ALBEMARLE CORP (Form: 10-K/A, Received: 01/26/2023 16:55:03)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________

FORM 10-K/A

(Amendment No. 2)

________________________________________


☒			Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2021


☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission file number 001-12658

ALBEMARLE CORPORATION

(Exact name of registrant as specified in its charter)


Virginia						54-1692118
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

4250 Congress Street, Suite 900

Charlotte, North Carolina 28209

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (980) - 299-5700

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

COMMON STOCK, $.01 Par Value

ALB

New York Stock Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of the voting and non-voting common equity stock held by non-affiliates of the registrant was approximately $19.7 billion based on the last reported sale price of common stock on June 30, 2021, the last business day of the registrant’s most recently completed second quarter.

Number of shares of common stock outstanding as of February 11, 2022: 117,036,615

Documents Incorporated by Reference

Portions of Albemarle Corporation’s definitive Proxy Statement for its 2022 Annual Meeting of Shareholders filed with the U.S. Securities and Exchange Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, are incorporated by reference into Part III of this Annual Report on Form 10-K.

EXPLANATORY NOTE

On February 22, 2022, Albemarle Corporation (“Albemarle” or the “Company”) filed its Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”) with the Securities and Exchange Commission (the “Original Filing”). In addition, the Company filed Amendment No. 1 to the Original Filing (“Amendment No. 1”) on March 2, 2022 to amend the Aggregate Annual Production table within the Mineral Properties section of Part I, Item 2. Properties of the Original Filing.

This Amendment No. 2 to the Original Filing (“Amendment No. 2”) is being filed to: (i) amend certain disclosures within the Mineral Properties section of Part I, Item 2. Properties of the 2021 Form 10-K; (ii) revise the disclosure regarding our disclosure controls and procedures in Part II, Item 9A. Controls and Procedures of the 2021 Form 10-K to reflect management’s conclusion that the Company’s disclosure controls and procedures were not effective at December 31, 2021 solely as a result of the updated disclosures responding to Item 601(b)(96) and subpart 1300 of Regulation S-K included in this Amendment No. 2; and (iii) file amended versions the Company’s material individual mineral property technical report summaries as revised Exhibits 96.1, 96.2, 96.3, 96.4, 96.5 and 96.6 to this Amendment No. 2.

This Amendment No. 2 also updates, amends and supplements Part IV, Item 15. Exhibits and Financial Schedules of the 2021 Form 10-K to include, among other items, the filing of new certifications of the Company’s Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) as Exhibits 31.1 and 31.2, as well as third-party consents for the technical report summaries in Exhibits 23.1, 23.2, 23.3, 23.4, 23.5 and 23.6.

Except as described above, this Amendment No. 2 does not amend, update or change any other information set forth in the 2021 Form 10-K (including in the consolidated financial statements included therein) and does not reflect or purport to reflect any information or events occurring after the original filing date or modify or update those disclosures affected by subsequent events. Accordingly, this Amendment No. 2 should be read in conjunction with the Original Filing and Amendment No. 1 and the Company’s other filings with the Securities and Exchange Commission. This Amendment No. 2 consists solely of the preceding cover page, this explanatory note, Part I, Item 2. Properties, Part II, Item 9A. Controls and Procedures, Part IV, Item 15. Exhibits and Financial Schedules, a signature page and the exhibits filed herewith.

PART I


Item 2.			Properties.

We operate globally, with our principal executive offices located in Charlotte, North Carolina and regional shared services offices located in Budapest, Hungary and Dalian, China. Each of these properties are leased. We and our affiliates also operate regional sales and administrative offices in various locations throughout the world, which are generally leased.

We believe that our production facilities, research and development facilities, and sales and administrative offices are generally well maintained, effectively used and are adequate to operate our business. During 2021, the Company’s manufacturing plants operated at approximately 86% capacity, in the aggregate.

Set forth below is information regarding our production facilities operated by us and our affiliates. Additional details regarding our significant mineral properties can be found below the table.

Location

Principal Use

Owned/Leased

Lithium

Chengdu, China

Production of lithium carbonate and technical and battery-grade lithium hydroxide

Owned

Greenbushes, Australia(a)

Production of lithium spodumene minerals and lithium concentrate

Owned(e)

Kemerton, Australia(a)(b)

Production of lithium carbonate and technical and battery-grade lithium hydroxide

Owned(e)

Kings Mountain, NC

Production of technical and battery-grade lithium hydroxide, lithium salts and battery-grade lithium metal products

Owned

La Negra, Chile

Production of technical and battery-grade lithium carbonate and lithium chloride

Owned

Langelsheim, Germany

Production of butyllithium, lithium chloride, specialty products, lithium hydrides, cesium and special metals

Owned

New Johnsonville, TN

Production of butyllithium and specialty products

Owned

Salar de Atacama, Chile(a)

Production of lithium brine and potash

Owned(f)

Silver Peak, NV(a)

Production of lithium brine, technical-grade lithium carbonate and lithium hydroxide

Owned

Taichung, Taiwan

Production of butyllithium

Owned

Wodgina, Australia(a)(c)

Production of lithium spodumene minerals and lithium concentrate

Owned and leased(e)

Xinyu, China

Production of lithium carbonate and technical and battery-grade lithium hydroxide

Owned

Bromine

Baton Rouge, LA

Research and product development activities, and production of flame retardants

Leased

Magnolia, AR(a)

Production of flame retardants, bromine, inorganic bromides, agricultural intermediates and tertiary amines

Owned

Safi, Jordan(a)

Production of bromine and derivatives and flame retardants

Owned and leased(e)

Twinsburg, OH

Production of bromine-activated carbon

Leased

Catalysts

Amsterdam, the Netherlands

Production of refinery catalysts, research and product development activities

Owned

Bitterfeld, Germany

Refinery catalyst regeneration, rejuvenation, and sulfiding

Owned(e)

La Voulte, France

Refinery catalysts regeneration and treatment, research and development activities

Owned(e)

McAlester, OK

Refinery catalyst regeneration, rejuvenation, pre-reclaim burn off, as well as specialty zeolites and additives marketing activities

Owned(e)

Mobile, AL

Production of tin stabilizers

Owned(e)

Niihama, Japan

Production of refinery catalysts

Leased(e)

Pasadena, TX(d)

Production of aluminum alkyls, orthoalkylated anilines, refinery catalysts and other specialty chemicals; refinery catalysts regeneration services and research and development activities

Owned

Santa Cruz, Brazil

Production of catalysts, research and product development activities

Owned(e)

Takaishi City, Osaka, Japan

Production of aluminum alkyls

Owned(e)

(a) See below for further discussion of these significant mineral extraction facilities.

(b) Construction of Train I of the Kemerton, Australia facility was completed in the fourth quarter of 2021. Due to the ongoing labor shortages and COVID-19 pandemic travel restrictions in Western Australia, Train II construction is expected to be completed in the second half of 2022. Commercial sales volume from Train I will begin in 2022 and Train II in 2023.

(c) Since its acquisition in 2019, the Wodgina mine idled production of spodumene until the market demand supported bringing the mine back into production. MARBL recently announced its intention to resume spodumene concentrate production at this site, with the production restart expected during the second quarter of 2022.

(d) The Pasadena, Texas location includes three separate manufacturing plants which are owned, primarily utilized by Catalysts, including one plant that is owned by an unconsolidated joint venture.

(e) Owned or leased by joint venture.

(f) Ownership will revert to the Chilean government once we have sold all remaining amounts under our contract with the Chilean government pursuant to which we obtain lithium brine in Chile.

Mineral Properties

Set forth below are details regarding our mineral properties operated by us and our affiliates which have been prepared in accordance with the requirements of subpart 1300 of Regulation S-K, issued by the Securities and Exchange Commission (“SEC”). As used in this Annual Report on Form 10-K, the terms “mineral resource,” “measured mineral resource,” “indicated mineral resource,” “inferred mineral resource,” “mineral reserve,” “proven mineral reserve” and “probable mineral reserve” are defined and used in accordance with subpart 1300 of Regulation S-K. Under subpart 1300 of Regulation S-K, mineral resources may not be classified as “mineral reserves” unless the determination has been made by a qualified person (“QP”) that the mineral resources can be the basis of an economically viable project.

Except for that portion of mineral resources classified as mineral reserves, mineral resources do not have demonstrated economic value. Inferred mineral resources are estimates based on limited geological evidence and sampling and have a too high of a degree of uncertainty as to their existence to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. Estimates of inferred mineral resources may not be converted to a mineral reserve. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. A significant amount of exploration must be completed in order to determine whether an inferred mineral resource may be upgraded to a higher category. Therefore, it cannot be assumed that all or any part of an inferred mineral resource exists, that it can be the basis of an economically viable project, that it will ever be upgraded to a higher category, or that all or any part of the mineral resources will ever be converted into mineral reserves. See risk factor - “Our inability to acquire or develop additional reserves that are economically viable could have a material adverse effect on our future profitability,” in Item 1A. Risk Factors.

Overview

At December 31, 2021, we had the following mineral extraction facilities:

Location

Business Segment

Ownership %

Extraction Type

Stage

Australia

Greenbushes

Lithium

49%

Hard rock

Production

Wodgina

Lithium

60%(a)

Hard rock

Production(b)

Chile

Salar de Atacama

Lithium

100%

Brine

Production

Jordan

Safi(c)

Bromine

50%

Brine

Production

United States

Kings Mountain, NC

Lithium

100%

Hard rock

Development

Magnolia, AR(c)

Bromine

100%

Brine

Production

Silver Peak, NV(c)

Lithium

100%

Brine

Production

(a) Through our MARBL joint venture, we own 60% interest in the Wodgina Project.

(b) Following the Wodgina acquisition in 2019, the Wodgina mine idled production of spodumene until market demand supported bringing the mine back into production. In October 2021, our 60%-owned MARBL joint venture announced its intention to resume spodumene concentrate production at the Wodgina mine, with the production restart expected during the second quarter of 2022.

(c) Site includes on-site, or otherwise near-by exclusive, conversion facilities. See individual property disclosure below for further details.

Aggregate annual production from our mineral extraction facilities is shown in the below table. Amounts represent Albemarle’s attributable portion based on ownership percentages noted above and are shown in thousands of metric tonnes of lithium metal and bromine production. Lithium and bromine is extracted as brine or hard rock concentrate at the extraction facilities. These are then further converted into various compounds and products at on-site processing facilities or other conversion facilities owned by Albemarle around the world. In addition, the brine or concentrate can be used by tolling entities for further processing.


	Aggregate Annual Production (metric tonnes in thousands)
	Year Ended December 31,
	2021	2020	2019
Lithium
Australia(a)
Greenbushes(b)	13	8	11
Chile
Salar de Atacama(c)	8	8	7
United States
Silver Peak, NV	2	2	1
Bromine
Jordan
Safi(d)(e)	57	56	56
United States
Magnolia, AR(f)	71	74	73

(a) Wodgina had no production during the periods presented in the table.

(b) Production from Greenbushes represents 49% of production of the Greenbushes mine which is attributable to the Company’s interest in the Talison Lithium Australia Pty Ltd joint venture.

(c) The Salar de Atacama operation also produces potash (potassium chloride), bichofite, halite and sylvinite as byproducts. However, the Company does not consider production of these byproducts as material to the economics of the operation.

(d) Production from Safi represents the 50% production by the Jordan Bromine Project which is attributable to the Company’s interest in the Jordan Bromine Company Limited (“JBC”) joint venture.

(e) The Safi operation also produces potassium hydroxide (“KOH”) as a byproduct. However, the Company does not consider production of these byproducts as material to the economics of the operation.

(f) In addition, elemental sulfur and sodium hydrosulfide solution (“NaHS”) are manufactured from the sour gas produced by the Magnolia operation. However, the Company does not consider these products as material to the economics of the operation.

See individual property disclosure below for further details regarding mineral rights, titles, property size, permits and other information for our significant mineral extraction properties. The extracted brine or hard rock is processed at facilities on location (as described below) or processed, or further processed, at other facilities throughout the world.

The following table provides a summary of our mineral resources, exclusive of reserves, at December 31, 2021. The below mineral resource amounts are rounded and shown in thousands of metric tonnes. The amounts represent Albemarle’s attributable portion based on ownership percentages noted above. The relevant technical information supporting mineral resources for each material property is included in the "”Material Individual Properties” section below, as well as the in the technical report summaries filed as Exhibits 96.1 to 96.6 to this report.


	Measured Mineral Resources		Indicated Mineral Resources		Measured and Indicated Mineral Resources		Inferred Mineral Resources
	Amount (‘000s metric tonnes)	Grade (Li2O%)	Amount (‘000s metric tonnes)	Grade (Li2O%)	Amount (‘000s metric tonnes)	Grade (Li2O%)	Amount (‘000s metric tonnes)	Grade (Li2O%)
Lithium - Hard Rock:
Australia
Greenbushes	—	—	16,900	1.47%	16,900	1.47%	20,000	1.05%
Wodgina(a)	—	—	13,400	1.39%	13,400	1.39%	98,500	1.15%
United States
Kings Mountain, NC	—	—	46,816	1.37%	46,816	1.37%	42,869	1.10%
	Amount (‘000s metric tonnes)	Concentration (mg/L)	Amount (‘000s metric tonnes)	Concentration (mg/L)	Amount (‘000s metric tonnes)	Concentration (mg/L)	Amount (‘000s metric tonnes)	Concentration (mg/L)
Lithium - Brine:
Chile
Salar de Atacama	717	2,211	642	1,747	1,360	1,959	131	1,593
United States
Silver Peak, NV	10	152	25	143	35	145	63	121

(a) Through our MARBL joint venture, we own a 60% interest in the Wodgina project. We are therefore reporting 60% of Wodgina’s mineral resources.

The feedstock for the Safi, Jordan site, owned 50% by Albemarle through its JBC joint venture, is drawn from the Dead Sea, a nonconventional reservoir owned by the nations of Israel and Jordan. As such, there are no specific resources owned by JBC, but Albemarle’s joint venture partner, Arab Potash Company (“APC”) has exclusive rights granted by the Hashemite Kingdom of Jordan to withdraw brine from the Dead Sea and process it to extract minerals. The measured resource of bromide ion attributable to Albemarle’s 50% interest in its JBC joint venture is estimated to be approximately 177.5 million metric tonnes. JBC is extracting approximately 1 percent of the bromine available in Jordan’s share of the Dead Sea. Bromide concentration in the Dead Sea is estimated to average approximately 5,000 parts per million (“ppm”).

There are no mineral resource estimates at the Magnolia, AR bromine extraction site. All bromine mineral accumulations of economic interest and with reasonable prospects for eventual economic extraction within the Magnolia production lease area are either currently on production or subject to an economically viable future development plan and are classified as mineral reserves.

The following table provides a summary of our mineral reserves at December 31, 2021. The below mineral reserve amounts are rounded and shown in thousands of metric tonnes. The amounts represent Albemarle’s attributable portion based on ownership percentages noted above. The relevant technical information supporting mineral reserves for each material property is included in the "”Material Individual Properties” section below, as well as the in the technical report summaries filed as Exhibits 96.1 to 96.6 to this report.


	Proven Mineral Reserves		Probable Mineral Reserves		Total Mineral Reserves
	Amount (‘000s metric tonnes)	Grade (Li2O%)	Amount (‘000s metric tonnes)	Grade (Li2O%)	Amount (‘000s metric tonnes)	Grade (Li2O%)
Lithium - Hard Rock(a):
Australia
Greenbushes	—	—	69,900	1.95%	69,900	1.95%

	Amount (‘000s metric tonnes)	Concentration (mg/L)	Amount (‘000s metric tonnes)	Concentration (mg/L)	Amount (‘000s metric tonnes)	Concentration (mg/L)
Lithium - Brine:
Chile
Salar de Atacama	323	2,190	324	1,927	647	2,071
United States
Silver Peak, NV	13	88	49	83	62	84
Bromine:


United States
Magnolia, AR(b)	2,497		574		3,071

(a) The Wodgina mine is at an initial assessment level, and as a result, contains no mineral reserves. Mineral reserve estimates are not applicable for the Kings Mountain site.

(b) The concentration of bromine at the Magnolia site varies based on the physical location of the field and can range up to over 6,000 mg/L.

All bromine reserves reported by Albemarle for the JBC project are classified as proven mineral reserves. The mineral reserve estimate for the Safi, Jordan bromine site attributable to Albemarle’s 50% interest in its JBC joint venture is approximately 2.45 million metric tonnes of bromine from the Dead Sea. This estimate is based on the time available under the concession agreement with the Hashemite Kingdom of Jordan and the processing capability of the JBC plant. As only approximately one percent of the available resource is consumed from the Dead Sea, as noted above, the reserve estimate is based on the amount the JBC plant can produce over until the end of 2058, when the APC concession agreement ends. Bromine concentration used to calculate the reserve estimate from the Dead Sea was approximately 8,890 ppm based on historical pumping.

Mineral resource and reserve estimates were prepared by a QP with an effective date provided in the individual technical report summaries filed as Exhibits 96.1 to 96.6 to this report. Differences from those amounts in the technical report summaries represent depletion from the effective date of the report until December 31, 2021. Our mineral resource and reserve estimates are based on many factors, including the area and volume covered by our mining rights, assumptions regarding our extraction rates based upon an expectation of operating the mines on a long-term basis and the quality of in-place reserves.

Internal Controls

The modeling and analysis of our mineral resources and reserves was developed by our site personnel and reviewed by several levels of internal management, as well as the QP for each site. The development of such resources and reserves estimates, including related assumptions, were prepared by a QP.

When determining resources and reserves, as well as the differences between resources and reserves, management developed specific criteria, each of which must be met to qualify as a resource or reserve, respectively. These criteria, such as demonstration of economic viability, points of reference and grade, are specific and attainable. The QP and management agree on the reasonableness of the criteria for the purposes of estimating resources and reserves. Calculations using these criteria are reviewed and validated by the QP.

Estimations and assumptions were developed independently for each significant mineral location. All estimates require a combination of historical data and key assumptions and parameters. When possible, resources and data from public information and generally accepted industry sources, such as governmental resource agencies, were used to develop these estimations.

Each site has developed quality control and quality assurance (“QC/QA”) procedures, which were reviewed by the QP, to ensure the process for developing mineral resource and reserve estimates were sufficiently accurate. QC/QA procedures include

independent checks (duplicates) on samples by third party laboratories, blind blank/standard insertion into sample streams, duplicate sampling, among others. In addition, the QPs reviewed the consistency of historical production at each site as part of their analysis of the QC/QA procedures. See details of the controls for each site in the technical summary reports filed as Exhibits 96.1 to 96.6 to this report.

We recognize the risks inherent in mineral resource and reserve estimates, such as the geological complexity, the interpretation and extrapolation of field and well data, changes in operating approach, macroeconomic conditions and new data, among others. The capital, operating and economic analysis estimates rely on a range of assumptions and forecasts that are subject to change. In addition, certain estimates are based on mineral rights agreements with local and foreign governments. Any changes to these access rights could impact the estimates of mineral resources and reserves calculated in these reports. Overestimated resources and reserves resulting from these risks could have a material effect on future profitability.

Material Individual Properties

Greenbushes, Australia

The Greenbushes mine is a hard rock, open pit mine (latitude 33° 52´S, longitude 116° 04´ E) located approximately 250km south of Perth, Western Australia, 90km southeast of the port of Bunbury, a major bulk-handling port in the southwest of Western Australia. The lithium mining operation is near the Greenbushes townsite located in the Shire of Bridgetown-Greenbushes. Access to the Greenbushes Mine is via the paved South Western Highway between Bunbury and Bridgetown to Greenbushes Township and via the paved Maranup Ford Road to the Greenbushes Mine.

Lithium production from the Greenbushes Mine has been undertaken continuously for more than 20 years. Modern exploration has been undertaken on the property since the mid-1980s, first by Greenbushes Limited, then by Lithium Australia Ltd and in turn by Sons of Gwalia prior to the acquisition of Greenbushes by Talison in 2007. Initial exploration focused largely on tantalum, with the emphasis changing to lithium from around 2000. In 2014, Rockwood acquired a 49% ownership interest

in Windfield, which owns 100% of Talison, from Sichuan Tianqi Lithium Industries Inc. This 49% ownership in Windfield was assumed by Albemarle in 2015 as part of the acquisition of Rockwood. We purchase lithium concentrate from Windfield, and our investment in the joint venture is reported as an unconsolidated equity investment on our balance sheet.

About 55% of the tenements held by Talison are covered by Western Australia’s State Forest, which is under the authority of the Western Australia Department of Biodiversity, Conservation and Attractions. The majority of the remaining land is private land that covers about 40% of the surface rights. The remaining ground comprises crown land, road reserves and other miscellaneous reserves. The tenements cover a total area of approximately 10,000 hectares and include the historic Greenbushes tin, tantalum and current lithium mining areas. See section 3 of the Greenbushes technical report summary, filed as Exhibit 96.1 to this report, for a listing of tenements held by the Greenbushes site. Talison holds the mining rights for all lithium minerals on these tenements. The operating open pit lithium mining and processing plant area covers approximately 2,000 hectares comprising three mining leases. All lithium mining activities, including tailings storage, processing plant operations, open pits and waste rock dumps, are currently carried out within the boundaries of the three mining leases plus two general purpose leases. In order to keep the granted tenements in good standing, Talison is required to maintain permits, make an annual contribution to the statutory Mining Rehabilitation Fund and pay a royalty on concentrate sales for lithium mineral production as prescribed under the Mining Act 1978 in Western Australia. There are no private royalties that apply to the Greenbushes property. Talison reviews and renews all tenements on an annual basis.

The Greenbushes deposit consists of a main, rare-metal zoned pegmatite body, with numerous smaller footwall pegmatite dykes and pods. The primary intrusion and its subsidiary dykes and pods are concentrated within shear zones on the boundaries of granofels, ultramafic schists and amphibolites. The pegmatites are crosscut by ferrous-rich, mafic dolerite which is of paramount importance to the currant mining methods. The pegmatite body is over 3 km long (north by northwest), up to 300 meters wide (normal to dip), strikes north to northwest and dips moderately to steeply west to southwest.

The major minerals from the Greenbushes pegmatite are quartz, spodumene, albite and K-feldspar. The main lithium-bearing minerals are spodumene (containing approximately 8% lithium oxide) and varieties kunzite and hiddenite. Minor to trace lithium minerals include lepidolite mica, amblygonite and lithiophilite. Lithium is readily leached in the weathering environment and thus is virtually non-existent in weathered pegmatite. Exploration drilling at Greenbushes has been ongoing for over 40 years, including drilling in 2020, using reverse circulation and diamond drill holes.

Three lithium mineral processing plants are currently operating on the Greenbushes site, two chemical grade plants and a technical grade plant. Tailings are discharged to the tailings storage facility without the need for any neutralization process. Additional infrastructure on site includes power and water supply facilities, a laboratory, administrative offices, occupational health/safety/training offices, dedicated mines rescue area, stores, storage sheds, workshops and engineering offices. The Greenbushes site also leases production drills, excavators, trucks and various support equipment to extract the ore deposit by open pit methods. Talison’s power is delivered by a local distribution system and reticulated and metered within the site. Water is sourced from rainfall and stored in several process dams located on site. We consider the condition of all of our plants, facilities and equipment to be suitable and adequate for the businesses we conduct, and we maintain them regularly. As of December 31, 2021, our 49% ownership interest of the gross asset value of the facilities at the Greenbushes site was approximately $415.6 million.

Talison ships the chemical-grade lithium concentrate in vessels to our facilities in Meishan and Xinyu, China to process into battery-grade lithium hydroxide. In addition, the output from Talison can be used by tolling entities in China to produce both lithium carbonate and lithium hydroxide.

A summary of the Greenbushes facility’s lithium mineral resources and reserves as of December 31, 2021 are shown in the following tables. This is the first period estimated mineral resources, exclusive of reserves, and reserves have been developed for Greenbushes since being acquired by Albemarle. SRK Consulting (U.S.) Inc. (“SRK”), a third-party firm comprising mining experts in accordance with Item 1302(b)(1) of Regulation S-K, served as the QP and prepared the estimates of lithium mineral resources and reserves at the Greenbushes facility, with an effective date of June 30, 2021. A copy of the QP’s amended technical report summary with respect to the lithium mineral resource and reserve estimates at the Greenbushes facility, dated December 16, 2022 is filed as Exhibit 96.1 to this report. The amounts represent Albemarle’s attributable portion based on a 49% ownership percentage, and are presented as metric tonnes of lithium ore in thousands.


	Amount	Grade (Li2O%)
Indicated mineral resources:
Resource Pit	15,600	1.54%
Reserve Pit	1,300	0.64%
Inferred mineral resources:
Resource Pit	11,700	1.05%
Reserve Pit	8,200	1.05%
Stockpiles	100	1.40%

•Mineral resources are reported exclusive of mineral reserves. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

•Resources have been reported as in situ (hard rock within optimized pit shell) and stockpile (mined and stored on surface as blasted/crushed material).

•Resources have been categorized subject to the opinion of a QP based on the amount/robustness of informing data for the estimate, consistency of geological/grade distribution, survey information, and have been validated against long term mine reconciliation for the in-situ volumes.

•Resources which are contained within the mineral reserve pit design may be excluded from reserves due to an Inferred classification or because they sit in the incremental cutoff grade range between the resource and reserve cutoff grade. They are disclosed separately from the resources contained within the Resource Pit. There is reasonable expectation that some Inferred resources within the mineral reserve pit design may be converted to higher confidence materials with additional drilling and exploration effort.

•All Measured and Indicated Stockpile resources have been converted to mineral reserves.

•Mineral resources are reported considering a nominal set of assumptions for reporting purposes:

◦Mass Yields (“MY”) for chemical grade material are based on Greenbushes chemical grade plant 1 (“CGP1”) life-of-mine (“LoM”) feed MY formula. For the LoM material, MY is assumed at 29.49% and is subject to a 97% recovery limitation when the lithium oxide grade exceeds 5.5%. Mass yield varies as a function of grade, and may be reported herein at lower mass yields than the CGP1 average.

◦Pit optimization and economics for derivation of cutoff grade include mine gate pricing of $672/metric tonne of 6% Li2O concentrate, $4.75/metric tonne mining cost (LoM average cost-variable by depth), $17.87/metric tonne processing cost, $4.91/metric tonne G&A cost, and $2.66/metric tonne sustaining capital cost.

◦Costs estimated in Australian Dollars (“AUD”) were converted to US Dollars based on an exchange rate of AUD 0.76:$1.00.

◦These economics define a cutoff grade of 0.573% Li2O.

◦An overall 43% pit slope angle, 0% mining dilution, and 100% mining recovery.

◦Resources were reported above this 0.573% Li2O cutoff grade and are constrained by an optimized break-even pit shell.

◦No infrastructure movement capital costs have been added to the optimization.

◦Resources are reported with a cutoff grade between 0.5% and 0.7% Li2O.

◦Stockpile resources have been previously mined between nominal cutoff grades of 0.5 to 0.7% Li2O.

•Mineral resources tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding.


	Amount	Grade (Li2O%)
Probable mineral reserves:
Reserve Pit	67,650	1.97%
Stockpiles	2,250	1.31%

•Mineral reserves are reported exclusive of mineral resources.

•Indicated in situ resources have been converted to Probable reserves.

•Measured and Indicated stockpile resources have been converted to Probable mineral reserves.

•Mineral reserves are reported considering a nominal set of assumptions for reporting purposes:

◦Mineral reserves are based on a mine gate price of $577/metric tonne of chemical grade concentrate (6% Li2O).

◦Mineral reserves assume 80% mining recovery for ore/waste contact areas and 100% for non-waste contact material.

◦Mineral reserves are diluted at approximately 20% at zero grade for ore/waste contact areas in addition to internal dilution built into the resource model (2.7% with the assumed selective mining unit of 5 m x 5 m x 5 m).

◦The MY for reserves processed through the chemical grade plants is estimated by the based on Greenbushes’ MY formula and the LoM mass yield is 29.49% subject to a 97% recovery limitation when the lithium oxide grade exceeds 5.5%.

◦The MY for reserves processed through the chemical grade plant chemical grade plant 2 (“CGP2”) in the next three to four years is estimated by the based on Greenbushes’ MY formula for a LoM mass yield of 16.77%, and is subject to a 97% recovery limitation when the lithium oxide grade exceeds 5.5%. The CGP2 plant is going through a ramp up period where lower recoveries are expected until all equipment has been optimized and additional capital is spent.

◦The MY for reserves processed through the technical grade plant is estimated by the based on Greenbushes’ MY formula and the LoM mass yield is 46.18%. There is approximately 3.5 million metric tonnes of technical grade plant feed at 4% Li2O

◦Although Greenbushes produces a technical grade product from the current operation, it is assumed that the reserves reported herein will be sold as a chemical grade product. This assumption is necessary because feed for the technical grade plant is currently only defined at the grade control or blasting level. Therefore, it is conservatively assumed that concentrate produced by the technical grade plant will be sold at the chemical grade product price

◦Pit optimization and economics for derivation of cutoff grade include mine gate pricing of $577/metric tonne of 6% Li2O concentrate, $4.75/metric tonne mining cost (LoM average cost-variable by depth), $17.87/metric tonne processing cost, $4.91/metric tonne G&A cost, and $2.66/metric tonne sustaining capital cost. The mine gate price is based on 650/metric tonne-concentrate cost-insurance-freight (“CIF”) less $73/metric tonne-concentrate for government royalty and transportation to China.

◦Costs estimated in AUD were converted to US Dollars based on an exchange rate of AUD 0.76:$1.00.

◦The price, cost and mass yield parameters, along with the internal constraints of the current operations, result in a mineral reserves cutoff grade of 0.7% Li2O.

◦The cutoff grade of 0.7% Li2O was applied to reserves that are constrained by the ultimate pit design and are detailed in a yearly mine schedule.

◦Stockpile reserves have been previously mined and are reported at a 0.7% Li2O cutoff grade.

•Waste tonnage within the reserve pit is 459 metric tonnes at a strip ratio of 3.32:1 (waste to ore – not including reserve stockpiles).

•Mineral reserve tonnage, grade and mass yield have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding.

The LoM sustaining capital cost of $2.66/metric tonne of ore was used only for the purposes of pit optimization and cut-off grade calculation. This sustaining capital cost was based on estimates of LoM annual sustaining capital costs for Greenbushes that was included in the 2021 budget. Subsequent to pit optimization, design and scheduling, a detailed estimate of LoM sustaining capital costs was prepared.

Key assumptions and parameters relating to the lithium mineral resources and reserves at the Greenbushes facility are discussed in sections 11 and 12, respectively, of the Greenbushes technical report summary.

Wodgina, Australia

The Wodgina property, which includes a hard rock, open pit mine (latitude -21° 11' 25"S, longitude 118° 40' 25"E) is located approximately 110 km south-southeast of Port Hedland, Western Australia between the Turner and Yule Rivers. The area includes multiple prominent greenstone ridges up to 180 m above mean sea level surrounded by granitic plains and lowlands. The property is accessible via National Highway 1 to National highway 95 to the Wodgina camp road. All roads to site are paved. The nearest large regional airport is in Port Hedland which also hosts an international deep-water port facility. In addition, a site dedicated all-weather airstrip is located near to site, capable of landing certain aircrafts.

The Wodgina pegmatite deposits were discovered in 1902. Since then, the pegmatite-hosted deposits have been mined for tin, tantalum, beryl, and lithium by various companies. Mining occurred sporadically until Goldrim Mining formed a new partnership with Pan West Tantalum Pty Ltd., who opened open pit mining at the site in 1989 and progressively expanded during the 1990s. Active mining at the Mt. Cassiterite pit has been started and stopped regularly between 2008 and the present. The mine was placed on care and maintenance in 2008, 2012, and most recently in 2019. In 2016, MRL acquired the mine and upgraded the processing facilities and site infrastructure to 750ktpa spodumene plant producing 6% spodumene concentrate, completed in 2019. On October 31, 2019, we completed the acquisition of a 60% interest in this hard rock lithium mine project and formed an unincorporated joint venture with MRL, named MARBL. We formed MARBL for the exploration, development, mining, processing and production of lithium and other minerals (other than iron ore and tantalum) from the Wodgina Project. Following the acquisition, MARBL’s production of spodumene was idled until market demand supported bringing the mine back into production. In October 2021, our 60%-owned MARBL joint venture announced its intention to resume spodumene concentrate production at the Wodgina mine, with the production restart expected during the second quarter of 2022.

