A new breed

Modern day mining and metals processing needs to be sustainable with limited environmental impacts during operations that can be remediated on closure and that lead to net beneficial impacts on local people and their communities. Invariably such outcomes are challenging to achieve.Lepidico is fortunate. We are able to build a highly sustainable business with positive impacts on our local communities and at the end of project life improvements to the environment where we operate in Namibia as we remediate the sites at closure and hand back the currently abandoned industrial land in Namibia for agricultural use.We start from a position of knowing our <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.lepidico.com/technology">technologies</a> and business practices are more compatible with ESG concerns than previous generations of lithium production from conventional sources. And that we are committed to a programme of continuous improvement, which we believe is entirely compatible with delivering returns to shareholders.&nbsp;

Extraction made sustainable and positive for all

Decarbonisation is a necessity to avoid catastrophe. And with global CO2 emissions currently estimated at more than 36 billion metric tons every year, commentators agree there is no single magic bullet. However, EVs - powered by electricity from solar, wind, hydro or nuclear facilities - have the potential to clean-up personal and urban transport.&nbsp;What is less well known is that there are still chasms to be jumped across on this particular path ahead.&nbsp;One known unknown is how the world’s suppliers will deliver enough lithium to produce the batteries needed to power EVs based on even conservative demand projections. Despite spot prices for battery grade lithium reaching $70,000/t in 2022, the market’s biggest uncertainty is whether its emerging substantial supply-demand deficit can be solved over coming decades.This is because EVs are experiencing exponential, tech-like growth. Yet the limitations of mining and chemicals companies prevent them from responding in kind. Large lithium extraction projects can take five to ten years or more to onstream, upstream mines even longer. Meanwhile, ESG concerns are making mining permits more difficult to obtain and challenge project economics.All of which explains why some commentators believe that the 47 million EV sales needed by 2030 to meet the International Energy Agency’s “sustainable development scenario” is an unattainable goal.One of Lepidico’s motives is to help close the gap between the demand and supply of quality sustainable lithium, ensuring more EVs can be manufactured and help make Net Zero 2050 a viable possibility.

"Our primary motive is to bring people, raw materials and technologies together to create products for a healthier plant and its inhabitants."

 It’s not only what you do 

There is always the potential that a cure for an ailment will also inflict harm, lessening the net benefit of the treatment.Lepidico has designed its business to ensure that its production of lithium and other minerals comes with no such risk.&nbsp;As you can see from our <a target="_self" rel="noopener noreferrer nofollow" href="https://www.lepidico.com/technology">underlying technologies</a>, and we attest below, the choices we have made do not just seek to mitigate harm. They seek to minimise and ultimately eliminate any negative impacts of lithium production.&nbsp;Our <a target="_parent" rel="noopener noreferrer nofollow" href="https://www.lepidico.com/company-overview#Phase%201%20Project">Phase 1 Project</a> has relatively low greenhouse gas emissions, modest water usage and a small brownfield <a target="_self" rel="noopener noreferrer nofollow" href="https://www.lepidico.com/sustainability#land-use">land</a> footprint which in time is designed to improve the environment and return it to agriculture. Our <a target="_self" rel="noopener noreferrer nofollow" href="https://www.lepidico.com/sustainability#waste-management">waste management</a> strategies are best-in-class. And we actively invest in the <a target="_self" rel="noopener noreferrer nofollow" href="https://www.lepidico.com/sustainability#community">communities</a> we work alongside.

"Another motive is to help deliver decarbonisation responsibly."

It’s also the way you do it

<h2>Climate Impact</h2><h3>Greenhouse gas emissions represent the sole reportable impact to the climate for Phase 1. Relative to the lithium industry, the emissions are modest - with opportunities to make the Project best-in-class.&nbsp;</h3> A report by leading industry consultant <a target="_self" rel="noopener noreferrer nofollow" href="https://www.ghd.com/en/index.aspx">GHD</a> concluded:<ul><li>Scope 1 and 2 emissions intensity from the Abu Dhabi chemical conversion plant is “low compared with other emission intensities reported or derived from lithium hydroxide production facilities.”&nbsp;</li><li>Upstream mining and mineral concentration in Namibia have an emissions intensity which is, “comparable with other similar lithium mine and concentrator projects.”</li></ul>This is how Lepidico’s methods compare to other established industry approaches:<img src="https://cdn.lepidico.com/production/Sustainability_climate_impact_b96182aa62.png" alt="Sustainability climate impact.png">Opportunities are being evaluated to not just reduce natural gas consumption but eliminate its use entirely. Installing a hydrogen-enabled or hydrogen-ready boiler will allow the decarbonisation of process heat during chemical processing, via the use of green hydrogen.&nbsp;<a target="_self" rel="noopener noreferrer nofollow" href="https://cdn.lepidico.com/production/LPD_Low_emissions_intensity_for_Phase_1_Chemical_Plant_1_e2b3ade605.pdf">Download ASX Announcement 'Low emissions intensity for Phase 1 Chemical Plant'</a>

