The Core Lithium Ltd (ASX: CXO) share price is racing higher today following a grant from the Australian Federal government.
During afternoon trade, the lithium producer's shares are swapping hands for 26 cents, up 6.12%. In comparison, the All Ordinaries Index (ASX: XAO) is also travelling higher at 7,652 points, up 0.9%.
Core Lithium receives Modern Manufacturing Initiative Grant
Investors are snapping up Core Lithium shares after the company announced it has been successful in its application.
According to the update, Core Lithium received a $6 million Modern Manufacturing Initiative Grant from the Australian Federal government. The award was in recognition of the future commercial potential for Core Lithium to produce battery-grade lithium hydroxide (LiOH).
The company is developing its Finniss Lithium Project, located near Darwin in the Northern Territory. A Definitive Feasibility Study (DFS) is due to be completed shortly, followed by a Final Investment Decision (FID). Construction is expected to commence before the end of this year, with first production by late 2022.
Once online, the Finniss Lithium Project will be the first Australian lithium-producing mine outside of Western Australia.
The Australian government is focused on increasing the capabilities of onshore refinement of critical minerals. With this in mind, the funds will be used in building a pilot processing facility to produce LiOH at Darwin Harbour's Middle Arm Industrial Precinct.
Recently, Core Lithium accepted a 3-year Major Project Status (MPS) award which provides a number of benefits. This includes a single-entry point for Australian Government approvals, mapping critical approval pathways and processes, as well as monitoring approval milestones for projects, and addressing any issues.
What did management say?
Core Lithium managing director, Stephen Biggins commented:
We're thrilled to have received this $6 million grant and we thank the Federal Government and the Territory Government for their continued support of Core and our Finniss Project, which is firmly on track to become Australia's next lithium mine.
Core believes that it has a key role to play in meeting the future lithium supply gap, which is expected to grow at a rapid rate as the demand for electric vehicles and renewable energy ramps up over the next decade.
With this grant secured, we look forward to potentially realising the long-term value of developing a lithium hydroxide plant in the Northern Territory.
Core Lithium share price summary
It's been an impressive 12 months for Core Lithium shares, rising by more than 460%. Year-to-date performance has also presented strong gains, up 75% in 2021.
Core Lithium has a market capitalisation of roughly $299.4 million, with approximately 1.1 billion shares on its registry.