Wodgina holds mining tenements within the Karriyarra native title claim and are subject to the Land Use Agreement dated March 2001 between the Karriyarra People and Gwalia Tantalum Ltd (now Wodgina Lithium, a 100% subsidiary of MRL, our MARBL joint venture partner). See section 3 of the Wodgina technical report summary, filed as Exhibit 96.2 to this report, for a listing of all mining and exploration land tenements, which are in good standing and no known impediments exist. Certain

tenements are due for renewal in 2026 and another in 2030. Drilling and exploration activities have been conducted throughout the mining life of the Wodgina property.

The Wodgina mine is a pegmatite lithium deposit with spodumene the dominant mineral. The lithium mineralization occurs as 10 - 30 cm long grey-white spodumene crystals within medium grained pegmatites comprising primarily of quartz, feldspar, spodumene, and muscovite. Typically, the spodumene crystals are oriented orthogonal to the pegmatite contacts.

The facilities at Wodgina consist of a three stage crushing plant, the spodumene concentration plant, administrative offices, an accommodation camp, a power station, gas pipeline, three mature and reliable water bore fields, extension for future tailing storage and a fleet of owned and leased mine production equipment. The gas pipeline feeds the site power station to provide the power to the facilities. Water is obtained from the dedicated water bore fields. We consider the condition of all of our plants, facilities and equipment to be suitable and adequate for the businesses we conduct, and we maintain them regularly. As of December 31, 2021, our 60% ownership interest of the gross asset value of the facilities at our Wodgina site was approximately $192.2 million.

A summary of the Wodgina facility’s lithium mineral resources as of December 31, 2021 are shown in the following tables. This is the first period estimated mineral resources have been developed for Wodgina since being acquired by Albemarle. SRK served as the QP and prepared the estimates of lithium mineral resources and reserves at the Wodgina facility, with an effective date of September 30, 2020. A copy of the QP’s amended technical report summary with respect to the lithium mineral resource estimates at the Wodgina facility, dated December 16, 2022, is filed as Exhibit 96.2 to this report. Mineral resources for Wodgina represent 60% interest in the Wodgina Project. which is attributable to the Company’s interest in the MARBL joint venture. Amounts are presented as metric tonnes of lithium ore in thousands.


	Amount	Grade (Li2O%)

Indicated mineral resources	13,400	1.39%
Measured and Indicated mineral resources	13,400	1.39%
Inferred mineral resources	98,500	1.15%

• All significant figures are rounded to reflect the relative accuracy of the estimates.

• The Mineral Resource estimate has been classified in accordance with SEC S-K 1300 guidelines and definitions.

• The Cassiterite Deposit comprises the historically mined Mt. Cassiterite pit and undeveloped North Hill areas.

• Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. Inferred Mineral Resources have a high degree of uncertainty as to their economic and technical feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resources can be upgraded to Measured or Indicated Mineral Resources.

• Metallurgical recovery of lithium has been estimated on a block basis at a consistent 65% based on documentation from historic plant production.

• To demonstrate reasonable prospects for eventual economic extraction of Mineral Resources, a cut-off grade of 0.5% Li2O based on metal recoverability assumptions, long-term lithium price assumptions of $584/metric tonne, variable mining costs averaging $3.40/metric tonne, processing costs and G&A costs totaling $23/metric tonne.

• There are no known legal, political, environmental, or other risks that could materially affect the potential development of the Mineral Resources based on the level of study completed for this property.

The Wodgina mine is at an initial assessment level, and as a result, contains no mineral reserves. Key assumptions and parameters relating to the lithium mineral resources at the Wodgina facility are discussed in section 11 of the Wodgina technical report summary.

Salar de Atacama/La Negra, Chile

The Salar de Atacama is located in the commune of San Pedro de Atacama, with the operations approximately 100 kilometers to the south of this commune, in the extreme east of the Antofagasta Region and close to the border with the republics of Argentina and Bolivia. Access to the property is on the major four-lane paved Panamericana Route 5 north from Antofagasta, Chile approximately 60 km northeast to B-385. On B-385, a two-lane paved highway, the Albemarle Salar de Atacama project (latitude 23°38'31.52"S, longitude 68°19'30.31"W) is approximately 175 km to the east. The site has a small private airport that serves the project. A small paved runway airport is also located near San Pedro de Atacama and a large international airport is located in Antofagasta. The La Negra plant (latitude 23°45'20.31"S, longitude 70°18'36.92"W) has direct access roads and located approximately 20 km by paved four lane highway Route 28 southeast of Antofagasta turning north approximately 3 km on Route 5.

In the early 1960s, water with high concentrations of salts was discovered in the Salar de Atacama Basin. In January 1975, one of our predecessors, Foote Mineral Company, signed a long-term contract with the Chilean government for mineral rights with respect to the Salar de Atacama consisting exclusively of the right to access lithium brine, covering an area of approximately 16,700 hectares. See section 3 of the Salar de Atacama technical report summary, filed as Exhibit 96.3 to this report, for a listing of mining concessions at the Salar de Atacama site. The contract originally permitted the production and sale of up to 200,000 metric tons of lithium metal equivalent (“LME”), a calculated percentage of LCE. In 1981, the first construction of evaporation ponds in the Salar de Atacama began. The following year, the construction of the lithium carbonate plant in La Negra began. In 1990, the facilities at the Salar de Atacama were expanded with a new well system and the capacity of the lithium carbonate plant in the La Negra plant was expanded. In 1998, the lithium chloride plant in La Negra began operating, the same year that Chemetall purchased Foote Mineral Company. Subsequently, in 2004, Chemetall was acquired by Rockwood, and in 2015, Rockwood was acquired by Albemarle. Effective January 1, 2017, the Chilean government and Albemarle entered into an annex to the original agreement through which its duration was modified, extending it until the balance of: (a) the original 200,000 metric tons of LME and an additional 262,132 metric tons of LME granted through this annex have been exploited, processed, and sold, or (b) on January 1, 2044, whichever comes first. In addition, the amended agreement provides for commission payments to the Chilean government based on sales price/metric ton on the amounts sold under the additional quota granted, our support of research and development in Chile of lithium applications and solar energy,

and our support of local communities in Northern Chile. Albemarle currently operates its extraction and production facilities in Chile under this mineral rights agreement with the Chilean government.

The Salar de Atacama is a salt flat, the largest in Chile, located in the Atacama desert in northern Chile, which is the driest place on the planet and thus has an extremely high annual rate of evaporation and extremely low annual rainfall. Our extraction through evaporation process works as follows: snow in the Andes Mountains melts and flows into underground pools of water containing brine, which generally have high concentrations of lithium. We then pump the water containing brine above ground through a series of pumps and wells into a network of large evaporation ponds. Over the course of approximately eighteen months, the desert sun evaporates the water causing other salts to precipitate and leaving behind concentrated lithium brine. If weather conditions are not favorable, the evaporation process may be prolonged. After we obtain the lithium brine from the Salar de Atacama, we process it into lithium carbonate and lithium chloride at our manufacturing facilities in nearby La Negra, Chile.

The filling materials of the Salar de Atacama Basin are dominated by the Vilama Formation and the more recently, in geologic time, by evaporitic and clastic materials that are currently being deposited in the basin. These units house the basin's aquifer system and are composed of evaporitic chemical sediments that include carbonate, gypsum and halite intervals interrupted by volcanic deposits of large sheets of ignimbrite, volcanic ash and smaller classical deposits. Lithium-rich brines are extracted from the halite aquifer that is located within the nucleus of the salt flat. The Salar de Atacama basin contains a continental system of lithium-rich brine. These types of systems have six common (global) characteristics: arid climate; closed basin that contains a salt flat (salt crust), a salt lake, or both; igneous and/or hydrothermal activity; tectonic subsidence; suitable sources of lithium; and sufficient time to concentrate the lithium in the brine.

In the Salar de Atacama basin, lithium-rich brines are found in a halite aquifer. Carbonate and sulfates are found near the edges of the basin. The average, minimum and maximum concentrations of lithium in the Salar de Atacama basin are approximately 1,400, 900 and 7,000 mg/L, respectively. From 2017 through 2019, two drilling campaigns were carried out in order to obtain geological and hydrogeological information at the Albemarle mining concession.

The facilities at the Salar de Atacama consist of extraction wells, evaporation and concentration ponds, leaching plants, a potash plant, a drying plant, services and general areas, including salt stockpiles, as well as a fleet of owned and leased equipment. In addition, the site includes administrative offices, an operations building and a laboratory. The extracted concentrated lithium brine is sent to the La Negra plant by truck for processing. The Salar de Atacama has its own powerhouse that generates the energy necessary for the entire operation of the facilities. We also have permanent and continuous groundwater exploitation rights for two wells that are for industrial use and to supply the Salar de Atacama facilities. The La Negra facilities consist of a boron removal plant, a calcium and magnesium removal plant, two lithium carbonate conversion plants, a lithium chloride plant, evaporation-sedimentation ponds, an offsite area where the raw materials are housed and the inputs that are used in the process are prepared, a dry area where the various products are prepared, as well as a fleet of owned and leased equipment. La Negra is supplied electricity from a local company and has rights to a well in the Peine community for its water supply. We are currently constructing a third lithium carbonate conversion plant expected to be completed mid-2021, followed by a six-month commissioning and qualification process. We consider the condition of all of our plants, facilities and equipment to be suitable and adequate for the businesses we conduct, and we maintain them regularly. As of December 31, 2021, the combined gross asset value of our facilities at the Salar de Atacama and in La Negra, Chile (not inclusive of construction in process) was approximately $941.9 million.

A summary of the Salar de Atacama facility’s lithium mineral resources and reserves as of December 31, 2021 are shown in the following tables. This is the first period estimated mineral resources (exclusive of reserves) and reserves have been developed for Salar de Atacama. SRK served as the QP and prepared the estimates of lithium mineral resources and reserves at the Salar de Atacama facility, with an effective date of August 31, 2022. A copy of the QP’s amended technical report summary with respect to the lithium mineral resource and reserve estimates at the Salar de Atacama facility, dated December 16, 2022, is filed as Exhibit 96.3 to this report. Differences from the amounts in the technical report summary represent depletion since the effective date of the technical report summary until December 31, 2021. The amounts represent Albemarle’s attributable portion based on a 100% ownership percentage, and are presented as metric tonnes of lithium metal in thousands.


	Amount	Concentration (mg/L)
Measured mineral resources	717	2,211
Indicated mineral resources	642	1,747
Measured and Indicated mineral resources	1,360	1,959
Inferred mineral resources	131	1,593

•Mineral resources are reported exclusive of mineral reserves. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

•Given the dynamic reserve versus the static resource, a direct measurement of resources post-reserve extraction is not practical. Therefore, as a simplification, to calculate mineral resources, exclusive of reserves, the quantity of lithium pumped in the life of mine plan was subtracted from the overall resource without modification to lithium concentration. Measured and indicated resource were deducted proportionate to their contribution to the overall mineral resource.

•Resources are reported on an in-situ basis.

•Resources are reported between the elevations of 2,299 meters above mean sea level (“mamsl”) and 2,200 masl. Resources are reported as lithium metal.

•Resources have been categorized subject to the opinion of a QP based on the amount/robustness of informing data for the estimate, consistency of geological/grade distribution, survey information.

•Resources have been calculated using drainable porosity estimated from measured values in Upper Halite and volcanic, gypsum and clastic units, and bibliographical values based on the lithology and QP’s experience in similar deposits.

•The estimated economic cutoff grade utilized for resource reporting purposes is 670 mg/l lithium, based on the following assumptions:

◦A technical grade lithium carbonate price of $11,000/metric tonne CIF La Negra. This is a 10% premium to the price utilized for reserve reporting purposes. The 10% premium applied to the resource versus the reserve was selected to generate a resource larger than the reserve, ensuring the resource fully encompassed the reserve while still maintaining reasonable prospect for eventual economic extraction.

◦Recovery factors for the salar operation increase gradually over the span of four years, from the current 40% to the proposed Salar Yield Improvement Program (“SYIP”) 65% recovery in 2025. After that point, evaporation pond recovery is assumed constant at 65%, considering the installation of a liming plant is assumed in 2027. An additional recovery factor of 80% lithium recovery is applied to the La Negra lithium carbonate plant.

◦A fixed average annual brine pumping rate of 442 L/s is assumed, consistent with Albemarle’s permit conditions.

◦Operating cost estimates are based on a combination of fixed brine extraction, G&A and plant costs and variable costs associated with raw brine pumping rate or lithium production rate. Average life of mine operating cost is calculated at approximately $3,000/metric tonne CIF Asia.

◦Sustaining capital costs are included in the cutoff grade calculation and post the SYIP installation, average around $54 million per year.

◦Government royalties are excluded from the cutoff grade calculation as these costs are variable, depending upon price. A 3.5% community royalty is included in the cutoff grade as this royalty is fixed.

•Mineral Resources tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding.


	Amount	Concentration (mg/L)
Proven mineral reserves:
In Situ	299	2,150
In Process	24	2,685
Probable mineral reserves:
In Situ	324	1,927
Total mineral reserves:
In Situ	623	2,047
In Process	24	2,685

•In process reserves quantify the prior 24 months of pumping data and reflect the raw brine, at the time of pumping. These reserves represent the first 24 months of feed to the lithium process plant in the economic model.

•Proven reserves have been estimated as the lithium mass pumped during Years 2020 through 2030 of the proposed LoM plan.

•Probable reserves have been estimated as the lithium mass pumped from 2030 until the end of the proposed LoM plan (2041).

•Reserves are reported as lithium metal

•This mineral reserve estimate was derived based on a production pumping plan truncated in March 2042 (i.e., approximately 21 years). This plan was truncated to reflect the projected depletion of Albemarle’s authorized lithium production quota.

•The estimated economic cutoff grade for the Project is 783 mg/L lithium, based on the assumptions discussed below. The truncated production pumping plan remained well above the economic cutoff grade (i.e., the economic cutoff grade did not result in a limiting factor to the estimation of the reserve).

◦A technical grade lithium carbonate price of $10,000/metric tonne CIF Asia.

◦Recovery factors for the salar operation increase gradually over the span of 4 years, from the current 40% to the proposed SYIP 65% recovery in 2025. After that point, evaporation pond recovery is assumed constant at 65%, considering the installation of a liming plant is assumed in 2027. An additional recovery factor of 80% lithium recovery is applied to the La Negra lithium carbonate plant.

◦A fixed average annual brine pumping rate of 442 L/s is assumed, consistent with Albemarle’s permit conditions.

◦Sustaining capital costs are included in the cutoff grade calculation and post the SYIP installation, average around $54M per year.

•Mineral reserve tonnage, grade and mass yield have been rounded to reflect the accuracy of the estimate and numbers may not add due to rounding.

Key assumptions and parameters relating to the lithium mineral resources and reserves at the Salar de Atacama facility are discussed in sections 11 and 12, respectively, of the Salar de Atacama technical report summary.

Silver Peak, Nevada

The Silver Peak site (latitude 37.751773°N, longitude 117.639027°W) is located in a rural area approximately 30 miles southwest of Tonopah, in Esmeralda County, Nevada. It is located in the Clayton Valley, an arid valley historically covered with dry lake beds (playas). The operation borders the small unincorporated town of Silver Peak, Nevada. Albemarle uses the Silver Peak site for the production of lithium brines, which are used to make lithium carbonate and, to a lesser degree, lithium hydroxide. Access to the site is off of the paved highway SR-265 in the town of Silver Peak, Nevada. The administrative offices are located on the south side of the road. The process facility is on the north side of the road and the brine operations are located approximately three miles east of Silver Peak on Silver Peak Road and occupy both the north and south sides of the road. In addition, access to the site is also possible via gravel/dirt roads from Tonopah, Nevada and Goldfield, Nevada.

Lithium brine extraction in the Clayton Valley began in the mid-1960’s by one of our predecessors, the Foote Mineral Company. Since that time, lithium brine operations have been operated on a continuous basis. In 1998, Chemetall purchased Foote Mineral Company. Subsequently, in 2004, Chemetall was acquired by Rockwood, and in 2015, Rockwood was acquired by Albemarle. Our mineral rights in Silver Peak consist of our right to access lithium brine pursuant to our permitted and certified senior water rights, a settlement agreement with the U.S. government, originally entered into in June 1991, and our patented and unpatented land claims. Pursuant to the 1991 agreement, our water rights and our land claims, we have rights to all

lithium that we can remove economically from the Clayton Valley Basin in Nevada. See section 3 of the Silver Peak technical report summary, filed as Exhibit 96.4 to this report, for a listing of patented and unpatented claims at the Silver Peak site. We have been operating at the Silver Peak site since 1966. Our Silver Peak site covers a surface of over 13,500 acres, more than 10,500 acres of which we own through a subsidiary. The remaining acres are owned by the U.S. government from whom we lease the land pursuant to unpatented land claims that are renewed annually. Actual surface disturbance associated with the operations is 7,390 acres, primarily associated with the evaporation ponds. The manufacturing and administrative activities are confined to an area approximately 20 acres in size.

We extract lithium brine from our Silver Peak site through substantially the same evaporation process we use at the Salar de Atacama. We process the lithium brine extracted from our Silver Peak site into lithium carbonate at our plant in Silver Peak. It is hypothesized that the current levels of lithium dissolved in brine originate from relatively recent dissolution of halite by meteoric waters that have penetrated the playa in the last 10,000 years. The halite formed in the playa during the aforementioned climatic periods of low precipitation and that the concentrated lithium was incorporated as liquid inclusions into the halite crystals. There are no current exploration activities on the Silver Peak lithium operation. However, in January 2021, we announced that we will expand capacity in Silver Peak and begin a program to evaluate clays and other available Nevada resources for commercial production of lithium. Beginning in 2021, we plan to invest $30 million to $50 million to double the current production in Silver Peak by 2025, with the aim of making full use of the brine water rights.

The facilities at Silver Peak consist of extraction wells, evaporation and concentration ponds, a lithium carbonate plant, a lithium anhydrous plant, a lithium hydroxide plant, a liming plant, wellfield and mill maintenance, a shipping and packaging facility and administrative offices, as well as a fleet of owned and leased equipment. Silver Peak is supplied electricity from a local company and we currently have two operating fresh water wells nearby that supply water to the facilities. We consider the condition of all of our plants, facilities and equipment to be suitable and adequate for the businesses we conduct, and we maintain them regularly. As of December 31, 2021, the gross asset value of our facilities at our Silver Peak site was approximately $60.8 million.

A summary of the Silver Peak facility’s lithium mineral resources and reserves as of December 31, 2021 are shown in the following tables. This is the first period estimated mineral resources and reserves have been developed for Silver Peak. SRK served as the QP and prepared the estimates of lithium mineral resources (exclusive of reserves) and reserves at the Silver Peak facility, with an effective date of June 30, 2021. A copy of the QP’s amended technical report summary with respect to the lithium mineral resource and reserve estimates at the Silver Peak facility, dated December 16, 2022, is filed as Exhibit 96.4 to this report. Differences from the amounts in the technical report summary represent depletion since the effective date of the technical report summary until December 31, 2021. The amounts represent Albemarle’s attributable portion based on a 100% ownership percentage, and are presented as metric tonnes of lithium metal in thousands.


	Amount	Concentration (mg/L)
Measured mineral resources	10	152
Indicated mineral resources	25	143
Measured and Indicated mineral resources	35	145
Inferred mineral resources	63	121

•Mineral resources are reported exclusive of mineral reserves. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

•Given the dynamic reserve versus the static resource, a direct measurement of resources post-reserve extraction is not practical. Therefore, as a simplification, to calculate mineral resources, exclusive of reserves, the quantity of lithium pumped in the LoM plan was subtracted from the overall resource without modification to lithium concentration. Measured and indicated resource were deducted proportionate to their contribution to the overall mineral resource.

•Resources are reported on an in situ basis.

•Resources are reported as lithium metal.

•Resources have been categorized subject to the opinion of a QP based on the amount/robustness of informing data for the estimate, consistency of geological/grade distribution, survey information.

•Resources have been calculated using drainable porosity estimated from bibliographical values based on the lithology and QP’s experience in similar deposits.

•The estimated economic cutoff grade utilized for resource reporting purposes is 50 mg/L lithium, based on the following assumptions:

◦A technical grade lithium carbonate price of $11,000/metric tonne CIF North Carolina. This is a 10% premium to the price utilized for reserve reporting purposes. The 10% premium applied to the resource versus the reserve was selected to generate a resource larger than the reserve, ensuring the resource fully encompassed the reserve while still maintaining reasonable prospect for eventual economic extraction.

◦Recovery factors for the wellfield are = -206.23*(Li wellfield feed)2 +7.1903*(wellfield Li feed)+0.4609. An additional recovery factor of 85% lithium recovery is applied to the lithium carbonate plant.

◦A fixed brine pumping rate of 20,000 acre feet per year (“afpy”), ramped up from current levels over a period of five years.

◦Operating cost estimates are based on a combination of fixed brine extraction, G&A and plant costs and variable costs associated with raw brine pumping rate or lithium production rate. Average life of mine operating costs is calculated at approximately $4,900/metric tonne lithium carbonate CIF North Carolina.

◦Sustaining capital costs are included in the cutoff grade calculation and include a fixed component at $2.5 million per year and an additional component tied to the estimated number of wells replaced per year.

•Mineral resources tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding.


	Amount	Concentration (mg/L)
Proven mineral reserves:
In Situ	11	87
In Process	1	103
Probable mineral reserves:
In Situ	49	83
Total mineral reserves:
In Situ	60	84
In Process	1	103

•Proven reserves have been estimated as the lithium mass pumped during Years 2021 through 2026 of the proposed LoM plan.

•Probable reserves have been estimated as the lithium mass pumped from 2026 until the end of the proposed LoM plan (2050).

•Reserves are reported as lithium metal.

•This mineral reserve estimate was derived based on a production pumping plan truncated at the end of year 2050 (i.e., approximately 29.5 years). This plan was truncated to reflect the QP’s opinion on uncertainty associated with the production plan as a direct conversion of measured and indicated resource to proven and probable reserve is not possible in the same way as a typical hard-rock mining project.

•The estimated economic cutoff grade for the Silver Peak project is 56 mg/L lithium, based on the assumptions discussed below. The production pumping plan was truncated due to technical uncertainty inherent in long-term production modelling and remained well above the economic cutoff grade (i.e., the economic cutoff grade did not result in a limiting factor to the estimation of the reserve).

◦A technical grade lithium carbonate price of $10,000/metric tonne CIF North Carolina.

◦A fixed brine pumping rate of 20,000 afpy, ramped up from current levels over a period of five years.

◦Operating cost estimates are based on a combination of fixed brine extraction, G&A and plant costs and variable costs associated with raw brine pumping rate or lithium production rate. Average life of mine operating costs is calculated at approximately $5,100/metric tonne lithium carbonate CIF North Carolina.

•Mineral reserve tonnage, grade and mass yield have been rounded to reflect the accuracy of the estimate (thousand tonnes), and numbers may not add due to rounding.

Key assumptions and parameters relating to the lithium mineral resources and reserves at the Silver Peak facility are discussed in sections 11 and 12, respectively, of the Silver Peak technical report summary.

Safi, Jordan

Our 50% interest in JBC, a consolidated joint venture established in 1999, with operations in Safi, Jordan, acquires bromine that is originally sourced from the Dead Sea. JBC processes the bromine at its facilities into a variety of end products. The JBC operation (latitude 31°8'34.85"N , longitude 35°31'34.68"E) is located in Safi, Jordan, and is located on a 26-ha area on the southeastern edge of the Dead Sea, about 6 kilometers north of the of the APC plant. JBC also has a 2-hectare storage facility within the free-zone industrial area at the Port of Aqaba. The Jordan Valley Highway/Route 65 is the primary method of access for supplies and personnel to JBC. The Port of Aqaba is the main entry point for supplies and equipment for JBC, where imported shipping containers are offloaded from ships and are transported by truck to JBC via the Jordan Valley Highway. Aqaba is approximately 205 km south of JBC via Highway 65. Major international airports can be readily accessed either at Amman or Aqaba. Jordan’s railway transport runs north-south through Jordan and is not used to transport JBC employees and product.

In 1958, the Government of the Hashemite Kingdom of Jordan granted APC a concession for exclusive rights to exploit the minerals and salts from the Dead Sea brine until 2058; at that time, APC factories and installations would become the property of the Government. APC was granted its exclusive mineral rights under the Concession Ratification Law No. 16 of 1958. APC produces potash from the brine extracted from the Dead Sea. A concentrated bromide-enriched brine extracted from APC’s evaporation ponds is the feed material for the JBC plant. Following the formation of the joint venture, the JBC bromine plant began operations in 2002. Expansion of the facilities to double its bromine production capacity went into operation in 2017.

The climate, geology and location provide a setting that makes the Dead Sea a valuable large-scale natural resource for potash and bromine. Today, the Dead Sea has a surface area of 583 km2 and a brine volume of 110 km3. The Dead Sea is the world’s saltiest natural lake, containing high concentrations of ions compared to that of regular sea water and an unusually high amount of magnesium and bromine. There is an estimated 900 million tonnes of bromine in the Dead Sea.

Mining methods consist of all activities necessary to extract brine from the Dead Sea and extract Bromine. The low rainfall, low humidity and high temperatures in the Dead Sea area provide ideal conditions for recovering potash from the brine by solar evaporation. JBC obtains its feedbrine from APC’s evaporation pond and this supply is intimately linked to the APC operation. As evaporation takes place the specific gravity of the brine increases until its constituent salts progressively crystallize and precipitate out of solution, starting with sodium chloride (common salt) precipitating out to the bottom of the ponds (pre-carnallite ponds). Brine is transferred to other pans in succession where its specific gravity increases further, ultimately precipitating out of the sodium chloride. Carnallite precipitation takes place at the evaporation pond where it is harvested from the brine and pumped as slurry to a process plant (where the potassium chloride is separated from the magnesium chloride). JBC extracts the bromide-rich, “carnallite-free” brine through a pumping station. This brine feeds the bromine and magnesium plants. There is no exploration as typically conducted for the characterization of a mineral deposit.

Infrastructure and facilities to support the operation of the bromine production plant at the Safi site is compact and contained in an approximately 33 ha area. JBC ships product in bulk through a storage terminal in Aqaba. There are above ground storage tanks as well as pumps and piping for loading these products onto ships. JBC main activities at Aqaba are raw material/product storing, importing, and exporting. An evaporation pond collects the waste streams from pipe flushing, housekeeping, and other activities. Fresh water is sources from the Mujib Reservoir, a man-made reservoir. JBC is supplied electricity from the National Electric Power Company of Jordan. We consider the condition of all of our plants, facilities and equipment to be suitable and adequate for the businesses we conduct, and we maintain them regularly. As of December 31, 2021, our 50% ownership interest of the gross asset value of the facilities at the Safi, Jordan site was approximately $210.6 million.

A summary of the Safi facility’s bromine mineral resources and reserves as of December 31, 2021 are provided below. This is the first period estimated mineral resources and reserves have been developed for Safi. RPS Energy Canada Ltd (“RPS”), a third-party firm comprising mining experts in accordance with Item 1302(b)(1) of Regulation S-K, served as the QP and prepared the estimates of bromine mineral resources and reserves at the Safi facility, with an effective date of December 31, 2021. A copy of the QP’s amended technical report summary with respect to the bromine mineral resource and reserve estimates at the Safi facility, dated December 16, 2022, is filed as Exhibit 96.5 to this report.

The feedstock is drawn from the Dead Sea, a nonconventional reservoir owned by the nations of Israel and Jordan. As such, there are no specific resources owned by JBC, but Albemarle’s joint venture partner, APC, has exclusive rights granted by the Hashemite Kingdom of Jordan to withdraw brine from the Dead Sea and process it to extract minerals. Revenues are based on a forecast bromine price ranging from $4,565 to $8,300 per metric tonne and the operating cost ranges between $355 and $532 per metric tonne. The measured resource of bromide ion attributable to Albemarle’s 50% interest in its JBC joint venture is estimated to be approximately 177.5 million metric tonnes. JBC is extracting approximately 1 percent of the bromine available in Jordan’s share of the Dead Sea. Bromide concentration in the Dead Sea is estimated to average approximately 5,000 ppm. The cut-off grade of the Albemarle bromine operations has been estimated to be at 1,000 ppm. The bromide ion concentration in the brine extracted which feeds the bromine plants, significantly exceeds the selected cut-off grade.

All bromine reserves reported by Albemarle for the JBC project are classified as proven mineral reserves. The mineral reserve estimate attributable to Albemarle’s 50% interest in its JBC joint venture is approximately 2.45 million metric tonnes of bromine from the Dead Sea. This estimate is based on the time available under the concession agreement with the Hashemite Kingdom of Jordan and the processing capability of the JBC plant. As only approximately one percent of the available resource is consumed from the Dead Sea, as noted above, the reserve estimate is based on the amount the JBC plant can produce over until the end of 2058, when the APC concession agreement ends. Revenues are based on a forecast bromine price ranging from $4,565 to $8,300 per metric tonne and the operating cost ranges between $355 and $532 per metric tonne. At the plant process recovery of 83.4 percent (bromine from bromide), product bromine is estimated at approximately 122,100 tonnes per year. Bromine concentration used to calculate the reserve estimate from the Dead Sea was approximately 8,890 ppm based on historical pumping. The cut-off grade of the Albemarle bromine operations has been estimated to be at 1,000 ppm. The bromide ion concentration in the brine extracted which feeds the bromine plants, significantly exceeds the selected cut-off grade.

Key assumptions and parameters relating to the bromine mineral resources and reserves at the Safi facility are discussed in sections 11 and 12, respectively, of the Safi technical report summary.

Magnolia, Arkansas

Magnolia is located in the southwest Arkansas, north of the center of Columbia County, approximately 50 miles east of Texarkana and 135 miles south of Little Rock. Our facilities include two separate production plants, the South Plant and the West Plant. The South Plant (latitude 33.1775°N, longitude 93.2161°W) is accessible via U.S. Route 79 and paved local roads. The West Plant (latitude 33.2648°N, longitude 93.3151°W) is accessible by U.S. Route 371 and paved local roads. The decentralized well sites around the brine fields are accessed via paved Arkansas Highway 19, 98, 160 and 344.

In Magnolia, bromine is recovered from underground brine wells and then processed into a variety of end products at the plant on location. Albemarle has more than 50 brine production and injection wells that are currently active on the property. Albemarle’s area of bromine operation is comprised of over 9,500 individual leases with local landowners comprising a total area of over 99,500 acres. The leases have been acquired over time as field development extended across the field. Each lease continues for a period of 25 years or longer until after a two year period where brine is not injected or produced from/to a well within two miles of lease land areas, as long as lease rentals are continuing to be paid. See section 3 of the Magnolia technical report summary, filed as Exhibit 96.6 to this report, for a map of leases and burdens on those leases at the Magonlia site.

Bromine extraction began in Magnolia in 1965 as the first brine supply well was drilled, and additional wells were put into production over the next few years. In 1987, a predecessor company took over operations of certain brine supply and injection wells, which Albemarle continues to operate to this day. In 2019, Albemarle completed, and put into production, two new brine production supply wells in Magnolia.

In Magnolia, bromine exists as sodium bromide in the formation waters or brine of the Jurassic age Smackover Formation, a geological formation in Arkansas, in the subsurface at 7,000 to 8,500 feet below sea level. The mineralization occurs within the highly saline Smackover Formation waters or brine where the bromide has an abnormally rich composition. The bromine concentration is more than twice as high as that found in normal evaporated sea water. The bromine mineralization of the brine is distributed throughout the porous intervals of the upper and middle Smackover on the property. The strong permeability and porosity of the Smackover grainstones provide excellent continuity of the bromine mineralization within the brine.

The facilities at Magnolia consist of brine production and injection wells, brine ponds, two bromine processing plants, pipelines between the plants and wells, a laboratory, storage and warehouses, administrative offices, as well as a fleet of owned and leased equipment. Our Magnolia facilities are supplied electricity from a local company and we currently have several operating freshwater wells nearby that supply water to the facilities. In addition, both plants have dedicated rail spurs that provide access to several rail lines to transport product throughout the country. We consider the condition of all of our plants, facilities and equipment to be suitable and adequate for the businesses we conduct, and we maintain them regularly. As of December 31, 2021, the gross asset value of our facilities at our Magnolia site was approximately $772.8 million.

A summary of the Magnolia facility’s bromine mineral reserves as of December 31, 2021 are shown in the following table. This is the first period estimated mineral reserves have been developed for Magnolia. RPS served as the QP and prepared the estimates of bromine mineral reserves at the Magnolia facility, with an effective date of December 31, 2021. A copy of the QP’s amended technical report summary with respect to the bromine mineral resource and reserve estimates at the Magnolia facility, dated December 16, 2022, is filed as Exhibit 96.6 to this report. The amounts represent Albemarle’s attributable portion based on a 100% ownership percentage, and are presented as metric tonnes in thousands.


