing by Amran Abocar and Marguerita Choy

Our standards: The Thomson Reuters Trust Principles.


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