Climate Impact

<h2>Water Management</h2><h3>The impact on water availability to the communities around Karibib is projected to be negligible. Ongoing monitoring will be instituted to test this. While the Abu Dhabi plant will consume more water, any future use of green hydrogen would produce water, thereby reducing consumption.</h3>Over the first four years, total water consumption for the integrated operations is estimated at 415,000 m3/yr.&nbsp;Less than 20% of this total, 80,000 m3, will initially be used at Karibib, where approximately 85% of the concentrator water requirement is recycled.Chemical conversion in Abu Dhabi is estimated to consume 315,000 m3/yr, net of recycling. Evaporative losses attributed to evaporators, crystallisers, dryers, cooling systems and residue streams are, with current technologies, unavoidably significant. Such water consumption is consistent within the industry for the manufacture of the suite of products from Phase 1.

Water Management

<h2>Land Use</h2><h3>Environmental land use impacts are predominantly limited to the mining site in Namibia.&nbsp;</h3>The site at Karibib was mined at various times during the 20th century and abandoned in the 1990s. As such, it represents a brownfield development with no permanent dwellings. Our closure plan will return the land to agricultural use and make material improvements to the environment as it currently stands.The Phase 1 chemical plant in UAE is situated on just 57,000 m2 and is located within a free zone within a designated large scale industrial park. Off-site infrastructure is supplied via a land lease with Abu Dhabi Ports.

Land Use

<h2>Waste Management</h2>Both tailings and waste from the Namibian operations have been assessed as environmentally benign. The tailings from the concentrator will be co-disposed with mine waste in a dedicated waste management facility. There is no requirement for lining the waste management areas and there is no dedicated tailings storage facility.

Waste Management

<h2>Biodiversity</h2>We have no reason to believe any of our activities will impact biodiversity.

Biodiversity

<h2>Health &amp; Safety</h2><h3>Lepidico is committed to the health, safety and wellness of its workforce and as at 30 September 2022 has achieved zero harm performance at its controlled sites since data collection began in September 2016.</h3>Lost Time Injury Frequency Rate (LTIFR), - and Total Recordable Incidents Frequency Rate (TRIFR) all continue to be zero.

Health & Safety

<h2>Community Engagement, Empowerment &amp; Investment</h2><h3>Lepidico conducted its first Socio-Economic Baseline Study in March 2020, focused on the communities in the broader Karibib district</h3>This revealed three broad categories of support in need of prioritisation:<ol><li>Projects/investments with high employment creation potential – to be aligned to the relatively abundant and diverse local labour force.</li><li>Well-equipped vocational centres for tailor-made training/skills enhancement, targeting unemployed youth and women.</li><li>Diversification and value addition initiatives for food security enhancement and poverty alleviation, targeting vulnerable groups and farmers.</li></ol>Based on several stakeholders’ meetings and the Socio-Economic Baseline assessments, five key objectives were developed where Lepidico can add the greatest value in its support of local communities:<ol><li>Reaching compliance: taking a systemic and strategic approach towards sustainability to do no harm and stop making tomorrow’s legacies today.</li><li>Improved local governance to effectively deliver basic services and development.</li><li>Infrastructure development and support to improve the lives of Karibib, Otjimbingwe and Okongava farm residents.</li><li>Local economic development for business and job creation with a focus on agriculture, youth and women’s projects.</li><li>Support to Education development. These objectives will be achieved through both shorter-term components of work, which started in 2021 and longer-term components that involve greater stakeholder participation and consultation in their scoping and implementation. Six projects were outlined in consultation with local stakeholders for action in 2022, with a budget of US$20,000.</li></ol>Fire and water trailers were acquired and equipped for the Karibib Operations, to service both the site and local farmer community, where there have been instances of scrub fires. This equipment was used to control the scrub fire that occurred in 2022 as advised above.In consultation with the Traditional Authority, Lepidico completed a micro-finance project to support disadvantaged women in the nearby town of Otjimbingwe. Chicken coups, livestock and animal husbandry and vegetable gardening training has been proviously.A business registration and entrepreneurship workshop for women and youth was also held in the town of Otjimbingwe. The workshop was attended by recipients of existing Lepidico micro-finance projects as well as 23 women and youths who showed keen interest in starting micro-businesses. Secondly, supporting information has been received from the Ministry of Health and Social Services for a new maternity space at the Otjimbingwe clinic to allow a funding proposal to be completed, with implementation planned for the 2023 fiscal year.The Company also continued to supply water under its abstraction licence to local farmers for their livestock.In the longer term, Karibib operations are expected to provide significant benefit to the communities in the region through both direct and indirect employment. Lepidico expects to recruit 115 full time employees, many of whom will come from local communities, where the population is estimated to be approximately 5,000.