			Amount
Proven mineral reserves			2,497
Probable mineral reserves			574
Total mineral reserves			3,071

•Reserves are reported as bromine, on an in situ basis.

•The estimated economic cutoff grade utilized for reserve reporting purposes is 1,000 mg/L bromine, with a bromine price ranging from $4,565 to $8,300 per metric tonne and operating costs ranging from $850 to $1,150 per metric tonne.

•Recovery factors for the Magnolia are 74% and 81% for the proven mineral reserves and total mineral reserves, respectively.

•The concentration of bromine at the Magnolia site varies based on the physical location of the field and can range up to over 6,000 mg/L.

Key assumptions and parameters relating to the bromine mineral reserves at the Magnolia facility are discussed in section 12 of the Magnolia technical report summary.


Item 9A.			Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act), as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded in the Original Filing that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

In connection with the preparation and filing of this Amendment No. 2, our principal executive officer and principal financial officer re-evaluated the effectiveness of the design and operation of our disclosure controls and procedures, taking into account the updated disclosures in the “Properties” section of, and the SEC Technical Report Summary exhibits filed with, this Amendment No. 2 responding to Item 601(b)(96) and subpart 1300 of Regulation S-K (the "Mining Disclosures"). Based on this re-evaluation and solely as a result of the updated Mining Disclosures included in this Amendment No. 2, our principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures.

Because the Company has determined that it is not reasonably possible that the revision of the above-mentioned disclosures could result in a material misstatement of the financial statements, the Company has determined that its internal control over financial reporting was effective as of December 31, 2021 as set forth in the Original Filing.

Management’s report on internal control over financial reporting and the independent registered public accounting firm’s report are included in Item 8 under the captions entitled “Management’s Report on Internal Control over Financial Reporting” and “Report of Independent Registered Public Accounting Firm” and are incorporated herein by reference.

Changes in Internal Control over Financial Reporting

No changes in our internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f)) occurred during the fiscal quarter ended December 31, 2021 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART IV


Item 15.			Exhibits and Financial Statement Schedules.

(a)(1) The following consolidated financial and informational statements of the registrant are included in Part II Item 8 of the Company’s Annual Report on Form 10-K filed on February 22, 2022:

Management’s Report on Internal Control Over Financial Reporting

Report of Independent Registered Public Accounting Firm (PricewaterhouseCoopers LLP, Charlotte, North Carolina, PCAOB ID 238)

Consolidated Balance Sheets as of December 31, 2021 and 2020

Consolidated Statements of Income, Comprehensive Income, Changes in Equity and Cash Flows for the years ended December 31, 2021, 2020 and 2019

Notes to the Consolidated Financial Statements

(a)(2) No Financial Statement Schedules are provided in accordance with Item 15(a)(2) as the information is either not applicable, not required or has been furnished in the Consolidated Financial Statements or Notes thereto.


(a)(3)						Exhibits

						The following documents are filed as exhibits to this Annual Report on Form 10-K/A (Amendment No.2) pursuant to Item 601 of Regulation S-K. These exhibits should be read in conjunction with Item 15 of the Company’s Annual Report on Form 10-K filed on February 22, 2022:

*23.1						Consent of SRK Consulting (U.S), Inc. regarding the Greenbushes property.

*23.2						Consent of SRK Consulting (U.S), Inc. regarding the Wodgina property.

*23.3						Consent of SRK Consulting (U.S), Inc. regarding the Salar de Atacama property.

*23.4						Consent of SRK Consulting (U.S), Inc. regarding the Silver Peak property.

*23.5						Consent of RPS Energy Canada Ltd regarding bromine reserves and resources.

*23.6						Consent of RESPEC regarding bromine reserves and resources.

*31.1						Certification of Chief Executive Officer pursuant to Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended.

*31.2						Certification of Chief Financial Officer pursuant to Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended.

*96.1						SEC Technical Report Summary, Pre-Feasibility Study, Greenbushes Mine, Western Australia, prepared by SRK Consulting (U.S), Inc., dated December 16, 2022.

*96.2						SEC Technical Report Summary, Initial Assessment, Wodgina, Western Australia, prepared by SRK Consulting (U.S), Inc., dated December 16, 2022.

*96.3						SEC Technical Report Summary, Pre-Feasibility Study, Salar de Atacama Region II, Chile, prepared by SRK Consulting (U.S), Inc., dated December 16, 2022.

*96.4						SEC Technical Report Summary Pre-Feasibility Study, Silver Peak Lithium Operation, Nevada, USA, prepared by SRK Consulting (U.S), Inc., dated December 16, 2022.


*96.5						SEC Technical Report Summary for Jordan Bromine Operation, prepared by RPS Energy Canada Ltd and RESPEC Consulting Inc., dated January 26, 2023.

*96.6						SEC Technical Report Summary for Magnolia Field Bromine Reserves, prepared by RPS Energy Canada Ltd, dated January 26, 2023.

*101						Interactive Data Files (Annual Report on Form 10-K, for the fiscal year ended December 31, 2021, furnished in XBRL (eXtensible Business Reporting Language)).


*			Included with this filing.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



ALBEMARLE CORPORATION (Registrant)

By:						/S/ J. KENT MASTERS
						(J. Kent Masters)
						Chairman, President and Chief Executive Officer

Dated: January 26, 2023

Exhibit 23.1

January 26, 2023

CONSENT OF QUALIFIED PERSON

SRK Consulting (U.S.), Inc. (“SRK”), in connection with Albemarle Corporation’s Annual Report on Form 10-K for the year ended December 31, 2021 (as amended, the “Form 10-K”), consents to:

•the public filing by the Company and use of the technical report titled “Technical Report Summary Pre-Feasibility Study Greenbushes Mine Western Australia” (the “Technical Report Summary”), with an effective date of June 30, 2021 and dated January 28, 2022, as amended December 16, 2022, that was prepared in accordance with Subpart 1300 of Regulation S-K promulgated by the U.S. Securities and Exchange Commission, as an exhibit to this Amendment No. 2 to the Form 10-K and referenced therein;

•the incorporation by reference of the Technical Report Summary into the Company’s Registration Statements on Form S-8 (Nos. 333-150694, 333-166828, 333-188599 and 333-223167) (collectively, the “Registration Statements”);

•the use of and references to our name, including our status as an expert or “qualified person” (as defined in Subpart 1300 of Regulation S-K promulgated by the U.S. Securities and Exchange Commission), in connection with the Form 10-K, the Registration Statements and the Technical Report Summary; and

•any extracts from or a summary of the Technical Report Summary in the Form 10-K and incorporated by reference in the Registration Statements and the use of any information derived, summarized, quoted, or referenced from the Technical Report Summary, or portions thereof, that was prepared by us, that we supervised the preparation of, and/or that was reviewed and approved by us, that is included or incorporated by reference in the Form 10-K and the Registration Statements.

SRK is responsible for authoring, and this consent pertains to, the Technical Report Summary. SRK certifies that it has read the Form 10-K and that it fairly and accurately represents the information in the Technical Report Summary for which it is responsible.

SRK further confirms that this consent has not been withdrawn.

Neither the whole nor any part of this report nor any reference thereto may be included in any other document without the prior written consent of SRK as to the form and context in which it appears.

/s/ SRK Consulting (U.S.), Inc.

SRK Consulting (U.S.), Inc.

Exhibit 23.2

January 26, 2023

CONSENT OF QUALIFIED PERSON

SRK Consulting (U.S.), Inc. (“SRK”), in connection with Albemarle Corporation’s Annual Report on Form 10-K for the year ended December 31, 2021 (as amended, the “Form 10-K”), consents to:

•the public filing by the Company and use of the technical report titled “SEC Technical Report Summary Initial Assessment Wodgina Western Australia” (the “Technical Report Summary”), with an effective date of September 30, 2020 and dated December 31, 2021, as amended December 16, 2022, that was prepared in accordance with Subpart 1300 of Regulation S-K promulgated by the U.S. Securities and Exchange Commission, as an exhibit to this Amendment No. 2 to the Form 10-K and referenced therein;

SRK further confirms that this consent has not been withdrawn.

Neither the whole nor any part of this report nor any reference thereto may be included in any other document without the prior written consent of SRK as to the form and context in which it appears.

/s/ SRK Consulting (U.S.), Inc.

SRK Consulting (U.S.), Inc.

Exhibit 23.3

January 26, 2023

CONSENT OF QUALIFIED PERSON

SRK Consulting (U.S.), Inc. (“SRK”), in connection with Albemarle Corporation’s Annual Report on Form 10-K for the year ended December 31, 2021 (as amended, the “Form 10-K”), consents to:

•the public filing by the Company and use of the technical report titled “SEC Technical Report Summary Pre-Feasibility Study Salar de Atacama Region II, Chile” (the “Technical Report Summary”), with an effective date of August 31, 2021 and dated January 28, 2022, as amended December 16, 2022, that was prepared in accordance with Subpart 1300 of Regulation S-K promulgated by the U.S. Securities and Exchange Commission, as an exhibit to this Amendment No. 2 to the Form 10-K and referenced therein;

SRK further confirms that this consent has not been withdrawn.

Neither the whole nor any part of this report nor any reference thereto may be included in any other document without the prior written consent of SRK as to the form and context in which it appears.

/s/ SRK Consulting (U.S.), Inc.

SRK Consulting (U.S.), Inc.

Exhibit 23.4

January 26, 2023

CONSENT OF QUALIFIED PERSON

SRK Consulting (U.S.), Inc. (“SRK”), in connection with Albemarle Corporation’s Annual Report on Form 10-K for the year ended December 31, 2021 (as amended, the “Form 10-K”), consents to:

•the public filing by the Company and use of the technical report titled “SEC Technical Report Summary Pre-Feasibility Study Silver Peak Lithium Operation Nevada, USA” (the “Technical Report Summary”), with an effective date of June 30, 2021 and dated September 30, 2021, as amended December 16, 2022, that was prepared in accordance with Subpart 1300 of Regulation S-K promulgated by the U.S. Securities and Exchange Commission, as an exhibit to this Amendment No. 2 to the Form 10-K and referenced therein;

SRK further confirms that this consent has not been withdrawn.

Neither the whole nor any part of this report nor any reference thereto may be included in any other document without the prior written consent of SRK as to the form and context in which it appears.

/s/ SRK Consulting (U.S.), Inc.

SRK Consulting (U.S.), Inc.

Exhibit 23.5

January 26, 2023

CONSENT OF QUALIFIED PERSON

RPS Energy Canada Ltd. (“RPS”), in connection with Albemarle Corporation’s Annual Report on Form 10-K for the year ended December 31, 2021 (as amended, the “Form 10-K”), consents to:

•the public filing by the Company and use of the Technical Report Summaries prepared by RPS on certain bromine reserves and resources controlled by Albemarle Corporation (the “Technical Report Summaries”), with an effective date of December 31, 2021 and dated January 26, 2023, that was prepared in accordance with Subpart 1300 of Regulation S-K promulgated by the U.S. Securities and Exchange Commission, as an exhibit to this Amendment No. 2 to the Form 10-K and referenced therein;

•the incorporation by reference of the Technical Report Summaries into the Company’s Registration Statements on Form S-8 (Nos. 333-150694, 333-166828, 333-188599 and 333-223167) (collectively, the “Registration Statements”);

•any extracts from or a summary of the Technical Report Summaries in the Form 10-K and incorporated by reference in the Registration Statements and the use of any information derived, summarized, quoted, or referenced from the Technical Report Summaries, or portions thereof, that was prepared by us, that we supervised the preparation of, and/or that was reviewed and approved by us, that is included or incorporated by reference in the Form 10-K and the Registration Statements.

RPS is responsible for authoring, and this consent pertains to, the Technical Report Summaries. RPS certifies that it has read the Form 10-K and that it fairly and accurately represents the information in the Technical Report Summaries for which it is responsible.

RPS Energy Canada Ltd.

/s/ Michael Gallup

Name: Michael Gallup

Title: Technical Director - Engineering

Exhibit 23.6

January 26, 2023

CONSENT OF QUALIFIED PERSON

RESPEC, in connection with Albemarle Corporation’s Annual Report on Form 10-K for the year ended December 31, 2021 (as amended, the “Form 10-K”), consents to:

•the public filing by the Company and use of the Technical Report Summaries prepared by RESPEC on certain bromine reserves and resources controlled by Albemarle Corporation (the “Technical Report Summaries”), with an effective date of December 31, 2021 and dated January 26, 2023, that was prepared in accordance with Subpart 1300 of Regulation S-K promulgated by the U.S. Securities and Exchange Commission, as an exhibit to this Amendment No. 2 to the Form 10-K and referenced therein;

RESPEC is responsible for authoring, and this consent pertains to, the Technical Report Summaries. RESPEC certifies that it has read the Form 10-K and that it fairly and accurately represents the information in the Technical Report Summaries for which it is responsible.

RESPEC Company, LLC

By: /s/ Edmundo J. Laporte

Name: Edmundo J. Laporte

Title: Director of International Business/Principal Consultant

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, J. Kent Masters, certify that:

1.I have reviewed this Annual Report on Form 10-K/A of Albemarle Corporation for the period ended December 31, 2021;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date:			January 26, 2023


/s/ J. KENT MASTERS
J. Kent Masters
Chairman, President and Chief Executive Officer

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Scott A. Tozier, certify that:

1.I have reviewed this Annual Report on Form 10-K/A of Albemarle Corporation for the period ended December 31, 2021;

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date:			January 26, 2023


/s/ SCOTT A. TOZIER
Scott A. Tozier
Executive Vice President and Chief Financial Officer

Exhibit 96.1


SEC Technical Report Summary Pre-Feasibility Study Greenbushes Mine Western Australia Effective Date: June 30, 2021 Report Date: January 28, 2021 Amended Date: December 16, 2022
Report Prepared for Albemarle Corporation 4350 Congress Street Suite 700 Charlotte, North Carolina 28209
Report Prepared by SRK Consulting (U.S.), Inc. 1125 Seventeenth Street, Suite 600 Denver, CO 80202 SRK Project Number: 515800.040

SRK Consulting (U.S.), Inc.


SEC Technical Report Summary – Greenbushes Mine			Page ii

Table of Contents


1 Executive Summary			1
1.1 Property Description (Including Mineral Rights) and Ownership			1
1.2 Geology and Mineralization			1
1.3 Status of Exploration, Development and Operations			2
1.4 Mineral Resource and Mineral Reserve Estimates			2
1.4.1 Mineral Resources			2
1.4.2 Mineral Reserve Estimate			3
1.5 Mining Operations			4
1.6 Mineral Processing and Metallurgical Testing			5
1.7 Processing and Recovery Methods			6
1.8 Infrastructure			8
1.9 Environmental Studies, Permitting, and Plans, Negotiations, or Agreements with Local Individuals or Groups			8
1.10 Summary Capital and Operating Cost Estimates			11
1.11 Economics			13
1.12 Conclusions and Recommendations			14
1.12.1 Property Description and Ownership			14
1.12.2 Geology and Mineralization			14
1.12.3 Status of Exploration, Development and Operations			14
1.12.4 Mineral Resource			15
1.12.5 Reserves and Mining Methods			15
1.12.6 Processing and Recovery Methods			15
1.12.7 Infrastructure			16
1.12.8 Environmental Studies, Permitting, and Plans, Negotiations, or Agreements with Local Individuals or Groups			16
1.12.9 Summary Capital and Operating Cost Estimates			17
1.12.10 Economics			17
2 Introduction			18
2.1 Terms of Reference and Purpose of the Report			18
2.2 Sources of Information			19
2.3 Details of Inspection			19
2.4 Report Version Update			20
2.5 Qualified Person			20
3 Property Description			21
3.1 Property Location			21
3.2 Property Area			24
3.3 Mineral Title			25
3.4 Encumbrances			27
3.5 Royalties or Similar Interest			27


Greenbushes_SEC_Report_515800.040			December 2022

SRK Consulting (U.S.), Inc.


SEC Technical Report Summary – Greenbushes Mine			Page iii


3.6 Other Significant Factors and Risks			27
4 Accessibility, Climate, Local Resources, Infrastructure and Physiography			28
4.1 Topography, Elevation and Vegetation			28
4.2 Means of Access			28
4.3 Climate and Length of Operating Season			28
4.4 Infrastructure Availability and Sources			28
4.4.1 Water			28
4.4.2 Electricity			29
4.4.3 Personnel			29
4.4.4 Supplies			29
5 History			30
5.1 Previous Operations			30
5.1.1 Tin			30
5.1.2 Tantalum			30
5.1.3 Lithium Minerals			30
5.2 Exploration and Development of Previous Owners or Operators			31
6 Geological Setting, Mineralization, and Deposit			32
6.1 Regional Geology			32
6.2 Local Geology			34
6.2.1 Structure			36
6.2.2 Mineralogy			36
7 Exploration			41
7.1 Exploration Work (Other Than Drilling)			41
7.1.1 Significant Results and Interpretation			41
7.2 Exploration Drilling			41
7.2.1 Drilling Surveys			42
7.2.2 Sampling Methods and Sample Quality			42
7.2.3 Diamond Drilling Sampling			43
7.2.4 RC Drilling Sampling			43
7.2.5 Drilling Type and Extent			44
7.2.6 Drilling, Sampling, or Recovery Factors			45
7.2.7 Drilling Results and Interpretation			48
7.3 Hydrogeology			48
7.4 Geotechnical Data, Testing and Analysis			49
8 Sample Preparation, Analysis and Security			52
8.1 Sample Preparation Methods and Quality Control Measures			52
8.2 Sample Preparation, Assaying and Analytical Procedures			53
8.3 Quality Control Procedures/Quality Assurance			54
8.4 Assay QA/QC			55
8.5 QA/QC - Recent Drilling			55


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8.6 Opinion on Adequacy			61
9 Data Verification			62
9.1 Data Verification Procedures			62
9.2 Limitations			63
9.3 Opinion on Data Adequacy			64
10 Mineral Processing and Metallurgical Testing			65
10.1 Metallurgical Testwork and Analysis			65
11 Mineral Resource Estimates			66
11.1 Key Assumptions, Parameters, and Methods Used			66
11.2 Geological Model			66
11.2.1 Exploratory Data Analysis			76
11.2.2 Outliers and Compositing			81
11.2.3 Continuity Analysis			86
11.3 Mineral Resources Estimates			92
11.3.1 Quanitative Kriging Neighborhood Analysis (QKNA)			92
11.3.2 Variable Orientation Modeling			95
11.3.3 Block Model			96
11.3.4 Grade Interpolation			98
11.3.5 Validation			100
11.3.6 Depletion			103
11.3.7 Bulk Density			104
11.3.8 Reconciliation			105
11.3.9 Resource Classification and Criteria			106
11.4 Cut-Off Grades Estimates			107
11.5 Reasonable Potential for Eventual Economic Extraction (RPEEE)			108
11.6 Uncertainty			109
11.7 Summary Mineral Resources			110
11.7.1 Mineral Resource Sensitivity			112
11.8 Opinion on Influence for Economic Extraction			114
12 Mineral Reserve Estimates			115
12.1 Key Assumptions, Parameters, and Methods Used			115
12.1.1 Resource Model and Selective Mining Unit			115
12.1.2 Pit Optimization			115
12.1.3 Ultimate Pit and Phase Design			117
12.2 Modifying Factors			123
12.2.1 Mining Dilution and Mining Recovery			123
12.2.2 Processing Recovery			123
12.2.3 Cut-Off Grade Estimate			124
12.2.4 Material Risks Associated with the Modifying Factors			125
12.3 Summary Mineral Reserves			126


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13 Mining Methods			128
13.1.1 Current Mining Methods			128
13.2 Parameters Relevant to Mine Designs and Plans			129
13.2.1 Geotechnical			129
13.2.2 Hydrological			132
13.3 Mine Design			133
13.3.1 Pit Design			133
13.4 Mining Dilution and Mining Recovery			137
13.5 Production Schedule			138
13.6 Waste Dump Design			144
14 Processing and Recovery Methods			145
14.1 Technical Grade Plant (TGP)			145
14.1.1 Grinding and Classification Circuit			149
14.1.2 Coarse Processing Circuit			149
14.1.3 Fines Processing Circuit			149
14.1.4 Control Philosophy			149
14.2 Chemical Grade Plant-1 Crushing and Processing Plants			150
14.2.1 Crushing Circuit (CR1)			150
14.2.2 Chemical Grade Plant-1 (CGP1)			151
14.3 Chemical Grade Plant-2 Crushing and Processing Plants			153
14.3.1 Crushing Plant-2 (CR2)			156
14.3.2 Chemical Grade Plant -2 (CGP2)			156
14.4 CGP1 and CGP2 Mass Yield and Recovery Projection			157
14.5 TGP Performance			158
14.6 CGP1 Performance			159
14.7 CGP2 Performance			160
14.7.1 Updated Yield Equation			161
14.7.2 CGP2 Process Performance Assessment			161
14.8 SRK's Opinion			162
14.9 Product Specifications			162
14.10 Process Operating Cost			163
14.10.1 Crushing Plant Operating Costs			163
14.10.2 TGP Operating Costs			164
14.10.3 CGP1 Operating Costs			164
14.10.4 CGP2 Operating Costs			165
15 Infrastructure			166
15.1 Access, Roads, and Local Communities			166
15.1.1 Access			166
15.1.2 Airport			167
15.1.3 Rail			167
15.1.4 Port Facilities			168


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15.1.5 Local Communities and Labor			169
15.2 Facilities			170
15.2.1 Key Changes to Existing Infrastructure			171
15.2.2 Powerline Upgrade			171
15.2.3 Maintenance Service Area (MSA)			172
15.2.4 Mine Access Road			173
15.2.5 Explosives Storage Area			173
15.2.6 Warehouse Workshop Expansion			173
15.2.7 Laboratory Expansion			173
15.3 Waste Rock Storage and Temporary Stockpiles			173
15.4 Energy			174
15.4.1 Power			174
15.4.2 Propane			175
15.4.3 Diesel			175
15.4.4 Gasoline			175
15.5 Water and Pipelines			175
15.6 Tailings Disposal			176
15.6.1 General Overview			176
15.6.2 Design Responsibilities and Engineer of Record			178
15.6.3 Production Capacities and Schedule			179
15.6.4 Tailings Risk Discussion			180
16 Market Studies			181
16.1 Market Information			181
16.1.1 Lithium Market Introduction			181
16.1.2 Lithium Demand			182
16.2 Lithium Supply			185
16.3 Pricing Forecast			187
16.3.1 Product Sales			190
16.4 Contracts and Status			191
17 Environmental Studies, Permitting, and Plans, Negotiations, or Agreements with Local Individuals or Groups			192
17.1 Environmental Study Results			192
17.1.1 Flora and Vegetation			193
17.1.2 Terrestrial and Aquatic Fauna			193
17.1.3 Surface and Groundwater			194
17.1.4 Material Characterization			195
17.1.5 Air Quality and Greenhouse Gas Assessment			197
17.1.6 Noise, Vibration and Visual Amenity			198
17.1.7 Cultural Heritage			198
17.2 Environmental Management and Monitoring			198
17.2.1 Environmental Management			199


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17.2.2 Tailings and Waste Disposal			199
17.2.3 Water Management			200
17.2.4 Solid Waste Management			201
17.2.5 Environmental Monitoring			201
17.3 Project Permitting Requirements			201
17.3.1 Legislative Framework			201
17.3.2 Primary Approvals			202
17.3.3 Other Key Approvals			202
17.3.4 Environmental Compliance			204
17.4 Local Individuals and Groups			205
17.5 Mine Reclamation and Closure			205
17.5.1 Closure Planning			205
17.5.2 Closure Cost Estimate			208
17.5.3 Performance or Reclamation Bonding			209
17.5.4 Limitations on the Current Closure Plan and Cost Estimate			209
17.5.5 Potential Material Omissions from the Closure Plan and Cost Estimate			210
17.6 Adequacy of Plans			210
17.7 Commitments to Ensure Local Procurement and Hiring			211
18 Capital and Operating Costs			212
18.1 Capital Cost Estimates			212
18.1.1 Expansionary Capital Costs			212
18.1.2 Sustaining Capital Costs			213
18.2 Operating Cost Estimate			213
18.2.1 Mine Operating			214
18.2.2 Processing Operating Costs			215
18.2.3 Other Operating Costs			216
18.2.4 Shipping and Transportation Costs			216
18.2.5 Royalties			216
19 Economic Analysis			217
19.1 General Description			217
19.1.1 Basic Model Parameters			217
19.1.2 External Factors			217
19.1.3 Technical Factors			218
19.2 Results			223
19.3 Sensitivity Analysis			225
20 Adjacent Properties			226
21 Other Relevant Data and Information			227
21.1.1 Technical Grade Plant (TGP)			227
21.1.2 Tailings Retreatment Plant (TRP)			227


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21.1.3 Chemical Grade Plants (CGP3/CGP4)			227
22 Interpretation and Conclusions			228
22.1 Geology and Resources			228
22.2 Reserves and Mining Methods			228
22.2.1 Reserves and Mine Planning			228
22.2.2 Geotechnical			228
22.3 Mineral Processing and Metallurgical Testing			229
22.4 Processing and Recovery Methods			229
22.5 Infrastructure			230
22.6 Environmental/Social			230
22.7 Closure			231
22.8 Costs			231
22.9 Economics			231
23 Recommendations			233
23.1 Recommended Work Programs			233
23.1.1 Geology and Mineral Resources			233
23.1.2 Geotechnical Program			233
23.1.3 Environmental and Closure			233
23.2 Recommended Work Program Costs			233
24 References			235
25 Reliance on Information Provided by the Registrant			238
Signature Page			239


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List of Tables


Table 1-1: Greenbushes Summary Mineral Resources Exclusive of Mineral Reserves as of June 30, 2021 Based on US$672/t of Concentrate at Mine Gate– SRK Consulting (U.S.), Inc.			3
Table 1-2: Greenbushes Summary Mineral Reserves at End of the Fiscal Year Ended June 30, 2021 Based on US$577/t of Concentrate Mine Gate – SRK Consulting (U.S.), Inc.			4
Table 1-3: Life of Mine Operating Cost Averages			12
Table 1-4: Indicative Economic Results (Albemarle)			14
Table 2-1: Site Visits			19
Table 3-1: Land Tenure Table			25
Table 6-1: Major Lithium and Tantalum Ore Minerals			36
Table 7-1: Holes by Type Included in the 2020 Resource Statement			42
Table 8-1: Greenbushes Laboratory Detection Limit History			54
Table 9-1: Data Verification Summary			62
Table 11-1: Model vs. Drilling Comparison			70
Table 11-2: Statistics for Li2O Indicator Model			76
Table 11-3: Descriptive Statistics for Raw Sample Data – RDEX vs. GC Within Pegmatite			78
Table 11-4: RDEX Drilling Statistics, by Pegmatite Resource Domain			80
Table 11-5: Outlier Impact Evaluation – High Grade Domain			83
Table 11-6: Outlier Impact Evaluation – Low Grade Domain			83
Table 11-7: Li2O Variogram Models			91
Table 11-8: Block Model Details			97
Table 11-9: Li2O Estimation Parameters			99
Table 11-10: Statistical Comparison Li2O% – High Grade Domain			102
Table 11-11: Statistical Comparison Li2O% – Low Grade Domain			102
Table 11-12: SG Data by Rock Type – Bulk Density Assignment			105
Table 11-13: Model – Mined Reconciliation Results			106
Table 11-14: Cut-Off Grade Calculation for Resources			108
Table 11-15: Greenbushes Summary Mineral Resources Exclusive of Mineral Reserves as of June 30, 2021 Based on US$672/t of Concentrate at Mine Gate– SRK Consulting (U.S.), Inc.			111
Table 11-16: Greenbushes Summary In Situ Mineral Resources Inclusive of Mineral Reserves as of June 30, 2021 Based on US$672 of Concentrate at Mine Gate– SRK Consulting (U.S.), Inc.			112
Table 11-17: Greenbushes Summary Stockpile Mineral Resources Inclusive of Mineral Reserves as of June 30, 2021 – SRK Consulting (U.S.), Inc.			112
Table 11-18: Pit Scenario Table – Greenbushes Mineral Resources			113
Table 11-19: Grade Tonnage – Pit-Constrained Mineral Resources Inclusive of Reserves			114
Table 12-1: Pit Optimization Parameters			116
Table 12-2: Summary Pit Optimization Results			117
Table 12-3: Cut-Off Grade Calculation			125
Table 12-4: Greenbush Summary Mineral Reserves at End of the Fiscal Year Ended June 30, 2021 Based on US$577/t of Concentrate Mine Gate – SRK Consulting (U.S.), Inc.			127
Table 13-1: Load and Haul Contractor Mining Fleet			129


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Table 13-2: Slope Design Parameter for Kapanga Pit			130
Table 13-3: Summary of Limit Equilibrium Stability Analysis Minimum Factor of Safety			132
Table 13-4: Grade Tonnage Curve within the Reserves Pit (Not Diluted) – Current Stockpiles Not Included			135
Table 13-5: Phase Inventory (June 30, 2020 to End of Mine Life)*			137
Table 13-6: LoM Production Schedule			141
Table 13-7: LoM Yearly Bench Sinking Rates (Number of 10-m-High Benches Mined per Phase per Year)			143
Table 13-8: Waste Dump Capacities by Bench (10-m-High Lifts)			144
Table 14-1 : CGP1 and CGP2 Model Yield and Li2O Recovery vs. Feed Grade			158
Table 14-2 : Production Summary for TGP			159
Table 14-3 : Summary of CGP1 Production			159
Table 14-4 : CGP1 Yield Model Prediction			159
Table 14-5 : Summary of CGP2 Production 2020 (Jan-Apr) and 2021 (May-Sept)			160
Table 14-6: Greenbushes Lithium Product Specifications			163
Table 14-7: Crushing Circuit Opex (CR1 And CR2)			163
Table 14-8: TGP Operating Cost Summary			164
Table 14-9: CGP1 Operating Cost Summary			165
Table 14-10: CGP2 Operating Cost Summary			165
Table 15-1: Local Communities			169
Table 15-2: Labor by Area			170
Table 16-1: Chemical Grade Spodumene Specifications			190
Table 16-2: Historic Greenbushes Production (Tonnes Annual Production, 100% Basis)			190
Table 17-1: Mining Proposals and MCPs Conditioned in Mining Tenure			204
Table 17-2: Reclamation and Closure Domains and Responsibilities			207
Table 18-1: Life-of-Mine Capital Costs			212
Table 18-2: Life-of-Mine Expansionary Capital Costs			212
Table 18-3: Life-of-Mine Sustaining Capital Costs			213
Table 18-4: Life-of-Mine Total Operating Cost Estimate			214
Table 18-5: Mine Operating Costs			214
Table 18-6: Process Operating Costs			215
Table 18-7: Other Operating Costs			216
Table 18-8: Shipping and Transportation Costs			216
Table 19-1: Basic Model Parameters			217
Table 19-2: Modeled Exchange Rate Profile			217
Table 19-3: Greenbushes Mining Summary			219
Table 19-4: Greenbushes Processing Summary			220
Table 19-5: Greenbushes Mining Cost Summary			221
Table 19-6: Variable Processing Costs			222
Table 19-7: Greenbushes Processing Cost Summary			222
Table 19-8: SG&A Fixed Costs			222
Table 19-9: SG&A Variable Costs			222
Table 19-10: Greenbushes SG&A Cost Summary			222
Table 19-11: Indicative Economic Results			223
Table 19-12: Greenbushes Annual Cashflow			224


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Table 23-1: Summary of Costs for Recommended Work			234
Table 25-1: Reliance on Information Provided by the Registrant			238

