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Lithium Universe (ASX:LU7) has turned to Chinese suppliers with which it has strong relationships to procure equipment for its Becancour refinery in Canada.
The company is utilising a “same equipment, same supplier strategy” after its board visited Shanghai-based offices for Hatch Ltd. The company expects this strategy to ultimately speed up construction times towards commission and operation.
“Alternative suppliers closer to Canada will be used if suppliers don’t exist anymore,” the company added on Tuesday.
Lithium Universe chief Iggy Tan cited previous success at Jiangsu, which heavily relied on Chinese suppliers. That refers to the Jiangsu lithium carbonate project headed by Galaxy Resources.
“Building on the successes of past projects, such as Jiangsu where 60-70% of our suppliers were Chinese, we are confident in our ability to manage quality while optimizing efficiency,” Tan said.
“By fostering strong partnerships and implementing rigorous quality control measures, we are … [unlocking] significant advantages in the reduction in lead times, allowing us to execute tasks with greater speed and precision.”
Despite a reliance on China echoing into the Becancour project, the company will still utilise domestic labour in Canada.
“The company’s objective is to collaborate with local Canadian suppliers, providing training and facilitating knowledge transfer while utilising the Bécancour Refinery as a blueprint for replication elsewhere in North America,” the company added on Tuesday.
Lower lead times – and a reduced CAPEX burden – are being targeted by LU7 to get Becancour off the ground. By using the same supplier, the company also expects to reduce the burden of engineering work required for a DFS.
LU7 last traded at 1.7cps.
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