Construction and fabrication labour shortages in China’s Jiangsu region have contributed to a revised commissioning schedule for Galaxy Resources’ Jiangsu Lithium Carbonate Project, which will be staged over the next five months.
The project’s EPCM contractor, Hatch Engineering, has provided Galaxy with a revised schedule and budget plan for Jiangsu, which indicates the project is 76% complete.
The new schedule indicates that the back half of the Jiangsu plant, which includes purification, drying, micronizing and bagging, will be completed with commissioning to begin during the current quarter. The front half of the plant, which includes calcination, sulphation, leaching and precipitation, is expected to be completed with commissioning to begin during the fourth quarter.
The schedule has been pressured by a significant tightening of the skilled labour market in the Jiangsu region, which has resulted in delays to construction and equipment delivery. Economic advancement in China’s western provinces this year has resulted in a sharp reduction in skilled labour returning to east coast projects like Jiangsu.
Labour shortages have also adversely impacted equipment and plant suppliers and their ability to deliver to the Jiangsu project on time. In addition to labour constraints, some late changes to the plant design from the local approval process, an increase in plant power capacity and alterations to equipment delivery timeframes added pressure to the Jiangsu schedule and budget.
The capital budget has been adjusted to Aus$99.8 million from the previous Aus$72.5 million, representing a 36% increase. Most of the increase relates to a rise in material requirements which have emerged as design details were finalized.
Galaxy’s managing director Iggy Tan says the previous estimation of material quantities and design changes was the result of the company's strategic decision to build the plant on an accelerated basis, paralleling both the design and construction process. In addition, the market demand for higher purity lithium persuaded the company to add a secondary purification circuit to the original design.
He says no further capital raising will be required to complete the construction and start up of Jiangsu as a contingency was incorporated in the previous Aus$120 million raising. “We are on a clear path to completion and Galaxy will continue to work hard to ensure the Jiangsu project is completed within the revised timeframe and budget.”