List of Figures


Figure 1-1: Mine Production Profile			5
Figure 1-2: Sustaining Capital Profile (Tabular Data shown in in Table 19-12)			12
Figure 1-3: Life of Mine Operating Cost Profile (Tabular Data shown in in Table 19-12)			12
Figure 1-4: Life of Mine Operating Cost Summary			13
Figure 1-5: Annual Cashflow Summary (Tabular Data shown in in Table 19-12)			14
Figure 3-1: General Location Map, Greenbushes Mine			22
Figure 3-2: Greenbushes Regional Location Map			23
Figure 3-3: Property Area			24
Figure 3-4: Greenbushes Land Tenure Map			26
Figure 6-1: Regional Geology Map			33
Figure 6-2: Simplified Stratigraphic Column			35
Figure 6-3 : Greenbushes Local Geology Map			38
Figure 6-4 : General Area of Interest Nomenclature – C1, C2, C3, and Cornwall Pit Areas			39
Figure 6-5 : Cross Section Showing General Stratigraphy and Greenbushes Pegmatite Mineral Zoning			40
Figure 7-1: Drilling Type and Extents			45
Figure 7-2: Box and Whisker Plot – Li2O by Drilling Type			46
Figure 7-3: Drilling Type Mean Comparison – By Average Separation Distance			47
Figure 7-4: Plan View Illustrating Exploration Drilling by Date			51
Figure 8-1: Greenbushes Drill Hole Sample Preparation Procedure			53
Figure 8-2: Results for CRM SORE1			56
Figure 8-3: Results for CRM SORE2			57
Figure 8-4: Scatterplot of Recent Field Duplicates >0.2% Li2O			59
Figure 8-5: QQ Plot of Field Duplicates Post-January 2016			60
Figure 8-6: HARD Plot of Field Duplicates Post January 2016			61
Figure 11-1: Example of In-Pit Geological Mapping Integration for 3D Modeling			67
Figure 11-2: Cross Section View of Oxidation Model			68
Figure 11-3: Plan View of 3D Lithology Model			71
Figure 11-4: Cross-Section View of Geological Model			72
Figure 11-5: Li2O Histogram of Raw Assays Internal to Pegmatite			74
Figure 11-6: Pegmatite Distribution of Composited Li2O Assays Around 0.7% L i2O			75
Figure 11-7: Perspective View of 0.7% Li2O Spodumene Pegmatite			75
Figure 11-8: Spatial Relationship of RDEX and GC Drilling			79
Figure 11-9: Log Probability Plot – Li2O% High Grade Domain			81
Figure 11-10: Log Probability Plot – Li2O% Low Grade Domain			82
Figure 11-11: Histogram of Sample Length within Pegmatite			84
Figure 11-12: Scatter Plot Li2O% and Sample Length			85
Figure 11-13: Compositing Comparisons – Li2O%			86
Figure 11-14: Modeled Variograms – Li2O% - High Grade Domain			88


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Figure 11-15: Modeled Variograms – Li2O% - Low Grade Domain			90
Figure 11-16: QKNA Block Size Sensitivity			93
Figure 11-17: QKNA Sample Selection Sensitivity			94
Figure 11-18: QKNA Search Range Sensitivity			95
Figure 11-19: Structural Planes Utilized for Variable Orientation Modeling			96
Figure 11-20: Block Model Extents/Parameters			97
Figure 11-21: Visual Comparison of Li2O Distribution			101
Figure 11-22: Swath Plot – Li2O% – High Grade Domain			103
Figure 11-23: Depletion Surfaces/Volumes			104
Figure 11-24: Classification Process			107
Figure 12-1: Plan View of the Ultimate Pit Design			119
Figure 12-2: Section View of Ultimate Pit Design (Looking North)			120
Figure 12-3: Plan View of Phase Design (11 Phases)			121
Figure 12-4: Section View of Phase Design (Looking North)			122
Figure 12-5: Greenbush Final Pit and Waste Dump Design 3D View with Mineralized Pegmatite			123
Figure 13-1: Greenbush Central Lode Pit as of June 30, 2021			128
Figure 13-2: Plan View of 3D 2020 Ultimate Pit with Slope Stability Cross Section Locations			131
Figure 13-3: LoM Pit Design			134
Figure 13-4: Grade Tonnage Curve within Reserve Pit (Undiluted Li2O% Grades)			136
Figure 13-5: Greenbushes Dilution and Mining Recovery Edge Effect			138
Figure 13-6: Mining and Rehandle Profile			138
Figure 13-7: Feed Grade by Plant			139
Figure 13-8: Combined Process Plant Throughput and Grade (TGP, CGP1 and CGP2)			139
Figure 13-9: Concentrate Production by Plant (TGP, CGP1 and CGP2)			140
Figure 13-10: Long-Term Ore Stockpile Size			140
Figure 14-1: Simplified TGP Flowsheet			146
Figure 14-2: TGP Process Flowsheet			148
Figure 14-3: CR1 Crushing Plant Flowsheet			151
Figure 14-4: CGP1 Process Flowsheet			152
Figure 14-5: CGP1 Process Flowsheet			155
Figure 15-1: Greenbushes Project General Location			167
Figure 15-2: Western Australia Railroad Lines			168
Figure 15-3: Berth 8 at Bunbury Port			169
Figure 15-4: General Description with Facilities Map			171
Figure 15-5: Layout of the New MSA Facilities			172
Figure 15-6: Greenbushes Power Layout			174
Figure 15-7: Greenbushes Tailings Locations			178
Figure 16-1: Global Electric Vehicle Lithium Demand			183
Figure 16-2: Historic Lithium Prices (Lithium Carbonate/Hydroxide)			187
Figure 16-3: Historic Spodumene Prices			188
Figure 16-4 : Supply/Demand Scenarios (2016 to 2023)			1 88
Figure 16-5 : Technical-Grade Lithium Carbonate/Spodumene Price Relationship (2018 to 2020)			189


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Figure 18-1: Mine Operating Cost Profile			215
Figure 19-1: Greenbushes Mining Profile (Tabular data in Table 19-12)			218
Figure 19-2: Greenbushes Processing Profile (Tabular data in Table 19-12)			219
Figure 19-3: Greenbushes Production Profile (Tabular data in Table 19-12)			219
Figure 19-4: Life of Mine Operating Cost Summary (Tabular data in Table 19-12)			220
Figure 19-5: Life-of-Mine Operating Cost Contributions			221
Figure 19-6: Greenbushes Sustaining Capital Profile (Tabular data in Table 19-12)			223
Figure 19-7: Annual Cashflow Summary (Tabular data in Table 19-12)			225
Figure 19-8: Greenbushes NPV Sensitivity Analysis			225


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List of Abbreviations

The metric system has been used throughout this report. Tonnes are metric of 1,000 kg, or 2,204.6 lb. All currency is in U.S. dollars (US$) unless otherwise stated.


Abbreviation			Unit or Term
A			ampere
AA			atomic absorption
A/m2			amperes per square meter
ANFO			ammonium nitrate fuel oil
Ag			silver
Au			gold
AuEq			gold equivalent grade
°C			degrees Centigrade
CCD			counter-current decantation
CIF			cost-insurance-freight
CIL			carbon-in-leach
CoG			cut-off grade
cm			centimeter
cm2			square centimeter
cm3			cubic centimeter
cfm			cubic feet per minute
ConfC			confidence code
CRec			core recovery
CSS			closed-side setting
CTW			calculated true width
°			degree (degrees)
dia.			diameter
EIS			Environmental Impact Statement
EMP			Environmental Management Plan
FA			fire assay
ft			foot (feet)
ft2			square foot (feet)
ft3			cubic foot (feet)
g			gram
gal			gallon
g/L			gram per liter
g-mol			gram-mole
gpm			gallons per minute
g/t			grams per tonne
ha			hectares
HDPE			Height Density Polyethylene
hp			horsepower
HTW			horizontal true width
ICP			induced couple plasma
ID2			inverse-distance squared
ID3			inverse-distance cubed
IFC			International Finance Corporation
ILS			Intermediate Leach Solution
kA			kiloamperes
kg			kilograms
km			kilometer
km2			square kilometer
koz			thousand troy ounce
kt			thousand tonnes
kt/d			thousand tonnes per day
kt/y			thousand tonnes per year
kV			kilovolt


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kW			kilowatt
kWh			kilowatt-hour
kWh/t			kilowatt-hour per metric tonne
L			liter
L/sec			liters per second
L/sec/m			liters per second per meter
lb			pound
LHD			Long-Haul Dump truck
LLDDP			Linear Low Density Polyethylene Plastic
LOI			Loss On Ignition
LoM			Life-of-Mine
m			meter
m2			square meter
m3			cubic meter
masl			meters above sea level
MARN			Ministry of the Environment and Natural Resources
mg/L			milligrams/liter
mm			millimeter
mm2			square millimeter
mm3			cubic millimeter
MME			Mine & Mill Engineering
Moz			million troy ounces
Mt			million tonnes
MTW			measured true width
MW			million watts
m.y.			million years
NGO			non-governmental organization
NI 43-101			Canadian National Instrument 43-101
OSC			Ontario Securities Commission
oz			troy ounce
%			percent
PLC			Programmable Logic Controller
PLS			Pregnant Leach Solution
PMF			probable maximum flood
ppb			parts per billion
ppm			parts per million
QA/QC			Quality Assurance/Quality Control
RC			rotary circulation drilling
RoM			Run-of-Mine
RQD			Rock Quality Description
SEC			U.S. Securities & Exchange Commission
sec			second
SG			specific gravity
SPT			standard penetration testing
st			short ton (2,000 pounds)
t			tonne (metric ton) (2,204.6 pounds)
t/h			tonnes per hour
t/d			tonnes per day
t/y			tonnes per year
TSF			tailings storage facility
TSP			total suspended particulates
µm			micron or microns
V			volts
VFD			variable frequency drive
W			watt
XRD			x-ray diffraction
y			year


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1Executive Summary

This report was prepared as a Prefeasibility-level Technical Report Summary in accordance with the Securities and Exchange Commission (SEC) S-K regulations (Title 17, Part 229, Items 601 and 1300 until 1305) for Albemarle Corporation (Albemarle) by SRK Consulting (U.S.), Inc. (SRK) on the Greenbushes Mine (Greenbushes).

Greenbushes is held within the operating entity, Talison Lithium Australia Pty Ltd (Talison), of which Albemarle is a 49% owner with the remaining 51% ownership controlled by a Joint Venture (Tianqi/IGO JV) between Tianqi Lithium (Tianqi) and IGO Ltd (IGO) with ownership of 26.01% and 24.99% respectively.

SRK’s reserve estimate is based on the production of chemical grade spodumene concentrate from three existing processing facilities, the two existing chemical grade plants (CGP1 and CGP2) as well as the existing technical grade (TGP) spodumene plant. Talison’s future production from the technical grade plant is planned to target technical grade spodumene products. However, classification of resource applicable for processing as technical grade product does not occur until the grade-control drilling stage and therefore adequate data is not available to characterize production from this plant as technical grade for this reserve estimate. Instead, production from this plant has been assumed as lower value (on average) chemical grade product.

Talison recently constructed a processing facility to recover lithium from historic tailings (tailings retreatment plant or TRP). SRK has excluded the TRP from its reserve estimate due to limited materiality and technical data underlying resource and production assumptions. Finally, Talison has also proposed further expansion of chemical grade processing facilities (referred to as CGP3 and CGP4) which have also been excluded from the analysis due to uncertainty on future development timing. These exclusions are discussed further in the report in Section 2 and 21.

This report was amended to include additional clarifying information in December 2022. The basis of the report is unchanged. The summary of the changes and location in document are summarized in Chapter 2.1.

1.1Property Description (Including Mineral Rights) and Ownership

The Greenbushes property is a large mining operation located in Western Australia extracting lithium and tantalum products from a pegmatite orebody. In addition to being the longest continuously operated mine in Western Australia, the Greenbushes pegmatite is one of the largest known spodumene pegmatite resources in the world. The Greenbushes Lithium Operations property area is approximately 2,000 ha, which is a smaller subset of a larger 10,067 ha land package controlled by Talison. Talison holds 100% of 10,067 Ha of mineral tenements which cover the Greenbushes Lithium Operations area and surrounding exploration areas.

1.2Geology and Mineralization


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(north by northwest), up to 300 m wide (normal to dip), strikes north to north-west and dips moderately to steeply west to south-west.

Overall, the Greenbushes pegmatite averages approximately 2% Li2O. Major minerals are quartz, spodumene, albite and K-feldspar. Primary lithium minerals are spodumene, LiAlSi2O6 (~8% Li2O) and spodumene varieties kunzite and hiddenite. Minor lithium minerals include lepidolite (mica), amblygonite and lithiophilite (phosphates).

1.3Status of Exploration, Development and Operations

SRK notes that the property is an active mining operation with a long and robust history, and that results and interpretation from exploration data is generally supported in more detail by extensive drilling and by active mining exposure of the orebody in multiple pits. The area around the current Greenbushes Lithium Operations has been extensively mapped, sampled, and drilled over several decades of exploration work. For the purposes of this report, the active mining, extensive exploration drilling, and in-pit mapping should be considered the most relevant and robust exploration work for the current mineral resource estimation.

1.4Mineral Resource and Mineral Reserve Estimates

1.4.1Mineral Resources

The Mineral Resource Estimate (MRE) discussed herein remains based on information which has not materially changed since disclosure on June 30, 2020. SRK notes that very limited additional drilling has been added in the subsequent 12 months, and as of the effective date of June 30, 2021, no update to the MRE was conducted due to lack of material change to the Central Lode data. The mineral resource statement has been updated to reflect revised pit optimization parameters for the June 30, 2021 effective date. These may reflect adjustments in economics, pit slope angles, or other factors which have not modified the input data such as drilling, geology models, or block models. The nearby Kapanga deposit was developed further by Talison and is expected to feature in future disclosure.

Mineral resources have been estimated by SRK and are based on a spodumene concentrate sales price of US$750/t of concentrate CIF China (or US$672/t of concentrate at the mine gate after deducting for transportation and government royalty). SRK generated a 3D geological model informed by various data types (primarily drilling and pit mapping) to constrain and control the shapes of the pegmatite bodies which host the Li2O. Drilling data from the exploration data set was composited within relevant geological wireframes, and Li2O grades were interpolated into a block model using ordinary kriging methods. Results were validated visually, via various statistical comparisons, and against recent reconciliation data. The estimate was depleted for current production, categorized in a manner consistent with industry standards, and reviewed with Talison site personnel. Mineral resources have been reported using an optimized pit shape, based on economic and mining assumptions to support the reasonable potential for eventual economic extraction of the resource. A cut-off grade has been derived from these economic parameters, and the resource has been reported above this cut-off. Current mineral resources, exclusive of reserves, are summarized in Table 1-1.


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Table 1-1: Greenbushes Summary Mineral Resources Exclusive of Mineral Reserves as of June 30, 2021 Based on US$672/t of Concentrate at Mine Gate– SRK Consulting (U.S.), Inc.


Area	Category	100% Tonnes (Mt)	Attributable Tonnes (Mt)	Li2O (%)	Cut-Off (% Li2O)	Mass Yield	100% Concentrate Tonnes @ 6.0% Li2O (Mt)	Attributable Concentrate Tonnes @ 6% Li2O (Mt)
Resource Pit 2021	Indicated	31.8	15.6	1.54	0.57	17.2%	5.5	2.7
	Inferred	23.9	11.7	1.05	0.57	10.3%	2.5	1.2
Reserve Pit 2021 *	Indicated	2.6	1.3	0.60	0.57-0.70	5.2%	0.1	0.1
	Inferred	16.8	8.2	1.05	0.57-0.70	10.4%	1.8	0.9
Stockpiles	Inferred	0.3	0.1	1.40	0.50	15.0%	0.04	0.02

Source: SRK, 2021

•Albemarle’s attributable portion of mineral resources and reserves is 49%.

•Mineral resources are reported exclusive of mineral reserves. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

•Resources have been reported as in situ (hard rock within optimized pit shell) and stockpile (mined and stored on surface as blasted/crushed material).

•Resources which are contained within the mineral reserve pit design may be excluded from reserves due to an Inferred classification or because they sit in the incremental COG range between the resource and reserve COG. They are disclosed separately from the resources contained within the Resource Pit. There is reasonable expectation that some Inferred resources within the mineral reserve pit design may be converted to higher confidence materials with additional drilling and exploration effort.

•All Measured and Indicated Stockpile resources have been converted to mineral reserves.

•Mineral resources are reported considering a nominal set of assumptions for reporting purposes:

◦Mass Yields for chemical grade material are based on Greenbushes CGP1 LOM feed mass yield formula. For the LoM material, mass yield is assumed at 29.49% and is subject to a 97% recovery limitation when the lithium oxide grade exceeds 5.5%. Mass yield varies as a function of grade, and may be reported herein at lower mass yields than the CGP1 average.

◦Pit optimization and economics for derivation of CoG include mine gate pricing of US$672/t of 6% Li2O concentrate, US$ 4.75/t mining cost (LoM average cost-variable by depth), US$ 17.87/t processing cost, US$ 4.91/t G&A cost, and US$ 2.66/t sustaining capital cost.

◦Costs estimated in Australian Dollars were converted to US Dollars based on an exchange rate of 0.76AU$:1.00US$.

◦These economics define a CoG of 0.573% Li2O.

◦An overall 43% pit slope angle, 0% mining dilution, and 100% mining recovery.

◦Resources were reported above this 0.573% Li2O CoG and are constrained by an optimized break-even pit shell.

◦No infrastructure movement capital costs have been added to the optimization.

◦Stockpile resources have been previously mined between nominal CoG’s of 0.5 to 0.7% Li2O.

•Mineral resources tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding.

•SRK Consulting (U.S.) Inc. is responsible for the mineral resources with an effective date: June 30, 2021.

1.4.2Mineral Reserve Estimate

The conversion of mineral resources to mineral reserves has been completed in accordance with United States Security and Exchange Commission (SEC) regulations CFR 17, Part 229 (S-K 1300). Mineral reserves were determined based on a spodumene concentrate sales price of US$650/t of concentrate CIF China (or US$577/t of concentrate at the mine gate after deducting for transportation and government royalty). The mineral reserves are based on PFS level study as defined in §229.1300 et seq.

The mineral reserve calculations for the Greenbushes Central Lode lithium deposit have been carried out by a Qualified Person as defined in §229.1300 et seq. SRK Consulting (U.S.) Inc. is responsible for the mineral reserves reported herein. Table 1-2 shows the Greenbushes mineral reserves with an effective date of June 30, 2021.


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Table 1-2: Greenbushes Summary Mineral Reserves at June 30, 2021 Based on US$577/t of Concentrate Mine Gate – SRK Consulting (U.S.), Inc.


Classification	Type	100% Tonnes (Mt)	Attributable Tonnes (Mt)	Li2O%	Mass Yield (%)	100% Concentrate (Mt)	Attributable Concentrate (Mt)
Probable Mineral Reserves	In situ	138.1	67.7	1.97	22.6%	31.3	15.3
	Stockpiles	4.6	2.3	1.31	13.4%	0.6	0.3
	In situ + Stockpiles	142.7	69.9	1.95	22.3%	31.9	15.6

Source: SRK, 2021

•Albemarle’s attributable portion of mineral resources and reserves is 49%.

•Mineral reserves are reported exclusive of mineral resources.

•Indicated in situ resources have been converted to Probable reserves.

•Measured and Indicated stockpile resources have been converted to Probable mineral reserves.

•Mineral reserves are reported considering a nominal set of assumptions for reporting purposes:

◦Mineral reserves are based on a mine gate price of US$577/t of chemical grade concentrate (6% Li2O).

◦Mineral reserves assume 80% mining recovery for ore/waste contact areas and 100% for non-waste contact material

◦The mass yield (MY) for reserves processed through the chemical grade plants is estimated by the based on Greenbushes’ mass yield formula and the LoM mass yield is 29.49% subject to a 97% recovery limitation when the lithium oxide grade exceeds 5.5%.

◦The mass yield (MY) for reserves processed through the chemical grade plant CGP2 in the next three to four years is estimated by the based on Greenbushes’ mass yield formula for a LoM mass yield of 16.77%, and is subject to a 97% recovery limitation when the lithium oxide grade exceeds 5.5%. The CGP2 plant is going through a ramp up period where lower recoveries are expected until all equipment has been optimized and additional capital is spent.

◦The mass yield (MY) for reserves processed through the technical grade plant is estimated by the based on Greenbushes’ mass yield formula and the LoM mass yield is 46.18%. There is approximately 3.5 Mt of technical grade plant feed at 4% Li2O

◦Pit optimization and economics for derivation of CoG include mine gate pricing of US$577/t of 6% Li2O concentrate, US$ 4.75/t mining cost (LoM average cost-variable by depth), US$ 17.87/t processing cost, US$ 4.91/t G&A cost, and US$ 2.66/t sustaining capital cost. The mine gate price is based on US$650/t-conc CIF less US$73/t-conc for government royalty and transportation to China.

◦Costs estimated in Australian Dollars were converted to US Dollars based on an exchange rate of 0.76AU$:1.00US$.

◦The price, cost and mass yield parameters, along with the internal constraints of the current operations, result in a mineral reserves CoG of 0.7% Li2O.

◦The CoG of 0.7% Li2O was applied to reserves that are constrained by the ultimate pit design and are detailed in a yearly mine schedule

◦Stockpile reserves have been previously mined and are reported at a 0.7% Li2O CoG

•Waste tonnage within the reserve pit is 459 Mt at a strip ratio of 3.32:1 (waste to ore – not including reserve stockpiles)

•Mineral reserve tonnage, grade and mass yield have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding

◦Mt = millions of metric tonnes

◦Reserve tonnes are rounded to the nearest hundred thousand tonnes

•SRK Consulting (U.S.) Inc. is responsible for the mineral reserves with an effective date: June 30, 2021

1.5Mining Operations

Greenbushes is an operating mine that uses conventional open pit methods to extract mineral reserves containing economic quantifies of Li2O to produce both chemical and technical grade spodumene concentrates. Drilling, blasting, and load and haul activities are performed by contractors. Grade control is performed with reverse circulation (RC) drills that sample on 2.5 m intervals. In ore areas, mining occurs on 5 m benches and in waste areas, 10 m benches are used. Ore is hauled to the RoM pad or to long-term ore stockpiles. Waste rock is hauled to a waste dump adjacent to the open pit.


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The life-of-mine (LoM) production profile is shown in Figure 1-1. The peak annual material movement is approximately 24 Mt and mining spans approximately 32 years (or approximately 35 years when including the processing of low-grade stockpiles at the end of the mine life). The LoM average strip ratio (w:o) is 3.32.

Source: SRK, 2021

Figure 1-1: Mine Production Profile

1.6Mineral Processing and Metallurgical Testing

Greenbushes operates Chemical Grade Plant Number 1 (CGP1) to recover a spodumene from ore containing about 2.5% Li2O into lithium concentrates containing about 6% Li2O. The CGP1 process flowsheet utilizes unit operations that are standard to the industry including: ball mill grinding, heavy media separation (HMS), wet high intensity magnetic separation (WHIMS), coarse mineral flotation and conventional fine mineral flotation. In addition, Greenbushes completed the construction of Chemical Grade Plant Number 2 (CGP2) during 2019 and has initiated commissioning of this facility.

As part of the process design for CGP2, Greenbushes conducted an evaluation of the use of high pressure grinding rolls (HPGR) as an alternative to the ball mill grinding circuit currently used in CGP1. The HPGR was determined by Greenbushes to generate fewer non-recoverable fines (less than 45 µm) and offer the potential of improving overall lithium recovery. The results of this evaluation indicated the following benefits associated with the use of a HPGR instead of ball mill grinding in CGP2:

•Reduction in over-grinding of spodumene enables a reduction in lithium losses with the slimes.

•Better liberation of spodumene in coarse size fractions for improved HMS performance.

•Better liberation of spodumene in the fine fractions.

•Selectively grinding softer minerals than spodumene to a fine size. Iron minerals are therefore concentrated in the fine fractions where they are easier to remove in WHIMS.


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•HPGR is easier to adjust on-line to suit variations in ore hardness compared to a ball mill circuit.

Greenbushes used a combination of size distributions, Li2O analysis of size fractions and liberation data to estimate the yield and lithium recovery that could result by using an HPGR instead of conventional ball mill grinding in the comminution circuit. This resulted in the development of a yield model that estimates incrementally higher lithium recovery in CGP2, which is attributed to HPGR comminution instead of ball mill grinding as practiced in CGP1. This additional lithium recovery has not yet been demonstrated during CGP2 commissioning.

1.7Processing and Recovery Methods

Greenbushes currently has two ore crushing facilities (CR1 and CR2) and three ore processing plants which include a technical grade plant (TGP), chemical grade plant-1 (CGP1) and chemical grade plant-2 (CGP2) with a nominal capacity of 4.5 Mt/y of pegmatite feed to produce a nominal 1.3 Mt/y of spodumene concentrate. TGP is a relatively small plant that processes approximately 350,000 t/y of ore at an average grade of about 3.8% Li2O and produces about 150,000 t of spodumene concentrate products. TGP produces a variety of product grades identified as SC7.2, SC6.8, SC5.5 and SC5.0.

During the period of 2017 to 2021 (Jan-Sept) ore tonnes processed in TGP ranged from 232,055 to 373,643 t and ore grades ranged from 3.72 to 3.96% Li2O. Overall lithium recovery ranged from 68.8 to 75.1% into six separate products. Overall mass yield during this period ranged from 38.4 to 44.9%.

CGP1 and CGP2 process spodumene ore into lithium concentrates containing a minimum of 6% Li2O and a maximum iron content of 1% iron oxide (Fe2O3). The process flowsheets utilized by both CGP1 and CGP2 are similar and include the following major unit operations to produce chemical grade spodumene concentrates:

•Crushing

•Grinding and classification

•Heavy media separation

•WHIMS

•Coarse mineral flotation

•Regrinding

•Regrind coarse mineral flotation

•Fine mineral flotation

•Concentrate filtration

•Final tailings thickening and storage at the tailing storage facility (TSF)

Ore tonnes processed in CGP1 during the period 2016 to 2021 (Jan to Sep) ranged from 1.18 Mt to 1.82 Mt with ore grades ranging from 2.49 to 2.70% Li2O. During 2020, 1.40 Mt of ore were processed at an average grade of 2.51% Li2O with 74.9% of the contained lithium being recovered into concentrates averaging 6.06% Li2O, representing a mass yield of 31.1%. During 2021 (Jan to Sep), 1.36 Mt of ore were processed at an average grade of 2.57% Li2O. Lithium recovery averaged 75.2% into concentrates that averaged 6.07% Li2O representing a mass yield of 32%. Generally, Greenbushes’ CGP1 yield model provides a good prediction of plant performance.

CGP2 commissioning began during September 2019 and continued through April 2020 and was then shut down and put on care and maintenance during the period of March 2020 to April 2021 due to


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market demand considerations. CGP2 was then put back into production during May 2021. During the 2020 plant commissioning period from January to April CGP2 processed 280,108 t of ore at an average grade of 2.19% Li2O and recovered 52.9% of the lithium into 53,089 t of concentrate at an average grade of 6.10% Li2O and 0.93% Fe2O3. Concentrate yield for this period averaged 18.9%. Although product quality specifications were achieved, lithium recovery and concentrate yield were substantially below target. During 2021 (May-September), CGP2 processed 847,058 t of ore at an average grade of 2% Li2O and recovered 51% of the lithium (versus a predicted recovery of 75%) into 145,230 t of concentrate at an average grade of 5.94% Li2O and 1.01% Fe2O3. Concentrate yield for this period averaged 17.2% versus the model yield projection of 25%. Although product quality specifications were generally achieved, lithium recovery and concentrate yield have continued to be substantially below target.

Greenbushes has continued to investigate CGP2 plant performance, and their metallurgical department issued a summary report during October 2021 which addressed efforts to identify the key problem areas in the plant. In addition, Greenbushes metallurgical staff have developed a new yield equation for CGP2 based on actual performance during the period 2019 to 2021. For purposes of financial modeling SRK has assumed that this updated yield equation will represent CGP2 production during the period of 2023 to 2024 while Greenbushes works to resolve process issues related to CGP2. SRK assumes that these process issues will be resolved by Q1 2025 and from that point on CGP2 yield will be represented by the yield equation that has been established for CGP1. SRK notes that CGP2 and CGP1 flowsheets are similar and both plants process ore from the same mining operation, as such, SRK believes that it is reasonable to expect that CGP2 will eventually achieve design product targets but cautions that at this point design performance of CGP2 remains to be demonstrated and has not yet been confirmed.

In order to further assess CGP2 performance issues, Greenbushes retained MinSol Engineering Pty Ltd (MinSol) to undertake a performance assessment of CGP2 in November 2021 to provide a baseline for the current plant operating conditions versus design and to provide recommendations to optimize CGP2 performance with respect to concentrate grade and recovery. Based in this initial review, MinSol identified the following priority areas as a path forward to address CGP2 process performance:

•Undertake a comprehensive plant audit to better quantify the source and magnitude of recovery and losses.

•Engage instrument suppliers to rectify calibration and accuracy issues to enable plant balance and troubleshooting.

•Reduce the panel apertures on the secondary screen to allow subsequent reduction in primary stacksizer screen aperture to 600um per design.

•Modify the classifier split points per design to reduce load on fines WHIMS, increase feed to coarse flotation and reduce the particle top size into the fines float.

•Undertake a detailed test program to assess the cause for high lithium losses during flotation

•Return the coarse thickener underflow back onto the process (currently a product stream that is directed to tailings).

1.8Infrastructure

Greenbushes is a mature operating lithium hard rock open pit mining and concentration project that produces lithium carbonate. Access to the site is by paved highway off a major Western Australian highway. Employees travel to the project from various communities in the region. The established facilities on the site include security fencing and guard house access, communications systems,


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access roads and interior site roads, administrative and other offices, change houses, existing mine services area (MSA), warehousing, shops, crushing plants, processing plants (CGP1/CGP2/TGP), tailings facilities, explosives storage facilities, water supply and distribution system with associated storage dams, power supply and distribution system, laboratory, fuel storage and delivery system, reverse-osmosis water treatment plant, health-safety-training offices, mine rescue area, storage sheds, mine waste storage area, miscellaneous waste storage facilities, and engineering offices. The concentrate is shipped by truck to port facilities located at Bunbury 90 km to the west of the Project. These facilities are in place and functional. An abandoned rail line is present north of the project but not currently used.

Several changes or modifications to the infrastructure are planned/or currently in progress. An upgraded 132 kV power line will be placed in service by 2023. A new Mine Service Area (MSA) will be constructed and operating by Q1 2023 to provide mine heavy and light equipment maintenance facilities and technical services offices as the existing MSA will be impacted by the planned pit progression. A mine access road will be added to reduce truck traffic through Greenbushes. The current explosives handling facilities are being impacted by near-term pit expansion and new facilities are being completed to the west of the processing plant areas where they will not require to be moved again. The warehouse and laboratories are planned to be expanded. The tailings facilities will be expanded with the addition of a new two cell facility known as TSF4 located adjacent to and south of the existing TSF2 and TSF1 facilities. TSF1 will be expanded late in the mine life to meet tailings storage needs. The waste rock facilities will continue to expand on the west side of the pit toward the highway and south toward the permit boundary adjacent to TSF4.

1.9Environmental Studies, Permitting, and Plans, Negotiations, or Agreements with Local Individuals or Groups

The Project has been in operation as a hard rock mine since 1983 and is fully permitted for its current operations. The Project is in the process of obtaining further approvals for expansion; however, consideration of the expansion has been excluded from this evaluation as detailed assessment information is not yet available. Talison holds the mining rights to lithium at the Project and Global Advanced Metals (GAM) holds the rights to non-lithium minerals. GAM processes tantalum and tin extracted by Talison during mining activities within the Project area under their own operating license and GAM are, therefore, responsible for the environmental management of their premises. Under agreement, Talison provides services to GAM consisting of laboratory analysis and environmental reporting and shared use of some water circuit infrastructure.

Environmental Study Results

The Project is in the southwest of Western Australia in the Shire of Bridgetown-Greenbushes. The town of Greenbushes is located on the northern boundary of the mine. The majority of the Project is within the Greenbushes Class A State Forest (State Forest 20) which covers 6,088 ha and is managed by the Department of Biodiversity, Conservation and Attractions (DBCA) as public reserve land under the Conservation and Land Management Act 1984 (CALM Act). The DBCA manages State Forest 20 in accordance with the Forest Management Plan 2014-2023, that aims to maintain the overall area of native forest and plantation available for forest produce, including biodiversity and ecological integrity. The remaining land in the Project area is privately owned. During development


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and subsequent modifications to the mine, environmental studies and impact assessments have been completed to support project approval applications, including studies related to:

•Flora and vegetation

•Terrestrial and aquatic fauna

•Surface and groundwater

•Material characterization (geochemistry)

•Air quality and greenhouse gas assessment

•Noise, vibration and visual amenity

•Cultural Heritage

Environmental Management and Monitoring

The Project operates under approvals that contain conditions for environmental management that include waste and tailings disposal, site monitoring, and water management. Primary approvals are authorized under the federal Environment Protection and Biodiversity and Conservation Act 1999 (EPBC Act), the Environmental Protection Act 1986 (EP Act) including the environmental impact assessment approval for the proposed mine expansion (Ministerial Statement 1111), the operation of a prescribed premises (License L4247/1991/13), approval for the construction and commissioning of a prescribed premises for the proposed mine expansion (W6283/2019/1), and under the Mining Act 1978 under an approved Mine Closure Plan (Reg ID 60857) and several Mining Proposals (section 17.3) conditions.

