Piedmont ‘puts cart before the horse’ in electric vehicle plans
• Company has signed a deal with Tesla and is seeking investors, but does not yet have a mining permit
In its quest to build one of the largest lithium mines in the US, Piedmont Lithium has overlooked one crucial constituency: its North Carolina neighbours. Piedmont signed a deal in the last northern autumn to supply US electric carmaker Tesla with lithium sourced from its deposits in North Carolina, sending the company’s stock up 10-fold.
Piedmont also hired investment banks to find investors for its $840m project, which would include an open-air pit more than 152m deep and facilities to produce lithium-based electric vehicle (EV) battery chemicals.
The company, however, has not applied for a state mining permit or a zoning variance in Gaston County, just west of Charlotte, despite telling investors since 2018 that it was on the verge of doing so.
Five of the seven members of the county’s board of commissioners, who control zoning changes, say they may block or delay the project because Piedmont has not told them what levels of dust, noise and vibrations will occur, nor how water and air quality will be affected.
“Piedmont has sort of put the proverbial cart before the horse,” said Tom Keigher, chair of the board of commissioners. “Why in the world would they make this deal with Tesla before they even have approval for the mine?”
Piedmont said it waited to approach officials to refine its plans — it published a third iteration last month — and to secure a customer to show that the mine could stay open for its projected 20-year lifespan.
“We finally have a project to debut and really talk about,” said Keith Phillips, Piedmont’s CEO.
“Maybe it would have been better had [commissioners] been in the loop constantly. 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 county leaders reflects broader tension in the US as resistance to living near a mine clashes with the potential of EVs to mitigate climate change.
Piedmont has already spent $58m on the project, which would produce about 30,000 tonnes of lithium annually, enough for about 3-million EVs.
The company originally planned to put its chemical plant in a neighbouring county but now intends to build it near the mine, a step that should reduce truck traffic. Piedmont also plans to crush rock in the mine pit, alleviating dust, and incorporate solar power.
In September 2018, Piedmont told investors it expected to obtain permits by the end of 2019. In August 2019, executives said they would apply for permits and rezoning “in the coming months”.
‘WORST ROLLOUT’
Piedmont said on both occasions it was “not aware” of any reason the county would not approve zoning changes, even though it had yet to present any information to commissioners. In December, Piedmont said it expected to receive local zoning approval before end-June.
The company said the delays were due in part to weak lithium prices in recent years.
Piedmont had been set to meet commissioners in March, but cancelled with three days’ notice, further straining the relationship. Piedmont said it cancelled that meeting to further refine its plans.
“This has been the worst rollout of a project from a company I’ve ever seen,” said Chad Brown, a commissioner who opposes the mine.
Phillips, Piedmont’s CEO, was scheduled to give a 15minute presentation to commissioners on Tuesday night, though no vote will be held.
Phillips said he will tell commissioners that Piedmont expects to apply for a state mining permit this summer, begin construction in April 2022 and be in production by the second half of 2023.
Piedmont’s deal with Tesla involves supplying about 53,000 tonnes of spodumene concentrate to the carmaker’s planned lithium hydroxide chemical plant in Texas starting between July 2022 and July 2023.
Piedmont declined to discuss the Tesla arrangement but hinted that the carmaker may not need supply by 2023.
“We ’ re confident in the relationship we have with our customer to be able to manage the supply of lithium when they need it,” said David Klanecky, Piedmont’s COO.
Tesla, which has other lithium suppliers, did not 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’m not even going to accept an application from Piedmont for rezoning until they have their state permit in hand,” said Brian Sciba, director of Gaston County’s planning and zoning office.
Piedmont, whose stock trades in Australia and began trading on the Nasdaq in the US earlier this year, owns or controls more than 12km² in a corner of rural Gaston County.
While some landowners are prepared to sell if the offer is enticing enough, others say Piedmont has bullied them.
“They told me that if I don’t sell, they’ll just mine around my property,” said Emilie Nelson, whose 5.6ha Piedmont has tried to buy since 2017.
Piedmont said it is unaware if one of its contractors made the alleged threat, but did not authorise or condone it.
RESPECTFULLY
“We always deal respectfully with folks,” said Patrick Brindle, Piedmont’s vice-president of project management. “And if we weren’t those kind of operators, I don’t think we would be successful in entering into the number of agreements with landowners that we have.”
Landowners said they would prefer that Piedmont build only a processing plant and rely on a foreign mine for lithium supply. Livent and Albemarle operate lithium processing plants in the county that source the metal from South America.
Piedmont, which recently bought stakes in Quebec and Ghana lithium projects, said it prefers to mine and process the metal at the Gaston County site.
Piedmont’s arrangement with Tesla has done little to impress locals. More than 1,500 have signed a petition asking officials to block the mine.
“There’s no doubt the mine would benefit our country and the green energy industry,” said Tracy Philbeck, a commissioner. “But it would have a negative impact on our community.”
WE DIDN ’ T REALLY HAVE THE TIME OR RESOURCES TO [KEEP COMMISSIONERS IN THE LOOP]
THEY TOLD ME THAT IF I DON’T SELL, THEY ’ LL JUST MINE AROUND MY PROPERTY