Specific requirement for compliance and ambient monitoring are defined in the License (L4247/1991/13) and Works Approval (W6283/2019/1). The monitoring results must be reported to the regulators (DWER and DMIRS) on an annual basis and include point source emissions to surface water including discharge and seepage locations, process water monitoring, permitted emission points for waste discharge to surface water, ambient surface water quality and ambient groundwater quality monitoring, ambient surface water flow and each spring, complete an ecological assessment of four sites upstream and six sites downstream of the Norilup Dam.

Project Permitting Requirements

Australia has a robust and well-developed legislative framework for the management of the environmental impacts from mining activities. Primary environmental approvals are governed by the federal EPBC Act and the environmental impact assessment process in Western Australia is administered under Part IV of the Environmental Protection Act 1986 (EP Act). Additional approvals in Western Australia are principally governed by Part V of the EP Act and by the Mining Act 1978 (Mining Act) as well as several other regulatory instruments. Primary and other key approvals are discussed in Section 17.

Environmental Compliance

The Project has not incurred any significant environmental incidents (EPA, 2020). Reportable incidents in the 2018-2019 AER period totaled 85 incidents and consist primarily of spills (44), followed by water or tailings incidents (18), flora and fauna incidents (16) and dust incidents (11). Complaints comprised four complaints for noise and blasting, one dust complaint, one light complaint, and one odor complaint.


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The Project is responsible for contamination of five sites due to hydrocarbons and metals in soil, and elevated concentrations of metals in groundwater and surface water (Site IDs 34013, 73571, 73572, 75019, and 75017). These sites are classified as “Contaminated – Restricted use” and only permit commercial and industrial uses. This will need to be reviewed for final land use options for closure.

Local Individuals and Groups

The mining tenure for the Project was granted in 1984 and, therefore, is not a future act as defined under the Native Title Act 1993 (a 'future act' is an act done after the January 1, 1994, which affects Native Title). The Project is, therefore, not required to have obtained agreements with the local native title claimant groups.

The Project lies immediately south of the town of Greenbushes and maintains an active stakeholder engagement program and information sessions to groups such as the “Grow Greenbushes.” Senior mine management resides in the town. Talison promotes local education (the Greenbushes Primary School and tertiary sponsorships) and provides support community groups with money and services (allocated in the Environmental and Community budget).

Talison has two agreements in place with local groups:

•Blackwood Basin Group (BBG) Incorporated – offset management agreement whereby BBG have agreed to manage and improve the condition of native vegetation for the purpose of the Black Cockatoo offset requirements.

•Tonebridge Grazing Pty Ltd. – site conservation agreement for the protection and improvement of native vegetation to protect Black Cockatoo habitat.

Mine Closure

Talison has a mine closure plan submitted and approved by DMIRS on 23 February 2017, with their costs updated in October 2016.

Western Australia does not require a company to post performance or reclamation bonds. All tenement holders in Western Australia are required to annually report disturbance and to make contributions to a pooled fund based on the type and extent of disturbance under the Mining Rehabilitation Fund Act 2012 (MRF Act). The pooled fund can be used by the Department of Mines, Industry Regulation and Safety (DMIRS) to rehabilitate mines where the tenement holder/operator has failed to meet their rehabilitation obligations and finances have not been able to be recovered. The interest earned on the pooled fund is used for administration and to rehabilitate legacy abandoned mine sites.

A cost estimate for immediate (unplanned) closure of Greenbushes has been prepared by Talison using the Victorian Government Rehabilitation bond calculator (dpi-bond-calculator-24-feb-2011) as a template to assist them in identifying and costing the rehabilitation, decommissioning and monitoring requirements for the Greenbushes site. The Victorian Government bond calculator uses predefined third-party unit rates based on the typical current market ‘third party rates’ as of July 2010, which may overestimate or underestimate closure costs for Western Australia. Talison has been escalating these unit rates since 2013.

The latest version of closure cost estimate available for review was the 2019 draft estimate. It only includes the facilities that were on site at that time and does not include any future expansions. Changes to the site during 2020 and any future plans are not included. This closure cost estimate


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totals AU$37,232,334 for Talison’s portion of the operation. GAM is responsible for closure for the remainder of the site,

The Victorian Government model used by Talison to estimate closure costs was designed in 2011 using 2010 rates. It does not use site specific rates as is good industry practice. There is no documentation on the basis of the unit rates used in the Victorian model and the government of Victoria was unable to provide any information regarding the accuracy of the rates. Because of this, SRK cannot validate any of the unit rates used in the model or the overall cost estimate.

Furthermore, because closure of the site is not expected until 2056, the closure cost estimate represents future costs based on current site conditions. In all probability, site conditions at closure will be different than currently expected and, therefore, the current estimate of closure costs is unlikely to reflect the actual closure cost that will be incurred in the future.

Currently, the site must treat mine water collecting in the Southampton and Cowan Brook Dams prior to discharge due to elevated levels of arsenic and lithium in the water. The sources of elevated lithium and arsenic in the mine water circuit include dewatering water from the pit. However, there has been no study to determine if water that will eventually collect in the pit or from any other point source and discharge will meet discharge water quality standards. Therefore, no assessment of the probability that post-closure water management or water treatment has been performed.

Additionally, contaminated seepage from TSF2 has recently been observed in the alluvial aquifer and is now being collected via French drains constructed along the toe of the embankment and conveyed to the water treatment plant. At this time, no studies have been conducted to determine the cause of the current seepage, the likelihood and duration of continued seepage, or the possibility that additional seepage could occur from the other TSF facilities.

If perpetual, or even long-term, treatment of water is required to comply with discharge requirements, the closure cost estimate provided by Talison could be materially deficient.

1.10Summary Capital and Operating Cost Estimates

Capital cost forecasts were developed in Australian dollars. The cost associated with the sustaining capital at the operation are presented in Figure 1-2. The total sustaining capital spend over life of mine is forecast at US$374M.


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Source: SRK

Figure 1-2: Sustaining Capital Profile (Tabular data in Table 19-12)

Operating costs were forecast in Australian dollars and are categorized as mining, processing and SG&A costs. Mining costs include the costs to move the ore and waste material to waste dumps, stockpiles or plant feed locations. Processing costs include the costs to process the ore into a concentrate. SG&A costs include the general and administrative costs of running the operation and the selling expenses associated with the concentrate product. A summary of the life of mine average for mining, processing and SG&A costs is presented in Table 1-3.

Table 1-3: Life of Mine Operating Cost Averages


Category	Unit	Value
Mining Cost	US$/t mined	5.30
Processing Cost	US$/t processed	17.86
SG&A Cost	US$/t concentrate	59.71

Source: SRK, 2020

These costs are typically broken out into fixed and variable costs. A life of mine summary of the operating cost breakdown is presented in Figure 1-3 and Figure 1-4.

Source: SRK, 2020

Figure 1-3: Life of Mine Operating Cost Profile (Tabular data in Table 19-12)


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Source: SRK

Figure 1-4: Life of Mine Operating Cost Summary

1.11Economics

Economic analysis, including estimation of capital and operating costs is inherently a forward-looking exercise. These estimates rely upon a range of assumptions and forecasts that are subject to change depending upon macroeconomic conditions, operating strategy and new data collected through future operations and therefore actual economic outcomes often deviate significantly from forecasts.

The economic analysis metrics are prepared on annual after tax basis in US$. The results of the analysis are presented in Table 1-4. The results indicate that, at a CIF China chemical grade concentrate price of US$650/t, the operation returns an after-tax NPV@8% of US$3.2B (US$1.6B attributable to Albemarle). Note, that because the mine is in operation and is valued on a total project basis with prior costs treated as sunk, IRR and payback period analysis are not relevant metrics.


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Table 1-4: Indicative Economic Results (Albemarle)


LoM Cash Flow (Unfinanced)	Units	Value
Total Revenue	US$M	10,287
Total Opex	US$M	(3,744)
Operating Margin	US$M	6,542
Operating Margin Ratio	%	64%
Taxes Paid	US$M	(1,743)
Free Cashflow	US$M	3,977
Before Tax
Free Cash Flow	US$M	5,720
NPV @ 8%	US$M	2,198
After Tax
Free Cash Flow	US$M	3,977
NPV @ 8%	US$M	1,562

Source: SRK

A summary of the cashflow on an annual basis is presented in Figure 1-5.

Source: SRK

Figure 1-5: Annual Cashflow Summary (Tabular data in Table 19-12)

1.12Conclusions and Recommendations

1.12.1Property Description and Ownership

The property is well known in terms of descriptive factors and ownership, and there are no additional recommendations at this time.

1.12.2Geology and Mineralization

Geology and mineralization are well understood through decades of active mining, and there are no additional recommendations at this time.

1.12.3Status of Exploration, Development and Operations

The status of exploration, development, and operations is very advanced and active. Assuming that exploration and mining continue at Greenbushes in the way that they are currently being done, there are no additional recommendations at this time.


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1.12.4Mineral Resource

SRK has reported a mineral resource estimation which is appropriate for public disclosure and long term considerations of mining viability. The mineral resource estimation could be improved with additional confidence in development of a detailed structural model to support geotechnical or localized oxidation effects on the deposit, but SRK notes that brittle structure is not critical to reporting of global resources for Greenbushes. In addition, SRK recommends integrating more detailed geological data (such as blast holes and additional pit mapping) into the process, perhaps just supporting smaller scale detailed geological models for short-range planning. This is already active at the operating mine but could potentially be integrated back into the long term resource work to enhance confidence in certain areas.

1.12.5Reserves and Mining Methods

SRK has reported mineral reserves that are appropriate for public disclosure. The mine plan, which is based on the mineral reserves, spans approximately 32 years (or approximately 38 years when including the processing of low-grade stockpiles at the end of the mine life). Annual material movement requirements are reasonable, with a peak annual material movement of approximately 24 Mt. Over the life of the project, approximately 458 Mt of waste will be mined from the open pit. A feasible waste dump design exists to accommodate the LoM waste quantity; however, a portion of the footprint of the designed waste dump extends over the highly prospective Kapanga lithium deposit. SRK recommends that Greenbushes review its waste dump design to determine whether it will be possible to move the waste dump design to a location other than the area over the Kapanga deposit. The reserves processed at CGP2 assumes that the current ramp up issues with lower recovery will be solved by applying additional capital to the plant. If expected recoveries are not realized, less concentrate will be produced.

1.12.6Processing and Recovery Methods

A comparison of the CGP1 yield model with actual CGP1 plant performance shows that the CGP1 yield model is generally a good predictor of CGP1 plant performance. However, a comparison of the CGP2 yield model with actual CGP2 plant performance during commissioning shows that CGP2 has significantly underperformed the CGP2 yield model.

During 2021 (May-September), CGP2 processed 847,058 t of ore at an average grade of 2.00% Li2O and recovered 51.0% of the lithium (versus a predicted recovery of 75.0%) into 145,230 t of concentrate at an average grade of 5.94% Li2O and 1.01% Fe2O3. Concentrate yield for this period averaged 17.2% versus the model yield projection of 25.0%. Although, product quality specifications were generally achieved, lithium recovery and concentrate yield have continued to be substantially below target.

Greenbushes metallurgical staff have developed a new yield equation for CGP2 based on actual performance during the period 2019 to 2021. For purposes of financial modeling SRK has assumed that this updated yield equation will represent CGP2 production during the period 2023 to 2024 while Greenbushes works to resolve process issues related to CGP2. SRK assumes that these process issues will be resolved by Q1 2025 and from that point on CGP2 yield will be represented by the yield equation that has been established for CGP1. SRK notes that that CGP2 and CGP1 flowsheets for are similar and both plants process ore from the same mining operation, as such, SRK believes that it is reasonable to expect that CGP2 will eventually achieve design product targets but cautions


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that at this point design performance of CGP2 remains to be demonstrated and has not yet been confirmed.

Greenbushes has retained MinSol to undertake a performance assessment of CGP2 in November 2021 to provide a baseline for the current plant operating conditions versus design and to provide recommendations to optimize CGP2 performance with respect to concentrate grade and recovery

1.12.7Infrastructure

The infrastructure at Greenbushes is installed and functional. Expansion projects have been identified and are at the appropriate level of design depending on their expected timing of the future expansion. Tailings and waste rock are flagged as risks due to the potential for future expansion and location of future resources that are in development. SRK recommends a detailed review of long term storage options for both tailings and waste rock will allow timely planning and identification of alternative storage options for future accelerated expansion if needed.

1.12.8Environmental Studies, Permitting, and Plans, Negotiations, or Agreements with Local Individuals or Groups

During development and subsequent modifications to the mine, environmental studies and impact assessments have been completed to support project approval applications. Many of these studies are currently being updated as part of the current expansion efforts; as such, the most up-to-date information was not readily available. Some of the key findings from previous studies include:

•No Threatened Ecological Communities, Priority Ecological Communities or threatened flora have been reported in the vicinity of the mine site.

•There have been seven conservation significant fauna species recorded in the mine development area.

•Surface water drains through tributaries of the Blackwood River which is registered as a significant Aboriginal site that must be protected under the Aboriginal Heritage Act 1972.

•Groundwater is not a resource in the local area due to the low permeability of the basement rock.

•Earlier studies indicated that the pits would overflow approximately 300 years after mine closure; however, more recent modelling suggests that water levels will stabilize in approximately 500 to 900 years and remain 20 m below the pit rims (i.e., no overflow).

•Background groundwater quality data are limited due to a lack of monitoring wells upgradient of the mine, and as monitoring wells are located close to the TSFs and/or in the historically dredged channels; some of these wells have been impacted by seepage and are under investigation and remediation efforts.

•Waste rock is not typically acid generating, though some potentially acid generating (PAG) granofels (metasediments) do occur in the footwall of the orebody. Significant acid neutralizing capacity (ANC) has been shown to exist in waste rock and pit walls.

•Studies into the potential for radionuclides has consistently returned results that are below trigger values.


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•There are no other cultural sites listed within the mining development area.

The Project operates under approvals that contain conditions for environmental management that include waste and tailings disposal, site monitoring, and water management. The Project has not incurred any significant environmental incidents (EPA, 2021).

There has been no predictive modeling of the pit lake quality as far as SRK is aware, and this is recommended to inform closure management strategies. There is potential for site water management to be required post-closure until seepage from TSF2 attenuates.

The Project has contaminated five sites listed which encompass the entire mine area due to known or suspected contaminated site due to hydrocarbons and metals in soil, and elevated concentrations of metals in groundwater and surface water. These sites are classified as “Contaminated – Restricted use” and only permit commercial and industrial uses. This will need to be reviewed for final land use options for closure.

Talison has agreements in place with two local groups.

Although Greenbushes has a closure plan prepared in accordance with applicable regulations, this plan should be updated to include all closure activities necessary to properly closure all of the project facilities that are part of the current mine plan including future expansions and facilities. This update should be prepared in accordance with applicable regulatory requirements and commitments included in the approved closure plan. It should also be prepared in sufficient detail that a proper PFS-level closure cost estimate can be prepared.

1.12.9Summary Capital and Operating Cost Estimates

Greenbushes cost forecasts are based on mature mine budgets that have historical accounting data to support the cost basis and forward looking mine plans as a basis for future operating costs as well as forward looking capital estimates based on engineered estimates for expansion capital and historically driven sustaining capital costs. Forecast costs assumes a constant exchange rate which benefits the current cost structure. In SRK’s opinion, the estimates are reasonable in the context of the current reserve and mine plan.

1.12.10Economics

The operation is forecast to generate positive cashflow over the life of the reserves, based on the assumptions detailed in this report. This estimated cashflow is inherently forward-looking and dependent upon numerous assumptions and forecasts, such as macroeconomic conditions, mine plans and operating strategy, that are subject to change.

As modeled for this analysis, the operation is forecast to produce 32.3Mt of spodumene concentrate to be sold at a CIF price of US$650/t. This yields an after-tax project NPV@ 8% of US$3.2B, of which, US$1.6B is attributable to Albemarle.

The analysis performed for this report indicates that the operation’s NPV is most sensitive to variations in the grade of ore mined, the commodity price received and plant performance.


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2Introduction

This Technical Report Summary was prepared in accordance with the Securities and Exchange Commission (SEC) S-K regulations (Title 17, Part 229, Items 601 and 1300 through 1305) for Albemarle Corporation (Albemarle) by SRK Consulting (U.S.), Inc. (SRK) on the Greenbushes Mine (Greenbushes). Greenbushes is held within the operating entity, Talison Lithium Australia Pty Ltd (Talison), of which Albemarle is a 49% owner with the remaining 51% ownership controlled by Tianqi/IGO JV.

2.1Terms of Reference and Purpose of the Report

The quality of information, conclusions, and estimates contained herein are consistent with the level of effort involved in SRK’s services, based on: i) information available at the time of preparation and ii) the assumptions, conditions, and qualifications set forth in this report. This report is intended for use by Albemarle subject to the terms and conditions of its contract with SRK and relevant securities legislation. The contract permits Albemarle to file this report as a Technical Report Summary with American securities regulatory authorities pursuant to the SEC S-K regulations, more specifically Title 17, Subpart 229.600, item 601(b)(96) - Technical Report Summary and Title 17, Subpart 229.1300 - Disclosure by Registrants Engaged in Mining Operations. Any other uses of this report by any third party are at that party’s sole risk. The responsibility for this disclosure remains with Albemarle.

The Greenbushes facilities produce a range of spodumene concentrate products that are sold into technical and chemical lithium markets. However, for the purposes of developing the reserve estimate herein, SRK has based its economic analysis on the sale of only chemical grade spodumene concentrate. This is because Talison’s ability to predict lithium production for technical grade product at a level that meets the standard of uncertainty for a reserve requires grade control drilling. Therefore, instead of assuming sale of technical grade concentrates, SRK has assumed that all product is sold into chemical markets. In SRK’s opinion, from a geological standpoint this is a reasonable assumption as any material that is appropriate to feed technical grade production can also be used for chemical grade feed. Further, again in SRK’s opinion, it is reasonable (and somewhat conservative) from an economic standpoint as the weighted average price Talison has historically received for technical grade concentrates is higher than the average price for chemical grade concentrate (i.e. assuming receipt of chemical grade revenue likely understates the value of production that would typically go to technical grade markets).

Greenbushes has developed and installed a Tailings Reprocessing Plant (TRP) to reprocess tailings from Tailings Storage Area 1 (TSF1). In SRK’s opinion, due to the high level of inherent variability in mineral contained in a tailings storage facility, establishing geological, processing and production data to adequately meet the standard of uncertainty required to support an estimate of reserves is difficult. Further, the quantify of potential production from TSF1 is minimal in the context of the overall Greenbushes reserve. Therefore, the potential spodumene concentrate production from the reprocessing effort has not been included in the reserve estimate.

Greenbushes has developed cost estimates and designs for the expansion of chemical grade spodumene production capacity. These expansion plans are in the form of chemical grade plants three and four (CGP3 and CGP4). Although the engineering work has progressed significantly, there is substantial uncertainty at the time of writing this report on the timing and whether the facilities will


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be placed in service. Therefore, SRK has not included the development of CGP3 and CGP4 in its analysis to support the reserve estimate and has limited the reserves estimate to production from the constructed facilities (CGP1, CGP2, and the equivalent Technical Grade Plant (TGP) production of chemical grade product). SRK’s exclusion of CGP3 and CGP4 does not reflect any opinion on the technical or economic viability of these facilities but is simply due to uncertainty around their timing and development.

Further discussion and reference information for completeness on the TGP, TRP and CGP3/CGP4 is provided in Chapter 21.

The purpose of this Technical Report Summary is to report mineral resources and mineral reserves.

The effective date of this report is June 30, 2021.

The report was amended to include additional clarifying information in December 2022. The basis of the report is unchanged. The changes and location in document are summarized as follows:

•Amended date added to title page

•Tabular data referenced in figures (Ch 1.1, 1.11, 18.1, 18.1.1, 18.1.2, 19.1.3, 19.1.4, 19.2)

•A simplified stratigraphic column of the geologic units (Chapter 6.2)

•QP Statement on metallurgy (Chapter 10.1)

•Clarification on pit optimisation assumptions (Chapter 12.1.2)

•Clarification on the variances between the assumptions used in the cut-off grade estimates, and the final economic analysis (Chapter 12.2.3)

•Additional information on plant yield (Chapter 14.4, 14.5, 14.6, 14.7)

•QP statement on process basis and yield (Chapter 14.8)

•Addition of historic price curves (Chapter 16.1.4)

•Table typography corrections (Chapter 18)

•Modified Summary Table for clarity (Chapter 19.2)

2.2Sources of Information

This report is based in part on internal Company technical reports, previous feasibility studies, maps, published government reports, Company letters and memoranda, and public information as cited throughout this report and listed in the References Section 24.

Reliance upon information provided by the registrant is listed in the Section 25 when applicable.

2.3Details of Inspection

Table 2-1 summarizes the details of the personal inspections on the property by each qualified person or, if applicable, the reason why a personal inspection has not been completed.


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Table 2-1: Site Visits


Expertise	Date(s) of Visit	Details of Inspection	Reason Why a Personal Inspection Has Not Been Completed
Environmental/ Closure	August 19-20, 2020	Day 1: Site overview presentation with Craig Dawson (General Manager – Operations) and meeting with Site Environmental Team. Proceeded to Cornwall Pit, which is currently used for water capture, followed on to C1/C2/C3 Open pit lookout, inspection of the progressive rehabilitation at Floyds WRL, Tailings retreatment plant and finished with a tour of the technical and chemical grade processing plants. Day 2: Inspection of the rehabilitation at TSF3, then to the seepage collection point just below Tin Shed Dam. Inspection of the buttress at TSF 2 and corresponding rehab of buttress, together with the new under drainage on the west side of TSF 2 to capture seepage. Visited Cowen Brook Dam. Overview of the WTP to be commissioned in September 2020 and visit o the storage dams Clearwater, Austins and Southhampton. Finished the tour with a visit to the 3 year old rehab to the west of Maranup Ford Road.
Other Areas			Site Visit not completed due to Covid-19 travel restrictions

2.4Report Version Update

The user of this document should ensure that this is the most recent Technical Report Summary for the property.

This Technical Report Summary is not an update of a previously filed Technical Report Summary.

2.5Qualified Person

This report was prepared by SRK Consulting (U.S.), Inc., a third-party firm comprising mining experts in accordance with § 229.1302(b)(1). Albemarle has determined that SRK meets the qualifications specified under the definition of qualified person in § 229.1300. References to the Qualified Person or QP in this report are references to SRK Consulting (U.S.), Inc. and not to any individual employed at SRK.


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3Property Description

The Greenbushes property is a large mining operation located in Western Australia extracting lithium and tantalum products from a pegmatite orebody. Historically, the operation also produced tin. Active mining of tin began in 1888, with tantalum production commencing in 1942, and lithium production beginning in 1983. In addition to being the longest continuously operated mine in Western Australia, the Greenbushes pegmatite is one of the largest known spodumene pegmatite resources in the world.

3.1Property Location

Greenbushes is located directly south of and immediately adjacent to the town of Greenbushes approximately 250 kilometers (km) south of Perth, at latitude 33° 52´S and longitude 116° 04´ E, and 90 km south-east of the Port of Bunbury, a major bulk handling port in the southwest of Western Australia (WA). It is situated approximately 300 meters (m) above mean sea level (AMSL).


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Source: Talison, 2018

Figure 3-1: General Location Map, Greenbushes Mine


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Source: Talison, 2018

Figure 3-2: Greenbushes Regional Location Map


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3.2Property Area

The Greenbushes property area is approximately 2,000 ha, which is a smaller subset of a larger 10,067 ha land package controlled by Talison. A general layout of the operating property utilizing a 2017 aerial photo is shown in Figure 3-3, along with drilling collars used for exploration of the primary pegmatite bodies discussed herein. Mineralized pegmatites occur over the property area, generally trending north – south.

Source: SRK, 2018

Figure 3-3: Property Area


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3.3Mineral Title

Talison holds 10,067 Ha of mineral tenements which cover the Greenbushes area and surrounding exploration areas. As noted in Table 3-1, some types of title are noted as general purpose leases, while others are discrete mining leases. Active mining and exploration is completely contained within mining leases or other licenses as appropriate. SRK notes that the entirety of the mineral resources and mineral reserves disclosed herein are contained within titles 100% controlled by Talison and summarized in Table 3-1. The layout of the relevant property boundaries is shown in Figure 3-4.

Table 3-1: Land Tenure Table

Claim
ID

Owner(s)

As Reported
Type

Status

Date
Granted

Expiry
Date

Source As
Of Date

Area
(Ha)

G 01/1

Talison Lithium
Australia Pty Ltd

General
Purpose Lease

Active/
Granted

11/14/1986

6/5/2028

11/30/2020

G 01/2

Talison Lithium
Australia Pty Ltd

General
Purpose Lease

Active/
Granted

11/14/1986

6/5/2028

11/30/2020

L 01/1

Talison Lithium
Australia Pty Ltd

Miscellaneous
License

Active/
Granted

3/19/1986

12/27/2026

11/30/2020

M 01/6

Talison Lithium
Australia Pty Ltd

Mining Lease

Active/
Granted

12/28/1984

12/27/2026

11/30/2020

985

M 01/5

Talison Lithium
Australia Pty Ltd

Mining Lease

Active/
Granted

12/28/1984

12/27/2026

11/30/2020

999

M 70/765

Talison Lithium
Australia Pty Ltd

Mining Lease

Active/
Granted

6/15/1994

6/19/2036

11/30/2020

M 01/3

Talison Lithium
Australia Pty Ltd

Mining Lease

Active/
Granted

12/28/1984

12/27/2026

11/30/2020

1,000

M 01/7

Talison Lithium
Australia Pty Ltd

Mining Lease

Active/
Granted

12/28/1984

12/27/2026

11/30/2020

998

M 01/4

Talison Lithium
Australia Pty Ltd

Mining Lease

Active/
Granted

12/28/1984

12/27/2026

11/30/2020

999

M 01/8

Talison Lithium
Australia Pty Ltd

Mining Lease

Active/
Granted

12/28/1984

12/27/2026

11/30/2020

999

M 01/10

Talison Lithium
Australia Pty Ltd

Mining Lease

Active/
Granted

12/28/1984

12/27/2026

11/30/2020

1,000

M 01/11

Talison Lithium
Australia Pty Ltd

Mining Lease

Active/
Granted

12/28/1984

12/27/2026

11/30/2020

999

M 01/16

Talison Lithium
Australia Pty Ltd

Mining Lease

Active/
Granted

6/3/1986

6/5/2028

11/30/2020

M 01/9

Talison Lithium
Australia Pty Ltd

Mining Lease

Active/
Granted

12/28/1984

12/27/2026

11/30/2020

997

M 01/18

Talison Lithium
Australia Pty Ltd

Mining Lease

Active/
Granted

9/16/1994

9/27/2036

11/30/2020

M 01/2

Talison Lithium
Australia Pty Ltd

Mining Lease

Active/
Granted

12/28/1984

12/27/2026

11/30/2020

969

Source: Department of Mines and Petroleum (W. Australia), 2020


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Source: Talison, 2020

Note: Generalized Greenbushes operations area shown in red box.

Figure 3-4: Greenbushes Land Tenure Map


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Mining leases entitle the tenement holder to work and mine the land. The operating mine and processing plant area covers a total area of about 3,500 Ha and generally sits on mining leases M01/06, M01/07 and M01/16. Talison holds the mining rights for all lithium minerals on these tenements, while Global Advanced Metals (GAM) holds the mining rights to all minerals other than lithium through a reserved mineral rights agreement dated November 13, 2009. Currently, the only mineral extracted at Greenbushes is lithium although there are also facilities on site for processing tantalum that are on care and maintenance.

All tenements are registered with the mining registrars located in the State of WA. They have been surveyed and constituted under the Mining Act 1978 (WA) (BDA, 2012). Talison continues to review and renew all tenements on an annual basis and ensures compliance with relevant regulatory requirements and fees for maintenance of these tenements.

3.4Encumbrances

SRK is not aware of any material encumbrances that would impact the current resource or reserve disclosure as presented herein. Infrastructure movement or modifications which could be related to further expansion or development of the current mineral resource or mineral reserve are detailed in section 15 of this report.

3.5Royalties or Similar Interest

In WA, a royalty of 5% of the royalty value of lithium concentrate sales is payable for lithium mineral production as prescribed under the Mining Act. The royalty value is the difference between the gross invoice value of the sale and the allowable deductions on the sale. The gross invoice value of the sale is the Australian dollar value obtained by multiplying the amount of the mineral sold by the price of the mineral as shown in the invoice. Allowable deductions are any costs in Australian dollars incurred for transport of the mineral quantity by the seller after the shipment date. For minerals exported from Australia, the shipment date is deemed to be the date on which the ship or aircraft transporting the minerals first leaves port in WA (BDA, 2012).

3.6Other Significant Factors and Risks

SRK is not aware of any other significant factors or risk that may affect access, title, or the right or ability to perform work on the property.


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4Accessibility, Climate, Local Resources, Infrastructure and Physiography

4.1Topography, Elevation and Vegetation

Excerpted from BDA, 2012.

The Greenbushes site is situated approximately 300 m AMSL. The operations area lies on the Darling Plateau and is dominated by a broad ridgeline which runs from the Greenbushes township (310 m) towards the south-east (270 m) with the open pits located along this ridgeline (300 m). The current operating waste rock dump is located on an east facing hill slope which descends to 266 m and adjoins the South Western Highway, while the process plant area is located on the west facing hill slope which descends to 245m. The tailings storage areas are located south of the mining and plant areas at 265 m.

4.2Means of Access

Access to the property is via the paved major South Western Highway between Bunbury and Bridgetown to the Greenbushes Township, and via Maranup Ford Road to the mine. A major international airport is located in Perth, WA, approximately 250 km north of the mine area (BDA, 2012).

4.3Climate and Length of Operating Season

Excerpted from BDA, 2012.

The Greenbushes area has a temperate climate that is described as mild Mediterranean, with distinct summer and winter seasons. The mean minimum temperatures range from 4°C to 12°C, while the mean maximum temperatures range from 16°C to 30°C. The hottest month is January (mean maximum temperature 30ºC), while the coldest month is August (mean minimum temperature 4ºC). There is a distinct rainfall pattern for winter, with most of the rain occurring between May and October. The area averages about 970 mm per annum with a range of about 610 mm to 1,680 mm per annum. The evaporation rate for the area is calculated at approximately 1,190 mm per annum. The area is surrounded by vegetation broadly described as open Jarrah/Marri forest with a comparatively open understorey.

Mining and processing operations at Greenbushes operate throughout the year.

4.4Infrastructure Availability and Sources

4.4.1Water

Water is currently supplied from developed surface water impoundments for capture of precipitation runoff, pumping from sumps within the mining excavations and recycled from multiple TSFs. No mine water is sourced directly from groundwater aquifers through production or dewatering wells. The majority of these water sources and impoundments are linked through constructed surface pumps and conveyance.


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4.4.2Electricity

Power is provided by utility line power from existing Western Power transmission that runs along the east side of the deposit. 22kV transmission lines feed off the Western power transmission line from both the north and south to form a loop configuration. The 22 kV transmission then feeds local power distribution to the various loads on the project.

4.4.3Personnel

4.4.4Supplies

Supplies are readily available from established vendors and services from the local communities and from the regional capital Perth located 250 km to the north.


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5History

Mining in the Greenbushes area has continued almost uninterrupted since tin was first discovered at Greenbushes in 1886. Greenbushes is recognized as the longest continuously operated mine in WA (BDA, 2012).

5.1Previous Operations

Excerpted from BDA, 2012.

5.1.1Tin

Since it was first discovered at Greenbushes in 1886, tin has been mined almost continuously in the Greenbushes area, although in more recent times lower tin prices and the emergence of lithium and tantalum as major revenue earners have relegated tin to the position of a by-product. Tin was first mined at Greenbushes by the Bunbury Tin Mining Co in 1888. However, there was a gradual decline in tin production between 1914 and 1930. Vultan Mines carried out sluicing operations of the weathered tin oxides between 1935 and 1943, while between 1945 and 1956 modern earth moving equipment was introduced and tin dredging commenced. Greenbushes Tin NL was formed in 1964 and open cut mining of the softer oxidized rock commenced in 1969.

5.1.2Tantalum

Tantalum mining at Greenbushes commenced in the 1940s with the advancement in electronics. Tantalum hard-rock operations started in 1992 with an ore processing capacity of 800,000 t/y. By the late 1990s demand for tantalum reached all-time highs and the existing high grade Cornwall Pit was nearing completion. In order to meet increasing demand a decision was made to expand the mill capacity to 4 Mt/y and develop an underground mine, to provide higher grade ore for blending with the lower grade ore from the Central Lode pits. An underground operation was commenced at the base of the Cornwall Pit in April 2001 to access high grade ore prior to the completion of the available open pit high-grade resource.

In 2002, the tantalum market collapsed due to a slow-down in the electronics industry and subsequently the underground operation was placed on care and maintenance. The underground operation was restarted in 2004 due to increased demand but again placed on care and maintenance the following year. The lithium open pit operation has continued throughout recent times and mining is now focused on the Central Lode zone. Only lithium minerals are currently mined from the open pits. The tantalum mining operation and processing plants have been on care and maintenance since 2005.

5.1.3Lithium Minerals

The mining of lithium minerals is a relatively recent event in the history of mining at Greenbushes with Greenbushes Limited commencing production of lithium minerals in 1983 and commissioned at 30,000 t/y lithium mineral concentrator two years later in 1984 and 1985. The lithium assets were acquired by Lithium Australia Ltd in 1987 and Sons of Gwalia in 1989. Production capacity was increased to 100,000 t/y of lithium concentrate in the early 1990s and to 150,000 t/y of lithium concentrate by 1997, which included the capacity to produce a lithium concentrate for the lithium chemical converter market.


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The Talison Minerals Group was incorporated in 2007 for the purpose of acquiring the assets of the Advanced Minerals Division of Sons of Gwalia by a consortium of US private equity companies led by Resource Capital Funds. The Talison Mineral Group’s assets included the Wodgina tantalum mine located about 1,500 km north of Perth and 120 km south of Port Hedland in the Pilbara region of WA as well as the Greenbushes Lithium Operations. Upon completion of the reorganization of the Talison Minerals Group in 2010, Talison acquired the Greenbushes Lithium Operations, and the remainder of the assets were acquired by GAM.

There are two lithium processing plants that recover and upgrade the spodumene mineral using gravity, heavy media, flotation and magnetic processes into a range of products for bulk or bagged shipment. In the period of 2005 to 2008, demand from the Chinese chemical producers was satisfied by using the Greenbushes primary tantalum plant which had been on care and maintenance. Products from that plant had a lower grade than preferred by the Chinese customers and were supplied as a temporary measure until Talison’s lithium concentrate production capacity was increased.

In 2009, Talison’s processing plants were upgraded to total nominal capacity of approximately 260,000 t/y of lithium concentrates and in late 2010 capacity was increased to 700,000 t/y of ore feed yielding approximately 315,000 t/y of lithium concentrates.

5.2Exploration and Development of Previous Owners or Operators

As noted above, the Greenbushes Mine is the longest continuously operating mine in WA and features an extensive exploration and operational history. Exploration work was conducted by previous owners and operators through the various commodities focuses as described in Section 5.1, including drilling (rotary, reverse circulation, and diamond core), surface sampling, geological mapping, trenching, geophysics.

Development work has generally included construction activities related to both open-pit and underground mining, as well as waste dumps, tailings facilities, surface water management infrastructure and more.


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6Geological Setting, Mineralization, and Deposit

6.1Regional Geology

As stated by G. A. Partington (1990), the Greenbushes pegmatite in WA is intruded into rocks of the Balingup Metamorphic Belt (BMB), which is part of the Southwest Gneiss Terranes of the Yilgarn Craton. The Greenbushes pegmatite lies within, and is geometrically controlled by, the Donnybrook-Bridgetown Shear Zone. It appears to have been emplaced during the orogeny as is evidenced by the fine grain size and internal deformation. The pegmatites are believed to be Archaean in age and are dated at approximately 2,525 million years (Ma). Pegmatites are hosted by a 15 to 20 km wide, north to north-west trending sequence of sheared gneiss, orthogneiss, amphibolite and migmatite which outcrop along the trace of the lineament. A series of syn-tectonic granitoid intrusives occur within the BMB, elongated along the Donnybrook-Bridgetown Shear Zone. The pegmatites have been further affected by subsequent deformation and/or hydrothermal recrystallization, the last episode dated at around 1,100 Ma. Figure 6-1 shows the regional geology.


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Source: Talison Lithium Limited

Figure 6-1: Regional Geology Map


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6.2Local Geology

The Greenbushes pegmatite deposit consists of a primary pegmatite intrusion with numerous smaller, generally linear pegmatite dikes and pods to the east. The primary intrusion and its subsidiary dikes and pods are concentrated within shear zones on the boundaries of granofels, ultramafic schists and amphibolites. The pegmatites are crosscut by ferrous-rich, mafic dolerite which is of paramount importance to the current mining methods. The pegmatite body is over 3 km long (north by northwest), up to 300 m wide (normal to dip), strikes north to north-west and dips moderately to steeply west to south-west. The syn-tectonic development of the pegmatite has given rise to mylonitic fabrics, particularly along host rock contacts.

The Greenbushes pegmatite is mineralogically segregated into five primary zones. Internally, the Greenbushes pegmatite consists of the Contact Zone, Potassium Feldspar (Potassium) Zone, Albite (Sodium) Zone, Mixed Zone and Spodumene (Lithium) Zone. The zones differ from many other rare-metal pegmatites in that they do not appear concentric, but are lenticular in nature, with inter-fingering along strike and down dip. They do not have a quartz core. The mine sequence was later subjected to the transgressive east-west dike and conformable sill dolerite intrusions.

The highest concentrations of primary ore minerals are found in specific mineralogical zones or assemblages within the pegmatite. The high-grade lodes within the main pegmatite body exhibit variable dips from 80 to 20° towards the west and south-west. Tantalum (tantalite) and tin (cassiterite) mineralization is concentrated in the Sodium Zone which is characterized by albite (Na-plagioclase), tourmaline and mica (muscovite). The Lithium Zone is enriched in the lithium bearing silicate spodumene. The mixed zone contains lower concentrations of tantalum and lithium. The final major zone is the potassium feldspar microcline which is not as economically important.

The predominant rock units on the Greenbushes property are a package of Archean amphibolite and metasediments above the basement Bridgetown Gneiss. Locally, this is present as the Hanging wall Amphibolite and Footwall Granofels. Numerous Archean granitoid intrusions are present, all of which are cut by the Donnybrook-Bridgetown Shear zone represented onsite as the roughly N – S trending shear-zone gneiss. Pegmatite intrusions which host Li mineralization have intruded this package of Archean rocks. Post-mineralization dolerite dykes intrude older units, dated at approximately 1.1 Ga. Lastly, recent cover material of lateritic conglomerates, older alluvium, and recent alluvium are present as shallow cover. A simplified stratigraphic column is presented in Figure 6-2. Weathering and erosion of the pegmatites has produced adjacent alluvial deposits in ancient drainage systems. These are generally enriched in cassiterite. All rocks have been extensively lateritized during Tertiary peneplain formation; the laterite profile locally reaches depths in excess of 40 m below the original surface.

The C3 Pit shown in Figure 6-3 contains the main lithium deposit. The lithium ore deposit occurs within a large (250 m wide) lithium enriched pegmatite. Spodumene in the Lithium ore zone can make up more than 50% of the rock with the remainder being largely quartz. Toward the northern end of C3 pit, a highly felspathic (K-feldspar) zone separates the high-grade lithium zone from the hanging wall amphibolite and the dolerite sill. Tantalum/tin and lithium ore body mineralization are conformable with the trends of the pegmatites both along strike and down dip.

Between C3 and C1 is the mining area referred to as C2. The pegmatite in this area dips approximately 40° west and has an intermediate composition with moderate lithium oxide Li2O values and moderate tantalum pentoxide (Ta2O5) values. This is in contrast to C1 and C3 which have large distinct zones of separate Li2O and Ta2O5 high grade.


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At the southern end of the Central Lode pits is the C1 pit area. It contains the next largest concentration of high grade spodumene lithium mineralization after C3. The eastern footwall contact in the south of the C1 area dips 35 degrees west steepening toward the north and with depth. The internal grade domains in C1 parallel the eastern footwall contact. The immediate footwall is enriched in tantalum with typical accessory minerals tourmaline and apatite visible. Above are zones of lithium mineralization crosscut by deep weathering near surface altering the pegmatite to kaolin. Moving north the dip of the pegmatite shallows and the lithium domain at more than 1% Li2O is discontinuous.

Source: SRK, 2022

Figure 6‑2: Simplified Stratigraphic Column


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6.2.1Structure

Shear structures in the pegmatites are most strongly developed at margins and in albite rich zones. The orientation of shear fabrics is sub-parallel to the regional Donnybrook–Bridgetown Shear Zone indicating pegmatite intrusion was synchronous with this deformational event. Folding postdates mylonization of the albite zone yet predates or is synchronous with later stages of crystallization. Dilatant zones formed in footwall albite zones during folding and were infiltrated by late stage Sn-Ta-Niobium (Nb) rich fluids which may be the sites for a second stage of high-grade mineralization. Later stage discordant structures have also been interpreted, the most obvious being the “Footwall Fault”, a sub-vertical structure striking north-south across the deposit. Faulted zones vary in structural intensity from heavily jointed to disintegrated rock greater than 30 m in width.

6.2.2Mineralogy

As stated above, internally the Greenbushes pegmatite displays up to five mineralogically defined zones (Figure 6-4); the Contact Zone, K-Feldspar (Potassium) Zone, Albite (Sodium) Zone, Mixed Zone and Spodumene (Lithium) Zone. Zones generally relate to multiple phases of intrusion and crystallization of the pegmatites.

The zones occur as a series of thick layers commonly with a lithium zone on the hanging wall or footwall, K-feldspar towards the hanging wall and a number of central albite zones. High-grade tantalum mineralization (more than 420 grams per tonne [g/t]) is generally confined to the Albite zone within the deposit. The Spodumene and K-Feldspar Zones typically have tantalum-tin grades of less than 100 ppm.

Table 6-1 summarizes the main minerals associated with the historically economic elements Tantalum (Ta), Tin (Sn) and Lithium (Li) at Greenbushes. Currently, only Lithium minerals are exploited and processed at Greenbushes.

Table 6-1: Major Lithium and Tantalum Ore Minerals


Tantalum	Composition	Lithium	Composition
Columbo Tantalite	(Fe,Mn)(Nb,Ta)2O6	Spodumene	LiAISi2O6
Stibio Tantalite	(Nb,Ta)SbO4	Varieties
Microlite	((Na,Ca)2Ta2O6(O,OH,F))	Spodumene – White
Ta – Rutile (Struverite)	(Ti,Ta,Fe3+)3O6	Hiddenite – Green	(Fe,Cr)
Wodginite	(Ta,Nb,Sn,Mn,Fe)16O32	Kunzite – Pink	(Mn)
Ixiolite	(Ta,Fe,Sn,Nb,Mn)4O8	Other Lithium Minerals
Tapiolites	(Fe,Mn)(Ta,Nb)2O6	Lithiophilite	Li(Mn2+,Fe2+)PO4
Holite	AI6(Ta,Sb,Li)[(Si,As)O4]3(BO3)(O,OH)3	Amblygonite	(Li,Na)AI PO4(F,OH)
Tin		Holmquisite	Li(Mg,Fe2+)3AI2Si8O22(OH)2
Cassiterite	SnO2	Lepidolite	K(Li,AI)3(Si,AI)4O10(OH)2

Source: Talison, 2018

Major minerals are quartz, spodumene, albite and K-feldspar. Primary lithium minerals are spodumene, LiAlSi2O6 (~8% Li2O) and spodumene varieties kunzite and hiddenite. Minor lithium minerals include lepidolite (mica), amblygonite and lithiophilite (phosphates). Spodumene is hard (6.5-7) with an SG of 3.1-3.2. Highest concentrations (50%) of Spodumene occur in the C1 and C3 pits.


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When spodumene is weathered and oxidized the lithium ions leach into the environment, the result is spodumene pegmatite weathered to clay. This is of little to no economic value to the current operation. Oxidation of the pegmatites has generally occurred in near-surface weathering or along selected structures internal to the pegmatites. Only the near-surface weathering is considered to materially affect the pegmatite from a process mineralogy standpoint.


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Source: Talison, 2018

Figure 6-3: Greenbushes Local Geology Map


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Source: SRK, 2020

Note: Aerial photo taken from 2017.

Figure 6-4: General Area of Interest Nomenclature – C1, C2, C3, and Cornwall Pit Areas


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Note: Section looking north.

Source: Modified from BDA, 2012

Figure 6-5: Cross Section Showing General Stratigraphy and Greenbushes Pegmatite Mineral Zoning


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7Exploration

7.1Exploration Work (Other Than Drilling)

The primary mechanism of exploration on the property has been drilling for the past 40 years. While other means of exploration such as geological mapping, surface geochemical sampling, and limited geophysics have been considered or applied over the years, weathering and associated leaching of the near-surface pegmatites results in economic lithium mineralization not commonly being recognized via surface investigations (BDA, 2012).

For the purposes of this report resource and reserve estimate, in SRK’s opinion, active mining, exploration drilling, and in-pit mapping provide the most relevant and robust exploration data for the current mineral resource estimation. In-pit mapping of the pegmatite and waste rocks is the most critical of the non-drilling exploration methods applied to this model and mineral resource estimation, as detailed in Section 11 of this report.

The area around the current Greenbushes Lithium Operations has been mapped and sampled over several decades of modern exploration work. While other nearby exploration targets have been identified and developed over the years, they are not included in the mineral resources disclosed herein and are not relevant to this report.

SRK utilized pit mapping from Talison geologists to refine the geological modeling.

7.1.1Significant Results and Interpretation

SRK notes that the property is not at an early stage of exploration, and that results and interpretation from exploration data is generally supported in more detail by extensive drilling and by active mining exposure of the orebody in multiple pits.

7.2Exploration Drilling

Drilling at Greenbushes has been ongoing for over forty years. There are a total of 1,166 reverse circulation (RC) and diamond drill holes (DDH) drill holes to date which support the geological model and mineral resource. The drill hole database has been compiled from more than 25 contracted drilling companies. The original RC drilling dates back to 1977 in the most current drilling in the database is as recent as 2020. There are 563 RC holes in the database, 14 combination RC and DDH holes, 585 DDH holes, and four holes that are of an undefined/unknown type. A complete breakdown is shown in Table 7-1.


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Table 7-1: Holes by Type Included in the 2020 Resource Statement


Type	# Holes Drilled	Total Meters
DDH	380	74,360
DIA	1	172
DIA BTW	199	30,583
DIA/BTW	5	1,044
RC	563	78,333
RC/DDH	14	4,904
Trench	1	186
Blank	3	310
Total	1,166	189,892

Source: SRK, 2020

7.2.1Drilling Surveys

Resource drillholes contained in the Greenbushes database date back to 1979. More recent (post-2000) down hole surveys used Eastman Single Shot cameras, while the later reverse circulation (RC) programs (since hole RC214) utilized either a gyroscopic or a reflex electronic tool. Eastman down-hole surveys were recorded at 25 m down hole and thereafter every 30 m to a minimum of 10 m from the final depth. The geologist checks the driller’s dip and azimuth written recordings by viewing all single shot photographic discs prior to data entry into the database.

Prior to 2000, surveys were based on a variety of industry standard methods that cannot be verified but, in SRK’s opinion, can be relied upon. Checks of surveys within the database, by comparing overlapping data between older and post 2000 drill holes, support the opinion that the surveying is reliable. Some of the RC holes drilled before 2002 were apparently not down-hole surveyed and were instead given linear design parameters based on collar orientations in the database. Also, some of the older vertical diamond holes were not down-hole surveyed. In SRK’s opinion, this is not a material issue given the relatively shallow drilling depths and tendency of vertical holes to not significantly drift.

The location of recent surface drill hole collars is surveyed by the mine surveyors using a differential GPS system accurate to less than 1m. Historical collars were surveyed using industry standard equipment available at the time and are reliable in SRK’s opinion. Environmental rehabilitation programs to relocate historical collars using their coordinates and a handheld GPS have been successful and acts as a validation of historical collar surveys.

During drilling of angled holes, the drillers use cameras survey tools to take surveys at approximately every 30 m as the hole progresses. Upon the completion of recent holes gyroscopic tools have been run to give closer spaced readings not influenced by ground magnetics. Vertical holes are typically surveyed less regularly and only at the end of hole for holes less than 100 m depth. Holes intersected during mining are surveyed and comparisons to the hole trace show the down hole surveys are reliable (Talison, 2020).

7.2.2Sampling Methods and Sample Quality

The Greenbushes pegmatite is sampled by a combination of RC and diamond drilling programs. The drill patterns, collar spacing, and hole diameter are guided by geological and geostatistical


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requirements for reliability of geological interpretation and for confidence of estimation in mineral resource block models.

Drill core samples provide intact geological contact relationships, mineralogical associations and structural conditions, while RC drill sampling provides mixed samples from which mineral proportions are estimated by visual examination.

A sample interval of 1 m is used as the maximum default length in RC and diamond drilling. Analysis of the deposit characteristics has been used to determine the appropriate sample interval in drill holes.

Distinguishing the dark internal and hosting waste rock from the light pegmatites in drill core is clear and obvious. Where unaffected by shearing, the geological contacts are abrupt, often regular and intact. Although contact relationships are masked in RC chips, the pegmatite/waste contact positions are inferred within the sample length. Both diamond drill and RC drill holes are distributed throughout the lithium deposits (Talison, 2020).

7.2.3Diamond Drilling Sampling

In SRK’s opinion, diamond drill holes (DDH) are considered by most to be authoritative and the most representative sampling of subsurface materials available. Diamond core is collected in trays marked with hole identification and down hole depths at the end of each core run. Pegmatite zones are selected while logging and intervals are marked up for cutting and sampling. All pegmatite intersections are sampled for assay and waste sampling generally extends several meters on either side of a pegmatite intersection. Internal waste zones separating pegmatite intersections are routinely sampled, although in a small proportion of holes drilled prior to 2000 some waste zones separating pegmatite lenses have not been assayed.

Core recovery is generally above 95%. A line of symmetry is drawn on the core and the core is cut by diamond saw. Historically BQ and NQ core has been half core sampled with more recent HQ core quarter cut and sampled. The typical core sampling interval for assay is 1 m, but shorter intervals are sampled to honor geological boundaries and mineralogical variations.

To date, in SRK’s opinion, diamond core recovery and sampling is suitable for the purposes of mineral resource estimation.

7.2.4RC Drilling Sampling

RC samples are collected by face sampling hammer for every meter drilled over the full length of the hole via a cyclone attached to the rig and split at the rig by the drilling contractor using either a riffle splitter, rotating cone splitter or stationary cone splitter. A sample of approximately 3 to 4 kg is submitted to the laboratory. In some old RC holes, the regular sampling length was 2 m. Field duplicates are taken every 20 m and submitted to the laboratory for quality assurance/quality control (QA/QC) purposes. RC drill hole bit size is normally approximately 4.5 inches or 5.25 inches. The drilling conducted since the last resource update were all drilled using a 5.25 inch bit size.

All pegmatite intersections are submitted for assay. The sections sampled will normally extend several meters into the waste rock hosting the pegmatite. As with diamond drilling, internal waste zones separating pegmatite intersections are also sampled, although in some old holes some of this


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internal waste sampling is incomplete. Pegmatite intersections are visually distinguishable from waste zones in drill chips during drilling.

Drill cutting reject piles are reviewed by site geologists when geological logging and intervals with poor recoveries are recorded. The drill samples are almost invariably dry, and recoveries are consistently high (Talison, 2020).

7.2.5Drilling Type and Extent

The drilling at the project is both RC and DDH which extends from south of the C1 pit to north of the Cornwall pit. The holes are drilled in a variety of orientations, primarily vertically or perpendicular to the pegmatite. There is approximately 1,189,895 m of resource drilling. Holes are spread relatively uniformly and at reasonable spacings throughout the Central Lode deposits, and mineralization is defined by exploration drilling at 25 to 50 m drill spacings for exploration purposes. More detailed grade control drilling is conducted in near-term production planning areas, as are very detailed blast holes during production.


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Source: SRK, 2020

Figure 7-1: Drilling Type and Extents

7.2.6Drilling, Sampling, or Recovery Factors

SRK is not aware of any material factors to the drilling that would affect the results.

To evaluate the various types of drilling, SRK compared overall means of multiple drilling types on a global and local basis. Global comparisons for drill types are shown in Figure 7-2, and demonstrate that the different types do feature different mean % Li2O values. In SRK’s opinion, the spatial component of where the specific type of drilling occurred is the source of variance in the means at a global comparison scale. For example, it is natural that the blast hole data or the RC data (which features closely spaced grade control drilling) would be higher grade on average than the DDH drilling, which is sparser, exploration focused (i.e. finding the limits of the orebody), and less likely to be located in the higher grade portions of the pegmatite.


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SRK notes that only DDH and RC drilling were considered for the mineral resource estimation (i.e. not blast holes) and that these data types were compared on a more local basis as well.

To do this, RC samples were compared against paired closely-spaced DDH samples based on the distance between the two, and SRK noted similar trends in grade distribution between the two data types as shown in Figure 7-3. These comparisons feature excellent comparison of RC and DDH sample grades at very close spacings, with deviations happening at distances greater than approximately 10m. In SRK’s opinion, is of the opinion that this likely reflects inherent geologic variability or variability of grade within the pegmatites rather than a consistent bias in drilling methodology. SRK also notes that, as distances between samples increase to more global populations, that the inherent spatial bias of the RC grade control drilling (preferentially located within the ore zones of the pegmatite) likely influences overall global comparisons to favor the RC drilling with a higher mean Li2O.

Source: SRK, 2020

Note: BH = Blastholes, DDH = Diamond Drill Hole, DIA = Diamond Drill Hole, DIA/BTW = Diamond Drilling Thin Wall, RC = Reverse Circulation, RC/DDH = Reverse Circulation with Diamond Drill “Tail”

Figure 7-2: Box and Whisker Plot – Li2O by Drilling Type


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Source: SRK, 2020

Note: Only RC vs. DDH drilling shown.

Figure 7-3: Drilling Type Mean Comparison – By Average Separation Distance


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To consider the possible impact of drilling recovery (only noted in DDH drilling) SRK reviewed recovery information for those holes where it was logged.

Recovery logs are made of all diamond drill core as a part of the standard logging procedure which includes collection of geological, mineralogical and structural information. Core recoveries within the fresh pegmatite range from 95% to 100%. SRK noted no bias in Li2O or relationship with recovery in those samples where both are noted.

Weight measurements are made of RC samples from selected holes to understand potential impacts with recovery in RC drilling, but are not quantitative due to the drilling method. Site geologists also inspect the size of the cutting piles, and intervals differing from the norm in size or moisture content are noted on drill logs. RC sample recovery generally has been assumed to be excellent.

7.2.7Drilling Results and Interpretation

SRK utilized the logged geology to develop geological models utilizing industry standard 3D implicit modeling practices. Talison uses the drilling information for the same process, as well as detailed short term modeling and grade control/mine planning.

Analytical data for Li2O and other elements was interpolated in 3D to develop geochemically distinct domains within the geological model and were driven by structural or interpreted grade continuity models.

7.3Hydrogeology

SRK reviewed the previous groundwater and surface water studies at Greenbushes, including water balance and groundwater modeling.

The hydrogeologic data collected indicate that the mineral resource is overlain by a relatively low permeability groundwater system consisting of lateritic caprocks and well developed saprolitic clays which yield very little water. Beneath these weathering products, exists a sharp to gradual transition into the fractured bedrock. Within this transition zone the variably weathered bedrock and remnant fractures form the highest yielding groundwater due to the enhanced permeability. Deeper within the bedrock, localized faults and fractures may result in enhanced permeabilities. Based on testing completed, hydraulic conductivity (K) for the weathered bedrock zone ranges from 0.01 m/d to 1 m/d, while the bedrock (pegmatite/greenstone) has a K of 3.0 x 10-4 m/d to 6.0 x 10-3 m/d (GHD, 2019a), although it should be noted that these values are based on bulk averages within a fracture bedrock groundwater system.

Local aquifers are hosted within the surficial alluvial sediments (where present), at the interface between the saprolitic profile and the underlying basement rocks, and within the deep fracture basement rocks. In general, the alluvial aquifers received most of the recharge from precipitation, with limited vertical migration through the lower clay-rich sediments, to the bedrock contact zone and deeper. Any impacts from TSF seepage would be limited to the alluvial aquifer, with only minimal probability of infiltration to deeper groundwaters.

In SRK’s opinion, the completed hydrogeologic studies, collected data, and subsequent analysis is appropriate for the overall low hydraulic conductivity of the local hydrogeologic system.


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7.4Geotechnical Data, Testing and Analysis

A geotechnical study for the Central Lode LoM pit for the Greenbushes operations was conducted by PSM Consult (2020). The Central pit is currently in operation, and they have good experience with slope and bench performance. In SRK’s opinion, the geotechnical data collected has sufficient coverage around the pits to demonstrate knowledge of pit sector characterization and strength properties of the rock mass. SRK has not conducted any new field geotechnical work for this report. Rather we have reviewed and rely on the work conducted by PSM.

Data Collection

The characterization data comprised geotechnical borehole logging, televiewer interpretation, oriented core logging, geotechnical mapping, photogrammetry, piezometer and laboratory testing data from historical and recent site investigation programs. The data collected from the 2018/2019 investigation represents a substantial increase in the available geotechnical data for Greenbushes.

Geology and Structure

The Greenbushes Pegmatite Group is situated within the regional-scale Donnybrook-Bridgetown Shear Zone. On a mine-scale, the geology consists of amphibolites and granofels which host the pegmatite intrusions, and late mafic dolerite dikes and sills which intrude the entire sequence. A weathering profile extends to about 30 m below the surface (up to 60 m in places).

Major geologic structures are at or nearby major lithologic contacts and faults/shears that are typically steeply to moderately dipping to the west. Two primary fault zones will impact slope stability. The Northern Dolerite Sill Fault Corridor is exposed in the current Cornwall and C3 pits. The Pegmatite Shear Zone (PSZ) consists of soil to low strength rock material located behind the northern portion of the west wall. The orientation of the PSZ dips favorably into the wall, has a thickness of 20 to 50 m and the spatial extent appears to be limited by the lack of exposure in the Cornwall Pit and boreholes south of 12,000N.

Structural Domains

11 structural domains were identified from televiewer and photogrammetry data. The west wall has steeply dipping structures with variability from north to south and within the Dolerite lithologies. The Pegmatite is separated into two domains with the main set steeply to moderately dipping to the west.

Discontinuity shear strengths were assessed from direct shear tests and using typical joint characteristics from logging. The shear strength ranged from 36° to 41° friction with assumed zero cohesion. The estimated strengths also considered lithology, defect shape and roughness characteristics.

Rock Mass Strength

The rock mass was separated into 14 units based on weathering, lithology and strength characteristics. Below the near-surface upper weathered zone the rock masses are high strength with UCS values from 50 to 190 MPa, with the exception of the PSZ which is very weak rock. Strengths were assessed using GSI values, except for the upper weathered zone where triaxial test results were used.


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Hydrogeology

The impact of hydrogeology on slope stability has been limited due to insufficient data. Vibrating wire piezometers were installed during the recent field investigation. The water table is estimated to be between 30 to 60 m below surface at the base of the weathered zone. It is understood that perched aquifers form during winter from precipitation recharge; however, connectivity of the perched aquifer is uncertain.

Data Gaps

Uncertainties in the geotechnical model include the following:

•Variability in the upper weathered zone and location of the contact between the Granofels and Amphibolite behind the east wall

•The character and orientation of modeled faults, the extent of the PSZ and the length and waviness characteristics of structures

•Rock mass conditions within the PSZ and strength of Amphibolite units behind the east wall

•The pore pressure response to mining of the basement geology and the connectivity with the weathered zone


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Source: SRK, 2020

Figure 7-4: Plan View Illustrating Exploration Drilling by Date


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8Sample Preparation, Analysis and Security

8.1Sample Preparation Methods and Quality Control Measures

Quoted and modified from the 2018 Central Lode Resource Update (Talison, 2018), this section covers the best-known information about sample preparation, with added appropriate information for 2020.

Drill samples from RC drilling programs are collected and bagged at the rig as drilling progresses. The RC samples are collected in sequential, pre-numbered bags directly at a discharge chute on the sample splitter to which the sample bag is attached. The splitter is either fed via a closed sample collection circuit at the drill hole collar or is fed manually from a sample bagged at the cyclone.

Drill core samples are also collected sequentially in pre-numbered sample bags after cutting with a diamond saw. The integrity and continuity of the core string is maintained by reassembling the core in the tray. If any apparent geological discontinuities are noted within or at the end of core runs these are resolved by the logging geologist.

All sample preparation and analytical work is undertaken at the operation’s on-site laboratory, which is ISO 9001: 2008 certified and audited in accordance with this system, most recently in June 2016. The Greenbushes laboratory provides quick and secure turn-around of geological samples using well established quality control procedures. The laboratory also services processing plant samples and samples from shipping products.

Upon submission to the laboratory, samples are entered into the laboratory sample tracking system and issued with an analytical work order and report (AWOR) number. Separate procedures have been developed for RC and diamond drill samples.

Preparation, analysis and management of geological samples are covered comprehensively in laboratory procedures. The sample preparation flow sheet is shown in Figure 8- and can be summarized as follows: all samples are dried for 12 hours at a nominal 110ºC; thereafter samples are passed through a primary crusher to reduce them to minus 10 millimeters (mm), followed by secondary crushing in a Boyd crusher to -5 mm. A rotary splitter is used to separate an approximate 1kg sub-sample, which is ground in a ring mill to minus 100 µm.

Historically, two routes have been used for the preparation of geological samples. The first utilizes standard ferrous pulveriser bowls, while the second uses a low iron preparation method with a non-ferrous tungsten bowl. The low iron preparation as shown in Figure 8-1 has been used for all samples in recent drilling programs. All resource drilling sample pulp residues are retained in storage. Coarse sample rejects are normally discarded unless specifically required for further test work. Sample preparation is carried out by trained employees of the company in the Greenbushes site laboratory following set laboratory procedures.


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Source: Greenbushes 2018 Resource Update

Figure 8-1: Greenbushes Drill Hole Sample Preparation Procedure

8.2Sample Preparation, Assaying and Analytical Procedures

Excerpted from the 2018 Central Lode Resource Update (Talison, 2018), this section covers the best-known information about assay preparation, with added appropriate information for 2020.

Due to the long history of operations at Greenbushes, the meta-data regarding assaying is somewhat incomplete; however, the recording of analytical data has been at the current standard since at least 2006. As far as can be determined, all assaying of drill samples has been by XRF and Atomic Absorption Spectroscopy (AAS). The majority of samples have been analyzed for 36 elements at the Greenbushes laboratory. Sodium peroxide dissolution and AAS is used for Li2O


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determination. The other elements/oxides are analyzed by XRF following fusion with lithium metaborate. The analysis of geological samples for Li2O by AAS and other elements/oxides by XRF is documented in laboratory procedures.

Over time, the detection limits of some elements assayed at the Greenbushes laboratory have improved, as outlined in Table 8-1, with implications for the accuracy of some of the older assays in the database. This appears only to be significant for the low concentration elements and has no material effect on the resource model estimates. Current detection limits remain as listed for PW2400 (low level) June 2001. Detection limits are stored in the acQuire geological database.

Table 8-1: Greenbushes Laboratory Detection Limit History


Element	Detection Limit (%)
	PW1400 - 1983	PW2400 – Nov 1995	PW2400 (Low Level) – June 2001
Ta2O5	0.005	0.005	0.001
SnO2	0.005	0.005	0.002
Li2O	0.010	0.010	0.010
Na2O	0.005	0.005	0.005
K2O	0.005	0.005	0.005
Sb2O3	0.005	0.005	0.002
TiO2	0.005	0.005	0.005
As2O3	0.005	0.005	0.005
Nb2O5	0.005	0.005	0.0021
Fe2O3	0.005	0.005	0.005
U3O8	0.005	0.005	0.002

1The detection limits for June 2001 are current apart from Nb2O3, which reduced from 0.005% to 0.002% in 2010

Source: BDA, 2012

In 2002, a proportion of underground drill core samples were sent to the Ultra Trace Pty Limited Laboratory in Perth, WA, for analysis. XRF was used to analyze for Ta, Sn and other components, and ICP for Li2O analysis.

8.3Quality Control Procedures/Quality Assurance

The majority of this summary comes from previous public reporting (BDA, 2012) and internal Talison reporting on mineral resource updates as of 2018. The processes and procedures are the same at the effective date of this report.

QA/QC systems at Greenbushes have developed over time and therefore vary for the dataset used for the 2020 Mineral Resource Estimation. Duplicate field samples are collected and analyzed for RC drill holes but not diamond core samples. Current RC drilling practice is to submit a field duplicate sample for every 20 samples submitted. These duplicates are collected in the same way as the routinely assayed samples. Results are recorded in the acQuire database software and QA/QC reports generated for each drill program.

The quality of the recent drill program was accepted for Li2O resource estimation. QA/QC relating to all previous drilling has been completed and data accepted with each successive drill program and resource update.


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8.4Assay QA/QC

QA/QC systems have relied upon the Greenbushes laboratory’s internal quality systems, which include replicate (pulp repeat) laboratory analyses and analysis of known standards by XRF, both included in each batch of drill samples. Greenbushes also has participated in round-robin reviews of analyses with other independent laboratories as checks on their internal processes. Li2O in geological drill samples is not analyzed in replicated samples to calibrate the machine; instead, the AAS machine is recalibrated before every batch of samples.

Known solution standards and blanks are embedded in each batch and the accuracy of the calibration is monitored regularly during the analysis of each batch. The results are also captured in the database. The precision of the AAS analysis technique is statistically monitored using plant processing and shipping data. In SRK’s opinion, the resulting precision at mining grades is of high quality and confirms the quality of the AAS method employed.

In SRK’s opinion, the QQ plots of RC drill sampling results do not indicate any significant bias between the original and check sample populations. Scatter plots of original and field duplicates for Li2O from recent RC holes show less variability than the same plot over all the RC resource holes suggesting a reduction in sample error. Plots for half absolute relative difference (HARD) show less sampling error in recent RC data compared to the overall RC data. A scatter plot for Li2O replicates from RC samples shows acceptable repeatability of results.

8.5QA/QC - Recent Drilling

The post-2016 RC drilling samples were submitted to the site laboratory with the geology department submitting custom certified reference material (CRM) standards SORE1 and SORE2. The CRM was prepared by ORE Research and Exploration Pty Ltd in early 2014 from run of mine material having grades and matrix relevant to the deposit. The custom geological standards SORE1 and SORE2 performed within 2SD for Li2O analysis in all 403 laboratory batches since January 2017. Talison has continuously evaluated and monitored the QAQC and noted this performance for all relevant sampling, so the analytical accuracy for the database is considered acceptable for Indicated and Inferred resource reporting (Figure 8-2 and Figure 8-3) in SRK’s opinion.


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Source: Talison, 2020

Figure 8-2: Results for CRM SORE1


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Source: Talison, 2020

Figure 8-3: Results for CRM SORE2

Approximately 5% of pegmatite samples submitted to the laboratory are duplicated in the field. The results are first reviewed using a scatter plot (Figure 8-4) during the drilling program and duplicates with greater than 20% variation investigated. As the reliable determination level of the laboratory is 0.05% Li2O, duplicates with Li2O assays less than 0.2% Li2O are ignored for monitoring. A primary sample of 0.2% Li2O with a duplicate of 0.25% Li2O would present as an error with half absolute relative difference (HARD) of 11%.

Errors include misallocation of the duplicate pair by the rig geologist when creating the sample listing in excel due to dragging number formulas down the sheet. This will result in the sample allocation being 1 m out on the hole and a sample paired with its adjacent sample rather than it’s duplicate. This error is resolved by going back to the written field sample collection sheet.

Another common error is a similar miss ordering of samples through the laboratory process. In the last couple of years barcode labelling and QR readers have greatly reduced the opportunity for sample miss ordering in the laboratory. There are still a couple of processes such as when samples are dissolved in solution in reusable glassware that rely on good procedure and keeping things ordered. This will also offset sample location by 1 m on drill holes, on a review of the returned results


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a preceding or following sample will show as essentially identical to the duplicate rather than the result reported. Note that the whole 36 element suite is correlated for a sample not just the Li2O value.

Samples are taken for every meter drilled so field duplicates not resolved by the previous two methods are typically addressed by re-splitting the bagged sample and submitting the second sample (a duplicate) for several samples around the failure. Good correlation of the additional duplicates to their samples confirms the original sample allocation on the hole is correct. Where poor correlation remains and there is no confidence in the alignment of results to the hole then the whole assay job may be re-split to get acceptable results which was the case for an assay job on RC484 which was clearly mixed up in the laboratory.

There are some failed duplicates that remain unresolved which are interpreted to be due to the natural variation within a coarse-grained variable mineralogy at the sample location. These have strong correlation between many elements in the assay suite but differ on several others. These will often occur in a mixed mafic and pegmatite mineralogy where a sample interval crosses a lithology boundary.

Some remaining failed duplicates are interpreted to be due to poor drilling conditions that affect a sample either natural such as water coinciding with a duplicate position or mechanical such as hydraulic failure of splitter mechanisms. There are some that will be due to poor field practice. The simple (although time consuming) resolution of many failed duplicates to show the underlying data, in SRK’s opinion, was representative and gives enough confidence in the dataset to use for MRE of Li2O. A QQ plot (Figure 8-5) of field duplicates during recent drilling does not show bias between the primary and duplicate sample populations. The splitter hygiene and operation during the program is therefore interpreted as acceptable.


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Source: Talison, 2020

Figure 8-4: Scatterplot of Recent Field Duplicates >0.2% Li2O


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Source: Talison, 2020

Figure 8-5: QQ Plot of Field Duplicates Post-January 2016


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Source: Talison, 2020

Figure 8-6: HARD Plot of Field Duplicates Post January 2016

A HARD plot displays 85% of the data with Li2O >=0.2% has a HARD value of less than 10% which is acceptable for the current level of disclosure (Figure 8-6).

8.6Opinion on Adequacy

SRK has reviewed the sample preparation, analytical and QAQC practices employed by Talison for the Greenbushes deposit, and notes the following:

•In SRK’s opinion, the current and historical analytical procedures are or were consistent with conventional industry practices at the time that they were conducted. The majority of the resource is supported by modern drilling with recent QAQC, and analyses as described above.

•In SRK’s opinion, recent QAQC is robust in design and monitoring and demonstrates that the analytical process is sufficiently accurate for supporting mineral resource estimation.

•SRK has considered the historical nature of the drilling, and the limited QAQC associated with it, in the mineral resource classification.


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9Data Verification

The database was verified by SRK via the use of scripting to test the available lab assay certificates against the database assay values. Tests were set up on a pass/fail basis for each element in each of the available samples. Failures were individually analyzed to ensure the error was not due to logic failures in the scripting.

SRK was provided a total of 6,918 usable assay certificates the earliest of which date from 2006. More certificates in multiple formats were provided (pdf, excel, csv, paper) which cover the period prior to 2006 of which many are not material to the Central Lode area.

9.1Data Verification Procedures

Verification was completed by compiling analytical information provided in the supplied certificates and cross referencing with the analytical file for the project. Analytical certificates in both Comma Separated Value (CSV) and Excel (XLS) file format were used in verification. As mentioned, certificates were supplied in other formats including pdf and paper; however, verification was not attempted on those.

Verification on the on the XLS and CSV data was done using the Python scripting language to merge and compare the certificate data against the analytical file (Table 9-1). Tests were done on the string values of Li2O geochemistry from the certificates, matched by sample ID. Assumptions for these tests in comparing the data sets are as follows:

•In cases where the merged file’s value was below the detection limit, half the lower limit of detection was applied.

•For example, <0.01 became 0.005 for comparison purposes

Merged results from the comparison were imported back to Excel for comparison and analysis. Matched tests were assigned a numeric code of “1,” and failures a “0.” Through this analysis, SRK compared 45,408 records from the database against the original analytical data and noted a match rate of over 98.5%. Errors were likely related to the challenges in matching samples between data sets (see Section 9.2).

Values were identified for Li2O comparison from 51.9% of the data used in the mineral resource estimation. The complete analytical file includes 87,412 samples. From the analytical certificates provided, SRK was able to identify 45,408 unique samples.

Table 9-1: Data Verification Summary


Number of samples in the assay file for comparison			87,412
Number of samples identified in the lab certificates for comparison			45,408
Total percentage of samples compared from the assay file			51.9%
Number of tests compared per sample			1 (Li2O)
Maximum number of possible matches between identified lab certificate sample and assay file samples when comparing			45,408
Actual number of matches between lab certs and assay database when comparing sample tests			44,761
Percentage of matched tests			98.5%

Source: SRK, 2020


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Assay Sheet Data Quality Analytic Procedure

The sample IDs in the assay sheets contained a widely varying set of characters with little consistency. “Fuzzy” matching was attempted to correlate nomenclature across laboratories and generations of data, but mismatches in the naming is likely the source of the majority of the failed comparisons.

Example: Sample ID from certificate: UGX10362.

SRK tested the assay database for:

•UGX10362

•*GX10362

•*X10362

•*10362

If no matches are found, then there is no comparison for this sample.

Duplicate sample IDs in the assay sheets were eliminated from analysis unless all values from duplicate samples were identical.

Within the analytical certificates provided, and due to variability in the naming, formatting, and characters of the sample IDs described in the lab assay sheets, only 45,408 unique sample IDs of the 87,412 sample IDs from the digital drilling database (51.9% of the total) were able to be corresponded to sample IDs in the assay sheets across both verification phases.

Data Comparison

SRK compared Li2O grades only for the matched assays from assay sheets and the digital database.

Of these 45,408 values in the assay database, there were 647 mismatches between the values recorded in the assay database and the lab assay sheet resulting in an error rate of approximately 1% (1.42%) and a match rate more than 98% (98.58%) in the assay database.

Li2O values for all corresponding sample IDs were compared and any value which did not match was failed. Only those values which matched were identified as a “pass.”

Errors were provided to Talison, and failures are primarily attributed to shifts in sample nomenclature which could not be dealt with through the scripted data comparison, or mis-identified duplicates as noted in previous sections.

9.2Limitations

Certificates for lab samples were given to SRK in two batches with the second batch especially difficult to identify in relation to the assay file. Many of the sample IDs in the certificates appeared to have a changing nomenclature scheme that was not reflected in the assay file. As a result, matching many of the assay samples with appropriate sample from lab certificates was challenging.

SRK was unable to perform a site or laboratory visit to verify the stated procedures are being followed. All details and data on QA QC methodology are second-hand and provided by Greenbushes personnel.

Although higher percentages for validation could be completed, the time associated with the process is prohibitive for the purposes of public reporting.


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9.3Opinion on Data Adequacy

In SRK’s opinion, the digital database provided by Talison is of sufficient quality to support mineral resource estimation. Low incidents of quality control failure were noted in the comparisons made to original source data, and explanations for failures are reasonable and common amongst mining projects with extensive histories and various generations of logging styles and analytical laboratories.


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10Mineral Processing and Metallurgical Testing

Greenbushes operates their Chemical Grade Plant-1 (CGP1) to recover spodumene from ore containing about 2.5% Li2O into lithium concentrates containing about 6% Li2O. The CGP1 process flowsheet utilizes unit operations that are standard to the industry including: ball mill grinding, HMS, WHIMS, coarse mineral flotation and conventional fine mineral flotation. In addition, Greenbushes completed the construction of their Chemical Grade Plant-2 (CGP2) during 2019 and has initiated commissioning of this facility.

As part of the process design for CGP2, Greenbushes conducted an evaluation of the use of HPGR as an alternative to the ball mill grinding circuit currently used in CGP1. The HPGR was determined by Greenbushes to generate fewer non-recoverable fines (less than 45 µm) and offer the potential of improving overall lithium recovery. The results of this evaluation are documented in the report, “Chemical Grade Plant Number 2, High Pressure Grinding Roll (HPGR) Study”, April 2017. The results of this study indicated the following benefits associated with the use of a HPGR instead of ball mill grinding in CGP2:

•Reduction in over-grinding of spodumene enables a reduction in lithium losses with the slimes.

•Better liberation of spodumene in coarse size fractions for improved HMS performance.

•Better liberation of spodumene in the fine fractions.

•Selectively grinding softer minerals than spodumene to a fine size. Iron minerals are therefore concentrated in the fine fractions where they are easier to remove in WHIMS.

•HPGR is easier to adjust on-line to suit variations in ore hardness compared to a ball mill circuit.

10.1Metallurgical Testwork and Analysis

Greenbushes evaluated ball mill grinding versus HPGR comminution by comparing samples from the CGP1 banana screen undersize with samples from closed circuit HPGR testwork. For this analysis closed circuit HPGR crushing of -38 mm feed with a 3.35 mm closing screen was compared with crushing to 12 mm followed by closed circuit ball-mill grinding. This comparison gave an indication of the wt% and Li2O grade reporting to heavy media separation, coarse flotation, fine flotation and the potential slime losses.In order to estimate the effect that shifting the lithium distribution has on estimated plant yield and recovery, heavy liquid separation (HLS) tests were conducted on selected samples at specific gravities ranging from 2.70 to 3.32 gram per cubic centimeter (g/cc). For this evaluation, lithium reporting to HLS sink products at specific gravities greater than 2.96 g/cc were considered 100% liberated. HLS tests were conducted on plant feed prepared by ball mill grinding (CGP1), conventional crushing, low pressure HPGR comminution and high pressure HPGR comminution. The results show improved liberation with the HPGR when compared to ball mill grinding or conventional crushing. Greenbushes used a combination of size distributions, Li2O analysis of size fractions and liberation data to estimate the yield and lithium recovery that could result by using an HPGR instead of conventional ball mill grinding in the comminution circuit.

In the QP’s opinion the use of over 50 years of production history is adequate to define the recoveries and operating performances for the Project for the current level of study.


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11Mineral Resource Estimates

11.1Key Assumptions, Parameters, and Methods Used

11.2Geological Model

In order to constrain and control the MRE, a geological model was required to approximate the geological features relevant to the estimation of mineral resources, to the degree possible, given the data and information generated at the current level of study. SRK developed this model, in collaboration with Greenbushes geologists and Albemarle personnel, to leverage the site-based expertise and improve the overall model consistency. Geological information supporting the development of the model was generally collected by Greenbushes geologists and contractors.

The geological model is comprised of multiple features which have been modeled to either be independent of each other or, in some cases, may depend on the results from another modeling process. An example of this, is the way in which a structural model may influence the results of the lithology model or the final resource boundaries.

The combined 3D geological model was developed in Leapfrog Geo software (v5.1.1). In general, model development is primarily based on lithology logging from drilling but incorporates a range of other geological information including;

•Alteration and mineralogical logging

•Geological mapping (historic and modern)

•Interpreted cross sections (historic and modern)

•Surface/downhole structural observations

•Historic drill logging (historic samples are not incorporated into the MRE)

•Interpreted polylines (surface and sub-surface 3D)

Of note is the integration of extensive pit mapping from individual mapping sheets, compiled into a mosaic image and draped on relevant periodic topographic surfaces to when the mapping was conducted. As shown in Figure 11-1, these sheets denoting benches or specific production areas were georeferenced and draped over topography to enable digitization of contacts for rock types at very fine detail. This provides excellent geological context in addition to the dense drilling and enables the model to rely on observations made in the pit which may or may not have been as well defined by the drilling.


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Source: SRK, 2020

Figure 11-1: Example of In-Pit Geological Mapping Integration for 3D Modeling

The models developed for Greenbushes were designed to address the complex and multifaceted nature of the area geology. This includes an oxidation model for characterizing oxidized, transition, and fresh material, a lithology model for characterizing and quantifying geological bodies present, a depletion model to address previously mined out material, and a number of numerical models to identify and segregate domains by geochemical indicators (lithium).

Oxidation Model

The oxidation model was developed by grouping coding within the geologic logging into three categories. The original data provided by Greenbushes has five subjective categories: extreme (e), high (h), moderate (m), weak (w), and fresh (f). The general grouping used by SRK, grouped extremely and highly oxidized material as “Oxide” (e, h) and non-oxidized or “Fresh” rock (m, w, f). SRK considered the moderately oxidized or transition material (where logged) as a part of the overall fresh rock zone. A small quantity of codes was subjectively changed to produce a more geologically believable model. This occurred if they were either out of place geologically, very small and averaged into another unit, or inherently inaccurate due to variances in logging criteria over time. Though the original assignment of oxidation values was subjective and varied from logger to logger, the broad categories used were suggested by Greenbushes personnel and are thought to be reasonable in SRK’s opinion.


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Note: Section looking southwest

Source: SRK, 2020

Note: Logged transition intervals are incorporated into fresh rock for the purposes of simplifying the model.

Figure 11-2: Cross Section View of Oxidation Model

Lithology/Structural Model

The lithology model was developed by first creating grouped and selectable lithology tables in Leapfrog Geo. Codes which generally defined pegmatite (P and PC for example), were grouped into a single pegmatite code for the purposes of modeling. The same technique was applied to other primary rock types. An interval selection table was then built from the grouped codes, to allow for designation of more detailed features such as the dozens of discrete dolerite dikes. The pegmatite was created as an intrusive model and utilizes drilling intercepts to model contacts between pegmatite and other older/host rock contacts using structural trends from regional and pit-level geological observations. It was further refined through use of digitized polylines and polygons which were digitized either by Greenbushes personnel based on interpretation, drawn on bench-level pit maps, or created constrain pegmatite extents where drillhole data was sparse. Pegmatites of less than 2.5 m were filtered out and not inherently modeled implicitly.

In addition to the pegmatites, SRK modeled other in-situ waste rock types such as amphibolites (A), granofels (G), and dolerites (D). Amphibolites were modeled as intrusions around the pegmatite and dolerites, based on the observed regional trend of the known amphibolites. SRK notes that the amphibolites are certainly more extensive than what is currently defined by the model, but the data external to the drilling area is sparse. Granofels were modeled as the external host rock outside of all other rock types, although it is likely a mix of amphibolite, dolerite, and granofels. Dolerites were primarily modeled as intrusions with trends based on observations from pit mapping, regional interpretation from drilling, and the overall continuity observed in sections. The notable exception is for the many dolerite dikes which are modeled as “veins”, generally from selected intervals in drilling as defined by Talison geologists, digitized interpretations from observations made by exploration personnel, or digitized in-pit bench mapping. Finally, surficial (erosional) rock types were grouped as alluvial material and modeled together as a near-surface depositional feature which overlies all older


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rock types. SRK also modeled fill material within the pit areas or in tailings/waste construction areas to the degree that this data was available in drilling/mapping. This model should not be the authoritative perspective on fill materials, as other studies or data exist which likely provide more detail on quantities and conditions of fill materials for construction or infrastructure.

No major brittle structures were modeled as a part of this work, as structural data defining brittle faults in the pit is minimal. Talison geologists have noted that offsetting or brittle structural features are not critical to the current geological understanding, so SRK has not modeled them from the limited data available. Structural data was incorporated as strike and dip measurements from the pit areas, as well as overall 3D interpretations on trends for pegmatites and dolerites separately. These were developed along section and in 3D views based on the mapping and drilling intervals.

The geological model is shown in plan view and cross section in Figure 11-3 and Figure 11-4.

In SRK’s opinion, the level of data and information collected during both the historic and modern exploration efforts is sufficient to support the geological model and the MRE. In some cases, geological information was used to define trends or general morphology of units. For some units, “snapping” of the model to data types was utilized, wherein others were left to approximate logging intervals in cases where close-spaced drilling was at odds with mapping in the pit at a lower resolution than the model itself is capable of addressing. These occurrences are few but did exist within the pit areas. To examine the relative accuracy of the modeling process against the reality of the logging, SRK examined the overall percentages of logged other rock types contained within the modeled pegmatites, and vice versa (Table 11-1). SRK notes that the pegmatite model features an internal dilution of 3.15%, with the majority of dilutive material being associated with internal dolerite dikes for the pegmatite. SRK notes that, given the local internal complexity of the pegmatites and the waste rocks, that this type of internal dilution for a geological model is appropriate.


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Table 11-1: Model vs. Drilling Comparison


Model Values Matching Drilling Pegmatite
Model Lithology	Model Length (m)	Percent Length
Pegmatite	109,891	96.85%
Dolerites	2,578	2.27%
Surface(Alluvial)	570	0.50%
Granofels	304	0.27%
Amphibolites	121	0.11%
Model Values Matching Drilling Amphibolites
Model Lithology	Model Length (m)	Percent Length
Amphibolites	39,930	98.17%
Pegmatite	219	0.54%
Granofels	204	0.50%
Dolerites	180	0.44%
Surface(Alluvial)	141	0.35%
Model Values Matching Drilling Dolerites
Model Lithology	Model Length (m)	Percent Length
Dolerites	14,793	94.25%
Pegmatite	571	3.64%
Surface(Alluvial)	124	0.79%
Granofels	124	0.79%
Amphibolites	85	0.54%
Model Values Matching Drilling Granofels
Model Lithology	Model Length (m)	Percent Length
Granofels	17,226	95.74%
Dolerites	361	2.01%
Pegmatite	274	1.52%
Surface(Alluvial)	99	0.55%
Amphibolites	32	0.18%

Source: SRK, 2020


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Source: SRK, 2020

Note: Granofels and surface/alluvial material removed.

Figure 11-3: Plan View of 3D Lithology Model


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Source: SRK, 2020

Note: Looking North and section width +/- 50m

Figure 11-4: Cross-Section View of Geological Model


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Mineralization Model

Historically, the pegmatite geological model has been separated into spodumene-dominant pegmatite and pegmatites which may feature less spodumene or be more tin-tantalum rich. Talison has found in previous years that a 0.7% Li2O cut-off for analyses tends to define this spodumene-rich pegmatite domain well. SRK conducted some initial exploratory data analysis on the Li2O assays within the pegmatite geological model, and notes that there is a fairly distinct bimodal population in a histogram of the Li2O as shown in Figure 11-5. Visualizing these intervals on section and 3D above and below the 0.7% Li2O CoG (Figure 11-6) show that these >=0.7% assays do define a relatively contiguous and spatially discrete area of the pegmatite that corresponds to interpretation of higher spodumene pegmatite.

SRK elected to model the spodumene-rich portions of the pegmatite using an indicator interpolation approach, bound by the pegmatite itself but considering the overall internal structural trends as defined by the pegmatites. The indicator modeling process was conducted also using Leapfrog Geo, compositing the samples to a 3 m nominal length, with a probability factor for the indicator of 50%. SRK reviewed this probability factor (as well as a suite of cut-off grades) in the context of geological continuity defined by the continuous Li2O variable, relative dilution of intervals below the CoG, and exclusion of those intervals above the CoG, and comparison to the geological volumes as shown in Table 11-2. Tables like this were produced for every scenario and reviewed along with the wireframe itself with Talison geological staff for reasonability with interpretation. The resulting shape comprises about 36% of the overall pegmatite body, generally in the upper portions (although it does plunge in the northern areas under C3). Lithium does occur external to this shape, but as noted in the statistics for the model, approximately 4% of samples above the CoG are excluded. Internal to the indicator model, approximately 4% of total samples are included which are below the CoG.

SRK utilized the >0.7% Li2O indicator volume internal to the pegmatite as the higher-grade domain for estimation, and remaining pegmatite as the lower grade domain for estimation.


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Source: SRK, 2020

Figure 11-5: Li2O Histogram of Raw Assays Internal to Pegmatite


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Source: SRK, 2020

Figure 11-6: Pegmatite Distribution of Composited Li2O Assays Around 0.7% Li2O

Source: SRK, 2020

Note: >0.7% Li2O = Red, <0.7% Li2O = Yellow

Figure 11-7: Perspective View of 0.7% Li2O Spodumene Pegmatite


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Table 11-2: Statistics for Li2O Indicator Model


Indicator Statistics	Li2O - Pegmatite
Total Number of Composites	46,960
Cut-Off Value	0.7
	≥ cut-off	< cut-off
Number of points	32,177	14,783
Percentage	0.69	0.31
Mean value	2.73	0.28
Minimum value	0.70	0.01
Maximum value	6.56	0.70
Standard deviation	1.23	0.17
Coefficient of variance	0.45	0.61
Variance	1.50	0.03
Output Volume Statistics
Resolution	6.00
Iso-value	0.50
	Inside	Outside
≥ Cut-Off
Number of samples	30,812.00	1,365.00
Percentage	66%	0.3%
< Cut-Off
Number of samples	1,317.00	13,466.00
Percentage	0.3%	29%
All points	Li2O
Mean value	2.70	0.36
Minimum value	0.04	0.01
Maximum value	6.56	4.99
Standard deviation	1.27	0.41
Coefficient of variance	0.47	1.12
Variance	1.62	0.16
Volume	83,768,607	-
Number of parts	1	418
Dilution	4.1%
Exclusion	4.2%
Pegmatite Volume % Diff	230,100,000	36%

Source: SRK, 2020

11.2.1Exploratory Data Analysis

After refinement of the geological model into the higher and lower grade Li2O pegmatite, SRK conducted detailed exploratory data analysis on a wide range of elements within each domain. Of note were elements of potential economic interest, including Li2O, Fe2O3, SnO2 and Ta2O5. Additional elements for the purposes of density assignment or materials type characterization include MnO, Na2O, P2O5 and SiO2. Data was split on the basis of the resource development exploration drilling (RDEX) and the grade control (GC) drilling for this analysis, primarily due to the spatial distributions of each dataset. Raw sample statistics for the elements of interest, as well as specific gravity (SG) within the pegmatite are summarized in Table 11-3.


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Of note, SRK had the following observations of the analyses within the pegmatite domains between the two data types:

•The GC drilling is consistently higher in average Li2O content, due to the nature of it being almost entirely in the active mining areas. Other elements are generally similar.

•Elements are relatively consistently accounted for across the drilling types, with Mn and SiO2 being the least-assayed-for amongst the elements of interest.

•The GC dataset, due to being isolated and clustered in the production areas, does show significant differences in internal variance of Li2O (measured by the CV) and other elements.

•Other elements such as Sn or Ta are generally of very low quantities in the pegmatite, and do not occur in high enough concentrations to warrant consideration in the mineral resource.

•Fe2O3 % is also relatively low but is affected significantly by the contributions of limited waste samples from dolerite or amphibolite. Greenbushes geologists generally do not consider estimated Fe2O3 grades in the resource as definitive characteristics for materials typing or reporting, and instead rely on a calculated Fe variable from other elements.


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Table 11-3: Descriptive Statistics for Raw Sample Data – RDEX vs. GC Within Pegmatite


Name		Count	Length	Mean	Standard Deviation	Coefficient of Variation	Variance	Minimum	Lower Quartile	Median	Upper Quartile	Maximum
RDEx		66825	78,219
	Fe2O3_pct	63818	73,639	1.29	1.90	1.47	3.62	0.01	0.51	0.79	1.28	60.71
	Li2O_pct	62591	72,117	1.46	1.40	0.96	1.96	0.00	0.26	0.95	2.40	7.14
	MnO_pct	54604	58,217	0.10	0.14	1.43	0.02	0.00	0.04	0.06	0.10	3.81
	Na2O_pct	63880	73,713	3.28	2.25	0.69	5.08	0.00	1.51	2.78	4.64	20.78
	P2O5_pct	62066	71,185	0.38	0.56	1.46	0.31	0.00	0.15	0.24	0.37	10.56
	SG_d	1528	1,387	2.76	0.14	0.05	0.02	1.59	2.66	2.75	2.87	3.79
	SiO2_pct	54604	58,217	72.22	5.68	0.08	32.25	18.51	69.86	72.96	75.35	97.39
	SnO2_pct	64809	74,879	0.05	0.07	1.52	0.00	0.00	0.01	0.03	0.05	3.53
	Ta2O5_pct	66318	77,329	0.02	0.02	1.12	0.00	0.00	0.01	0.01	0.02	1.14
RGRC		30804	70,419
	Fe2O3_pct	29292	66,747	1.53	3.35	2.19	11.22	0.03	0.24	0.41	0.78	29.41
	Li2O_pct	29292	66,749	2.55	1.58	0.62	2.50	0.02	1.10	2.72	4.01	6.43
	MnO_pct	29292	66,747	0.05	0.06	1.04	0.00	0.00	0.03	0.04	0.06	2.03
	Na2O_pct	29292	66,747	1.72	1.32	0.77	1.75	0.03	0.70	1.37	2.38	10.33
	P2O5_pct	29292	66,747	0.19	0.16	0.82	0.03	0.00	0.09	0.16	0.26	6.65
	SG_d	0	-
	SiO2_pct	29292	66,747	72.20	5.95	0.08	35.36	33.99	71.38	73.90	75.56	93.61
	SnO2_pct	29292	66,747	0.02	0.03	1.68	0.00	(0.00)	0.01	0.01	0.02	1.75
	Ta2O5_pct	29292	66,747	0.01	0.02	2.00	0.00	0.00	0.00	0.01	0.01	3.19

Source: SRK, 2020

Note: Statistics are length-weighted and reported inside pegmatite geologic wireframe. Intervals may have been split for the purposes of statistical reporting across model domains.


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Source: SRK, 2020

Note: Red holes are RC grade control, Blue are exploration (mixed RC/DDH)

Figure 11-8: Spatial Relationship of RDEX and GC Drilling

Based on these observations, SRK elected to only utilize the RDEX dataset for the purposes of estimation for the resource. Due to the extensive RDEX dataset which is far more spatially representative than the GC dataset, there are no material gains to be had from using the GC data for long term resource estimation purposes, and possible risk due to the clustered nature of the drilling and the observed bias in the GC sampling.

Considering then only the RDEX data, statistics were again reviewed for the data inside the 0.7% Li2O pegmatite domain, and outside, as shown in Table 11-4. Other than expected increases in the Li2O means, and relative decreases in Fe2O3, SRK notes that there also is far more SG data located in the higher grade domains than the lower. Sn and Ta tend to increase in the low-grade domain, consistent with observations of the Li-bearing pegmatites being broadly discrete from the Sn/Ta pegmatites. In general, the statistics support the domaining process by showing them to be geochemically and mineralogically distinct.


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Table 11-4: RDEX Drilling Statistics, by Pegmatite Resource Domain


Name		Count	Length	Mean	Standard Deviation	Coefficient of Variation	Variance	Minimum	Lower Quartile	Median	Upper Quartile	Maximum
High Grade		36,998	43,052
	Fe2O3_pct	35,345	40,292	1.02	1.59	1.57	2.54	0.01	0.46	0.67	1.00	32.35
	Li2O_pct	35,646	40,793	2.32	1.28	0.55	1.64	0.00	1.28	2.14	3.38	7.14
	MnO_pct	29,482	30,289	0.07	0.09	1.37	0.01	0.00	0.03	0.05	0.07	3.13
	Na2O_pct	35,326	40,259	2.29	1.53	0.67	2.35	0.04	1.08	2.04	3.23	20.78
	P2O5_pct	34,484	39,096	0.26	0.30	1.16	0.09	0.00	0.12	0.20	0.29	8.78
	SG_d	1,213	1,109	2.79	0.13	0.05	0.02	1.59	2.71	2.79	2.89	3.62
	SiO2_pct	29,482	30,289	73.15	3.90	0.05	15.22	45.06	71.83	73.71	75.45	95.09
	SnO2_pct	35,143	39,776	0.03	0.03	1.20	0.00	0.00	0.01	0.02	0.03	1.16
	Ta2O5_pct	36,358	41,779	0.01	0.01	1.05	0.00	0.00	0.01	0.01	0.02	1.14
Low Grade		31,068	37,427
	Fe2O3_pct	28,582	33,458	1.66	2.24	1.35	5.00	0.01	0.62	0.99	1.69	60.71
	Li2O_pct	27,053	31,433	0.35	0.40	1.16	0.16	0.00	0.14	0.24	0.40	4.40
	MnO_pct	25,226	28,030	0.13	0.17	1.31	0.03	0.00	0.05	0.08	0.15	3.81
	Na2O_pct	28,663	33,565	4.47	2.40	0.54	5.75	0.00	2.41	4.29	6.45	11.60
	P2O5_pct	27,691	32,200	0.54	0.73	1.37	0.54	0.00	0.20	0.30	0.53	10.56
	SG_d	322	283	2.65	0.12	0.04	0.01	2.28	2.60	2.63	2.67	3.79
	SiO2_pct	25,226	28,030	71.16	7.03	0.10	49.41	18.51	67.70	71.36	75.07	97.39
	SnO2_pct	29,775	35,214	0.07	0.09	1.34	0.01	0.00	0.02	0.05	0.08	3.53
	Ta2O5_pct	30,070	35,662	0.02	0.03	1.03	0.00	0.00	0.01	0.02	0.03	0.59

Source: SRK, 2020

Note: Statistics are length-weighted and reported inside 0.7% Li2O pegmatite shape, and outside. Intervals may have been split for the purposes of statistical reporting across model domains.


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11.2.2Outliers and Compositing

Outlier populations were considered within the Li2O data only. Outliers in this case are values which dramatically exceed the mean of the population and which may have undue influence on the results of estimation. SRK evaluated the populations of data split between the high and low grade domains utilizing log probability plots and a matrix comparison of multiple potential caps to consider impacts on the coefficient of variation, mean, and total lost grade due to capping. The log probability plots, as shown in Figure 11-9 and Figure 11-10 show stable and consistently increasing populations of grade above the 90th percentile, with breaks in the distribution occurring around 5.4 to 5.6% Li2O for the higher grade population, and around 3.3% for the lower grade population. To examine the potential impact of these outliers on the overall estimation, SRK reviewed the grade populations at higher limits to determine if there were consistent groupings or clusters of higher grade data which may need sub-domaining and noted that this was not the case. Higher grades at or above these limits are sparse and scattered throughout the deposit (although generally isolated to the larger higher grade core of the deposit). SRK reviewed outlier impact tables for each domain as well, reviewing the impacts to the overall variance and mean metrics, and noted very limited impact to the Li2O in either case (Table 11-5 and Table 11-6).

SRK selected nominal points of outlier restriction at 5.5% and 3.3% Li2O for the high and low grade populations respectively. SRK did not “cap” or limit the input dataset prior for estimation, but instead applied outlier restrictions on the estimate itself as described in Section 11.2.

Source: SRK, 2020

Figure 11-9: Log Probability Plot – Li2O% High Grade Domain


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Source: SRK, 2020

Figure 11-10: Log Probability Plot – Li2O% Low Grade Domain


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Table 11-5: Outlier Impact Evaluation – High Grade Domain


Column	Cap	Capped	Percentile	Capped%	Lost		Count	Weight	Min	Max	Mean	Total	Variance	CV
					Total%	CV%
Li2O_pct							82688	96819	0.023	6.562	2.707	262049	1.62	0.47
Li2O_pct	6.56	0	100%	0%	0%	0%	82688	96819	0.023	6.562	2.707	262049	1.62	0.47
Li2O_pct	6.00	2	100%	0%	0%	0%	82688	96819	0.023	6	2.707	262047	1.62	0.47
Li2O_pct	5.75	9	99.90%	0.01%	0%	0.01%	82688	96819	0.023	5.75	2.707	262045	1.62	0.47
Li2O_pct	5.50	31	99.90%	0.04%	0%	0.02%	82688	96819	0.023	5.5	2.706	262039	1.62	0.47
Li2O_pct	5.40	45	99.80%	0.10%	0.01%	0.02%	82688	96819	0.023	5.4	2.706	262034	1.61	0.47
Li2O_pct	5.14	202	99.70%	0.20%	0.02%	0.07%	82688	96819	0.023	5.138	2.706	261993	1.61	0.47
Li2O_pct	5.02	343	99.50%	0.40%	0.04%	0.10%	82688	96819	0.023	5.023	2.706	261949	1.61	0.47
Li2O_pct	4.96	480	99.30%	0.60%	0.05%	0.20%	82688	96819	0.023	4.957	2.705	261910	1.61	0.47
Li2O_pct	4.91	618	99.10%	0.70%	0.07%	0.20%	82688	96819	0.023	4.905	2.705	261871	1.61	0.47
Li2O_pct	4.83	966	98.60%	1.20%	0.10%	0.30%	82688	96819	0.023	4.833	2.704	261791	1.6	0.47
Li2O_pct	Li2O_pct > 5.5						31	42.6	5.501	6.562	5.727	243.9	0.08	0.05
Li2O_pct	Li2O_pct <= 5.5						82657	96777	0.023	5.497	2.705	261805	1.61	0.47

Note: Red text highlights applied values.

Source: SRK, 2020

Table 11-6: Outlier Impact Evaluation – Low Grade Domain


Column	Cap	Capped	Percentile	Capped%	Lost		Count	Weight	Min	Max	Mean	Total	Variance	CV
					Total%	CV%
Li2O_pct							43768	42629	0.005	4.993	0.354	15092	0.15	1.08
Li2O_pct	4.20	17	99.90%	0.04%	0.05%	0.40%	43768	42629	0.005	4.2	0.354	15085	0.15	1.08
Li2O_pct	3.77	32	99.90%	0.10%	0.10%	1.10%	43768	42629	0.005	3.77	0.354	15072	0.14	1.07
Li2O_pct	3.30	66	99.80%	0.20%	0.30%	2.30%	43768	42629	0.005	3.3	0.353	15044	0.14	1.06
Li2O_pct	2.98	115	99.70%	0.30%	0.50%	3.60%	43768	42629	0.005	2.977	0.352	15012	0.14	1.04
Li2O_pct	2.75	166	99.60%	0.40%	0.80%	4.90%	43768	42629	0.005	2.746	0.351	14977	0.13	1.03
Li2O_pct	2.51	217	99.50%	0.50%	1.10%	6.30%	43768	42629	0.005	2.514	0.35	14933	0.13	1.02
Li2O_pct	2.42	260	99.40%	0.60%	1.20%	7%	43768	42629	0.005	2.421	0.35	14911	0.12	1.01
Li2O_pct	2.31	304	99.30%	0.70%	1.40%	7.80%	43768	42629	0.005	2.311	0.349	14882	0.12	1
Li2O_pct	2.24	352	99.20%	0.80%	1.50%	8.50%	43768	42629	0.005	2.238	0.349	14858	0.12	0.99
Li2O_pct	2.16	410	99.10%	0.90%	1.70%	9.30%	43768	42629	0.005	2.16	0.348	14829	0.12	0.98
Li2O_pct	Li2O_pct >3.3						66	74.95	3.405	4.993	3.938	295.1	0.21	0.12
Li2O_pct	Li2O_pct <=3.3						43702	42554	0.005	3.291	0.348	14797	0.12	1.01

Note: Red text highlights applied values.

Source: SRK, 2020


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Drilled sample length within the pegmatites was considered for the purposes of understanding the variability of the sample size. Nominally, samples have been collected at 1.5 m intervals for the majority (46.5%) of exploration and development drilling. A comparatively smaller set of samples were collected at intervals between 2.5 m and 3 m (about 30%), with the remaining percentages of samples collected at lengths between or below these populations. Very few samples are taken at lengths longer than 3 m. The histogram distribution of samples within the pegmatite is shown in Figure 11-11. In addition to the distribution of the sample lengths, SRK reviewed the overall relationship between the Li2O grades and the sample length and noted no bias which would insinuate nominally higher grades associated with shorter samples (Figure 11-12).

In order to make the sample support more consistent for the purposes of estimation, as well as to begin scaling up the sample size to approximate a mining unit, SRK elected to composite the drilling to a length of 3 m. A comparison of the distribution of Li2O% in original samples vs. composited data is shown in Figure 11-13. In general, compositing results in a reduction of the overall sample population from 112,336 samples to 57,603 composites, with an incremental decrease in the CV from 0.92 to 0.88.

Source: SRK,2020

Figure 11-11: Histogram of Sample Length within Pegmatite


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Source: SRK, 2020

Figure 11-12: Scatter Plot Li2O% and Sample Length


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Source: SRK,2020

Figure 11-13: Compositing Comparisons – Li2O%

11.2.3Continuity Analysis

SRK conducted continuity analysis of the Li2O grades within the separate resource domains. Although other elements were estimated and utilized geostatistical estimators, only Li2O is relevant for the long-term mineral resource reporting and will be described herein. Other elements which are estimated are utilized for internal conceptual materials typing and are not considered for resource reporting in any way. Continuity analysis was done through the use of conventional semi variogram calculation using a normal scores transform of the input data and was generated in Snowden Supervisor software for import and review to Leapfrog EDGE. Input data was the 3 m composited drilling data within each relative domain. Orientations were determined based on 3D visualization of the trends of mineralization along with variogram maps showing relative orientations of “best” continuity. Variograms were back-transformed from the normal scores for use in Leapfrog EDGE for estimation purposes.


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High Grade Domain

The high-grade domain featured robust variography, with very low nugget effects modeled using the down-hole variogram, and stable experimental variograms out to ranges of 250 to 360 m in the semi-major and major directions respectively. Given the relatively tabular nature of the pegmatite, the minor variogram range is considerably shorter, with a range of about 80 m. This defines an ellipsoid which is generally flattened and oriented along the strike and down dip of the overall pegmatite domain. Individual variograms for the high-grade domain are shown in Figure 11-14.


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Source: SRK, 2020

Figure 11-14: Modeled Variograms – Li2O% - High Grade Domain


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Low Grade Domain

As would be expected, the lower grade domain featured comparably less robust variography. Very low nugget effects modeled using the down-hole variogram, and stable experimental variograms out to ranges of 90 to 125 m in the semi-major and major directions respectively. Given the relatively tabular nature of the pegmatite, the minor variogram range is considerably shorter, with a range of about 20 to 25 m. This defines an ellipsoid which is very flat and oriented along the strike and down dip of the overall pegmatite domain. In general, the Individual variograms for the high grade domain are shown in Figure 11-15. In general, SRK notes that the continuity analysis for both domains is reasonable and is consistent with the geological orientations and expectations of continuity. Variogram outputs for the two domains as utilized in the kriging estimators in EDGE are summarized in Table 11-7.


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Source: SRK,2020

Figure 11-15: Modeled Variograms – Li2O% - Low Grade Domain


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Table 11-7: Li2O Variogram Models


General	Direction						Structure 1						Structure 2
Variogram Name	Dip		Dip Azimuth	Pitch	Model Space	Variance	Nugget	Sill	Structure	Alpha	Major	Semi- Major	Minor	Sill	Structure	Alpha	Major	Semi- Major
Li2O_pct HG: Transformed Variogram Model Li2O HG	45	260	5	Normal score	1	0.05	0.48	Spheroidal	3	66	41	63	0.47	Spheroidal	3	360	250	85
Li2O_pct LG: Transformed Variogram Model Li2O LG	45	260	45	Normal score	1	0.08	0.4794	Spheroidal	3	25	30	20	0.18	Spherical		122.1	95	22

Source: SRK,2020


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11.3Mineral Resources Estimates

The geological model and block model discussed herein remains based on information which has not materially changed since disclosure on June 30, 2020. SRK notes that very limited additional drilling has been added to Central Lode in the subsequent 12 months, and as of the effective date of June 30, 2021, no update to the MRE was conducted due to lack of material change. SRK was provided with the additional drilling information and, based on review of the likely changes to the global mineral resource statement, noted changes less than 0.5% to tonnes and Li2O grades assuming the same processes discussed herein updated with the additional data. As of the effective date of this report, the nearby Kapanga deposit has not been incorporated into this mineral resource estimate, as data collection and technical work supporting disclosure of this area was still in progress.

The mineral resource statement based on this model has been updated to reflect revised pit optimization parameters for the June 30, 2021 effective date. These may reflect adjustments in economics, pit slope angles, or other factors which have not modified the June 30, 2020 input data such as drilling, geology models, or block models.

The MRE was completed using Leapfrog EDGE, although inputs and analysis may have been conducted in other software such as Snowden Supervisor or Phinar X10 Geo. SRK notes that there is an extensive history of MREs, mineral reserve estimates, and production at Greenbushes, and that the SRK estimate is considered in that context.

11.3.1Quantitative Kriging Neighborhood Analysis (QKNA)

QKNA was utilized to assess potential impacts and sensitivity of estimation parameters such as block size, sample selection, and search distances. While QKNA is not the definitive measure of what parameters must be, it is a useful data point in gauging the potential sensitivity of the estimation to these parameters. In general, QKNA evaluates the impact of varying aforementioned parameters, but bases the sensitivity on outputs to the kriging efficiency (KE) and slope of regression (SoR) averages for the estimate. KE and SoR are commonly referred to as measures of the relative quality of the estimate and are dependent on the input variogram. SRK evaluated the impacts to the KE and SoR for multiple scenarios evaluating block size, sample selection, and search range as shown in Figure 11-16, Figure 11-17, and Figure 11-18 respectively.

In general, SRK notes that the QKNA suggests an optimum block size (of those tested) of 15 x 15 x 15 m, sample selection criteria of between 4 and 20 samples, and effectively a negligible impact to estimation quality based on the search ranges tested. Search ranges considered were done in +/-25% increments oscillating around a base case of the high-grade total variogram range.


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Source: SRK,2020

Figure 11-16: QKNA Block Size Sensitivity


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Source: SRK,2020

Figure 11-17: QKNA Sample Selection Sensitivity


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Source: SRK,2020

Figure 11-18: QKNA Search Range Sensitivity

11.3.2Variable Orientation Modeling

Despite the need to calculate and model continuity analysis using variograms, which are oriented in a specific direction, it is clear from geological modeling and previous mining that the pegmatite anastomoses and shifts orientation at local scales. To incorporate this geological variance into the estimation (thereby producing a more accurate estimate) SRK incorporated a number of geological features from the 3D model into a variable orientation model. This effectively calculates an orientation to be used for estimation searches from the input wireframes. Wireframes in this case are based on the interpolated structural data for overall pegmatite trends, as shown in Figure 11-19. Outputs from this process are individual search orientations for each block based on the relative proximity of the block itself to the surfaces. Blocks which are external to the modeled surfaces take on the overall variogram orientation from continuity analysis. The kriging ellipse is also re-oriented for blocks based on the variable orientation model.


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Source: SRK, 2020

Figure 11-19: Structural Planes Utilized for Variable Orientation Modeling

11.3.3Block Model

SRK created a block model for interpolation purposes in Leapfrog EDGE. As shown in Figure 11-20, the block model encompasses the geological model for the pegmatite, as well as the current pit area. The model is sub-blocked, with parent cells at a 15 by 15 by 15 m block divided into 5 by 5 by 3 m blocks along geological or topographic (pit) boundaries. Detailed parameters for the block model are summarized in Table 11-8. The block model was exported to csv and imported to Vulcan (bmf) format for mine planning and pit optimization work.


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Source: SRK, 2020

Figure 11-20: Block Model Extents/Parameters

Table 11-8: Block Model Details


Base point:			8650, 9350, 1400
Parent block size:			15 × 15 × 15
Dip:			0°
Azimuth:			0°
Boundary size:			2085 × 4200 × 900
Sub-blocking:			3 × 3 × 5
Total blocks:			11,692,460
Number of parent blocks:			139 × 280 × 60 = 2,335,200
Number split:			212,665 (9.1%)
Number of sub-blocks:			9,569,925
Minimum sub-block height:			3
Bounding Box:
Minimum:			8650, 9350, 500
Maximum:			1.074e+04, 1.355e+04, 1400
Sub-blocking is triggered by:
Greenbushes_SRK_IS			Volume boundaries
Reporting_010720 Pits			Volume boundaries

Source: SRK, 2020


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11.3.4Grade Interpolation

Grades were interpolated from the composited drilling data for Li2O using Leapfrog EDGE. A nested two-pass estimation was designed to accomplish estimation in a first pass from more sampling, at higher data densities, with more restrictions on estimation methodology in the initial passes. Ordinary kriging (OK) was utilized for interpolation of grade. Estimation parameters are based on overall Li2O variogram ranges within the high grade domain, with ranges in the first pass being approximately 50% of the total range (about 80% of the variance) and the second pass being the full range of the variogram. Other estimation parameters were selected based on initial assessments of the QKNA results and were refined based on iterative reviews of the visual, statistical, and reconciliation validation efforts.

Orientations for searches are variable using the variable orientation modeling parameters as noted in Section 11.3.2. Outliers are dealt with through the use of the “clamping” modifier in EDGE. This limits the extent to which an outlier grade is utilized over a smaller range than the actual search (defined as a percentage of the ellipsoid ranges). SRK utilized a 5.5% Li2O and 3.3%Li2O threshold over 5% of the search distance for each pass. SRK also utilized sector limitations (quadrants) for the first pass of estimation to ensure that data was pulled from multiple locations rather than clustered from groups of closely-spaced data. To further ensure this, a restriction of a maximum of two samples per hole was utilized. This, combined with the five sample minimum for the first pass, resulted in the first estimation pass using no fewer than three drillholes. The second estimation pass significantly reduces the overall restrictions by expanding the search, reducing the overall minimum of samples, and eliminating the sector requirements.


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Table 11-9: Li2O Estimation Parameters


General			Ellipsoid Ranges (m)			Variable Orientation	Number of Samples		Outlier Restrictions			Sector Search			Drillhole Limit, Max Samples per Hole
Name	Domain	Values	Maximum	Intermediate	Minimum		Minimum	Maximum	Method	Distance	Threshold	Method	Max Samples	Max Empty Sectors
Kr, Li2O_pct HG P1 RDEX	Li2O_pct Indicator 0.7 100 0.50: Inside	Li2O_pct	180	150	25	VO_Li_PEG	5	15	Clamp	5	5.55	Quadrant	5	1	2
Kr, Li2O_pct HG P2 RDEX	Li2O_pct Indicator 0.7 100 0.50: Inside	Li2O_pct	360	250	50	VO_Li_PEG	1	15	Clamp	2.5	5.55				2
Kr, Li2O_pct LG P1 RDEX	Li2O_pct Indicator 0.7 100 0.50: Outside	Li2O_pct	180	125	25	VO_Li_PEG	5	15	Clamp	5	3.3	Quadrant	5	1	2
Kr, Li2O_pct LG P2 RDEX	Li2O_pct Indicator 0.7 100 0.50: Outside	Li2O_pct	360	250	50	VO_Li_PEG	1	15	Clamp	2.5	3.3				2

Source: SRK, 2020


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11.3.5Validation

The interpolation of grade was validated through a series of checks on the visual and statistical distribution of grades compared to the input composite data. Visual grade distribution on section and level plans was reviewed carefully across the entire estimate to ensure that grades compared well to composite date and that the geological trends were being honored. An example of this comparison is shown in Figure 11-21. Statistical comparison of the individual domain estimates to the input composite data shows excellent agreement globally (Table 11-10 and Table 11-11). To evaluate a localized statistical comparison, SRK produced swath plots. These plots evaluate the means of blocks and composites along swaths or slices through the model oriented along the NS, EW, and elevation axes. In general, these plots show excellent local agreement of the composites and blocks along slices, an example of which is shown in Figure 11-22. These plots were created for each axis in each domain.


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Source: SRK, 2020

Figure 11-21: Visual Comparison of Li2O Distribution


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Table 11-10: Statistical Comparison Li2O% – High Grade Domain


	Composites	Blocks
Count	50,937	425,803
Length	46,649	71,063,325
Mean	2.09	1.99
SD	1.26	0.85
CV	0.60	0.43
Variance	1.59	0.73
Minimum	0.02	0.14
Q1	1.08	1.34
Q2	1.90	1.83
Q3	3.04	2.53
Maximum	6.56	4.89

Source: SRK, 2020

Table 11-11: Statistical Comparison Li2O% – Low Grade Domain


	Composites	Blocks
Count	43,267	276,735
Length	38,180	55,880,325
Mean	0.55	0.45
SD	0.65	0.33
CV	1.18	0.72
Variance	0.42	0.11
Minimum	0.01	0.03
Q1	0.18	0.23
Q2	0.30	0.35
Q3	0.62	0.58
Maximum	4.94	2.97

Source: SRK, 2020


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Source: SRK, 2020

Figure 11-22: Swath Plot – Li2O% – High Grade Domain

11.3.6Depletion

The SRK block model is limited at surface by a 2008 topographic survey. SRK chose to estimate blocks above the current June 30, 2020 topography in order to better assess the accuracy of the estimate through reconciling to previous production periods. Additional models were developed for use in reconciliation and reporting. They included a depletion model built around available end-of-year mined topography surfaces from 2008 through 2020. The differences between annual mining surfaces were used to generate volumes for depleting the model to the end of June 2020 production period.

In addition to the open-pit depletion, SRK used surveyed underground voids from the previous tantalum mining operation at depth in the C3 area to deplete density in the model. This was done via a 1 m distance buffer around a combined void wireframe to account for potential inaccuracy in the survey of the wireframes, and due to closure/consistency issues in the survey wireframes themselves. This underground depletion affects density assignment in blocks for both the mineral resource and the mineral reserve, although overall impacts are minimal.


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Source: SRK, 2020

Shown are June 30, 2020 mine topography (yellow) and 1m distance buffer around underground mining/development (red).

Figure 11-23: Depletion Surfaces/Volumes

11.3.7Bulk Density

SRK was provided with specific gravity data (SG) from 2,074 samples taken from Pegmatite, Amphibolite, Granofels, and Dolerite rock types. Descriptive statistics for the SG from these rock types is shown in Table 11-12. To assign bulk density to the block model, mean SG was coded into the waste rocks based on the data provided. Alluvial and fill material were assigned a nominal density of 1.8 g/cm3 and 1.5 g/cm3 based on reasonable average densities for these unconsolidated material types. For the pegmatite, Talison has previously utilized a regression analysis of the Li2O content to accurately calculate bulk density. This is developed from the pegmatite SG sampling and the extensive production history of the mine. The calculation of density for pegmatite is shown below:

Density (Pegmatite) = 0.071 * (Li2O) + 2.59

Bulk densities were assigned those values as shown in Table 11-12. SRK considers the assignment of mean densities of the waste rocks reasonable, and the determination of the regression analysis for the Li2O/SG relationship appropriate given its reliable use in production tracking and reporting as stated by Talison. All bulk densities are assumed to relate equally to SG for this study, with assumption of negligible moisture content in the hard rock at the time of blasting and mining.


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Table 11-12: SG Data by Rock Type – Bulk Density Assignment


	Model Bulk Density (g/cm3)	Count	Length	Mean SG	Standard Deviation	Coefficient of Variation	Variance	Minimum	Maximum
Rock Type		2074	1,819.44	2.81	0.17	0.06	0.03	1.59	3.98
A	3.03	254	206.97	3.03	0.13	0.04	0.02	2.38	3.98
D	2.98	198	149.31	2.98	0.15	0.05	0.02	2.53	3.71
G	2.93	91	73.32	2.93	0.17	0.06	0.03	2.60	3.17
P	Variable	1528	1,387.20	2.76	0.14	0.05	0.02	1.59	3.79
Alluvial	1.8	NA
Fill	1.5	NA

Source: SRK, 2020

The June 30 stockpile tonnes are the surveyed volume by the bulk density adjusted from survey date and time up to 30th June with crusher weightometer throughput (tonnes) and truck movements and distribution of oversize which is allocated an average bulk density of 1.8 g/cm3. Bulk densities are actually a range within the stockpiles of between 1.6 and 2.2 g/cm3.

11.3.8Reconciliation

As a final validation, SRK compared the tonnes and grades estimated in this model to annual production from the 2017, 2018, and 2019 periods. Talison produces annual end of year pit surfaces which were used to flag the production periods in the block model and compare against the documented production from those periods. This comparison is generally dependent on the quality of the reconciliation done by site, and can be influenced by materials handling, stockpile movement, and operational challenges which locally may make the comparisons difficult. Talison noted instances where reconciliation to production was made difficult due to these types of factors.

SRK reviewed the reconciliation for the trucked material and utilized this as the comparison data set. In this type of reconciliation, the grades are assigned based on the very close-spaced blast holes, with tonnage developed from truck counts from the mined area. Compared to the mill reconciliation, which considers additional stockpile material being fed into the plant at various times, SRK is of the opinion that the trucked reconciliation data is the best representation of the material physically removed over the production periods. This comparison was used for iterative review of the resource model in combination with the previously mentioned validation checks and drove the parameters for estimation to bring the ranges relatively closer. Final comparisons of the SRK model to the mined tonnage over the production periods is summarized in Table 11-13. SRK noted very reasonable performance of the current mineral resource estimation against the reconciled production periods.


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Table 11-13: Model – Mined Reconciliation Results


	Tonnes	Grade
Model - 2017 Period	1,669,973	2.88
2017 Reconciled Mining	1,628,678	2.79
2017 Comparison	98%	107%
Model - 2018 Period	2,167,546	2.86
2018 Reconciled Mining	2,101,191	2.77
2018 Comparison	97%	97%
Model - 2019 Period	2,722,671	2.80
2019 Reconciled Mining	2,505,984	2.83
2019 Comparison	92%	101%

Source: SRK/Talison, 2020

11.3.9Resource Classification and Criteria

SRK has made all reasonable efforts to model the geological complexity and estimate the mineral resources at a high level of detail, but the uncertainty with these factors and how they affect the mining and processing of pegmatites is known to be best assessed at the grade-control scale of modeling. The mineral resources at the global scale are stated as Indicated and Inferred categories to convey the confidence in the geological continuity and grade consistency in the pegmatite.

To assess this relative confidence, SRK considered a number of factors in the classification scheme. SRK considered the number of drill holes used in the estimate, the average distances to the informing composites, and the slope of regression (SoR) as a measure of relative accuracy of the estimate as inputs to a script-based classification of the resource. SoR ranges were considered based on histogram reviews of the SoR within the relevant domains, visual reviews of SoR consistency in the estimated domain, and iterative processing of the script to best coalesce the higher confidence blocks around higher densities of drilling and more robust grade continuity. This script was run on a block-by-block basis, with results reviewed against the drilling and modeling to assess how well it characterized confidence in the estimate. Subsequent to this, SRK digitized polylines and generated smoothed classification wirefames which dealt with edge effects and artifacts noted in the scripted classification. The general criteria for defining Indicated in the script is shown below. A graphical example of this process is shown in Figure 11-24. All resources estimated within the pegmatite which were not categorized as Indicated were assigned an Inferred category.

•Indicated resources

◦High Grade Domain

–>=Three Drillholes

–Average Distance of <= 180 m

–SoR >= 0.5

◦Low Grade Domain

–>=Three Drillholes

–Average Distance of <= 40 m

–SoR >= 0.2


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Source: SRK, 2020

Figure 11-24: Classification Process

11.4Cut-Off Grades Estimates

The cut-off grade determination is based on assumptions and actual performance of the Greenbushes operation. Concentrate attributes and production cost inputs to the cut-off calculation are presented in in Table 11-14. Recovery of a 6% Li2O concentrate is based on the previously noted weight recovery calculations from actual operational data.

Pricing was assumed based on a review of historic price trends for the assumed product (spodumene concentrate), taking into account a strategy of utilizing a higher resource price than would be used for a reserve estimate. This pricing was discussed with Albemarle and is consistent with resource pricing scenarios developed for other spodumene concentrate operations. Mineral resources were estimated based on a spodumene concentrate sales price of US$750/t of


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concentrate CIF China (or US$672/t of concentrate at the mine gate after deducting transportation costs and government royalty).

Considering these costs, recovery and pricing scenarios, SRK derived a resource CoG of 0.573% Li2O. A nominal CoG of at least 0.5% has been assumed for the stockpile material, although SRK notes it is generally used to augment other material types for processing during active mining.

Table 11-14: Cut-Off Grade Calculation for Resources


Revenue	Units	Value
Cut-Off Grade	Li2O%	0.573
Mass Yield	t of 6% Li2O Concentrate	0.045
Price at Mine Gate	US$/t of 6% Li2O Concentrate	671.69
Total Revenue	US$/t-RoM	30.19
Costs
Incremental Ore Mining	US$/t-RoM	4.75
Processing	US$/t-RoM	17.87
G&A	US$/t-RoM	4.91
Sustaining Capital	US$/t-RoM	2.66
Total Cost	US$/t-RoM	30.19

Notes:

•Mass yield is based on Greenbushes’ mass yield formula and varies by plant. The CGP1 LoM average of 29.49% but is subject to a 97% recovery limitation when the lithium oxide grade exceeds 5.5%. Mass yield varies as a function of grade, and may be reported herein at lower mass yields than the CGP1 average.

•Incremental ore mining costs include RoM loader, rehandle from long-term stockpiles, grade control assays, and rock breaker.

Source: SRK, 2021

11.5Reasonable Potential for Eventual Economic Extraction (RPEEE)

SRK constrained the statement of mineral resources to within an optimized pit shell produced in Maptek Vulcan using the internal LG algorithm calculations. The optimized pit is designed to consider the ability of the “ore” tonnes to pay for the “waste” tonnes based on the input economics. The result is a surface or volume which constrains the resource but provides the RPEEE at the resource pricing revenue factor while utilizing the current reserve pricing for overall inputs. Pit optimization inputs are noted as follows:

•Reserve based 6% Li2O concentrate price of US$577/t (mine gate)

•Revenue Factor of 1.30 = US$759/t Li2O concentrate pricing (mine gate)

◦30% premium to reserve price and comparable with US$672/t resource price (mine gate).

•CGP1 weight recovery (mass yield) is based on Greenbushes’ mass yield formula with a LoM mass yield assumption of 29.49%. Mass yield varies as a function of grade, and may be reported herein at lower mass yields than the CGP1 average.

•Pit slope (50 degrees on the west wall and 39 degrees on the east wall)

•0% mining dilution, 100% mining recovery

•US$ 4.75/t mining cost, US$ 17.87/t processing cost, US$ 4.91/t G&A cost, and US$ 2.66/t sustaining capital cost.

The resource pit is then used as a reporting limit to exclude all tonnes from reporting which sit external to this pit shape. SRK notes that the mineral reserve (Section 12) is constrained by a reserve pit. This reserve pit generally sits within the resource pit, although it locally extends beyond


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the limits of the resource pit due to design constraints such as ramps. SRK also notes that the optimized pit for resource reporting is not limited by boundaries for mining infrastructure, and that no capital costs for movement or replacement of this infrastructure are assumed.

The mineral resource estimate also includes stockpile material which has been previously mined at CoG’s between 0.5 and 0.7% Li2O and which are variable in Li2O grades or characteristics. This material is crushed and stored at surface, handled by shovels and trucks, and integrated into the materials stream for production purposes based on operational requirements.

11.6Uncertainty

As a baseline consideration for uncertainty and how it is discussed in this report, SRK notes that Greenbushes is an operating mine with a long history and extensive experience with the exploration, definition, and conversion of mineral resources to reserves which have been mined profitably. SRK has assessed the relative uncertainty in the estimation of mineral resources for Greenbushes in a number of ways, chief of which is the use of mineral resource classification.

SRK considered a number of factors of uncertainty in the classification of the MRE. Most importantly, no Measured resources are stated despite the long production history and extensive detailed drilling/mapping. The overall long-term resources for Greenbushes do not satisfy the requirement to support detailed mine planning and “final” evaluation of the economic viability of the deposit. Further, again despite the long production history, mineralization appropriate for feed to the technical grade plant is not quantified. Reasons for this are as follows:

•The geological and inherent local variability of grade within the pegmatite body is highly variable in areas, and difficult to characterize to a Measured degree of certainty for a global mineral resource.

•The potential for dolerite dikes or blocks of waste rock to be incorporated into the pegmatite, and for these small-scale features which are not as well-modeled at the global scale to significantly contaminate the pegmatite (Fe2O3).

•Lack of long-term confidence in the definition of mineralization appropriate to produce higher value products such as technical grade concentrates. Greenbushes consistently produces technical grade concentrates, which, on average, sell at a higher price than chemical grade concentrate and features a separate recovery facility. However, the detail needed to define this material typically happens at the mining blast hole scale and is thus not reported in the long-term resource estimation.

•At present there is a lack of a detailed structural model incorporating brittle structures into the geological model. Although these are not noted to be significant in terms of resource constraints, offsets, or controls, they are likely material to the geotechnical parameters used for pit design and should be modeled.

These geological factors are relevant to the overall confidence in the distribution of the pegmatites as well as the grade continuity internal to them, and do not satisfy the definition of Measured resources at a long-term scale as reported herein. Greenbushes accounts for this variability operationally through detailed grade control drilling in near-term production areas, logging and sampling of blast holes for integration into short range planning, selective mining of the orebody, and ore-sorting at the crusher to limit inputs from waste rock.


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Indicated resources are those which are defined at a sufficient level of confidence to assume geological and grade continuity between points of observation. SRK notes that this characterizes the majority of the detailed drilling/sampling at Greenbushes, and that the modeling effort has been designed to incorporate all relevant geological information which supports these assumptions Confidence assumptions built into the designation of Indicated mineral resources are based on geological consistency as noted through cross section and level plan view reviews, 3D observations of the modeling, similarity in drilling characteristics and thicknesses, and estimation quality metrics.

Uncertainty regarding lack of evidence for geological or grade continuity at the levels of the Indicated mineral resources is dealt with by categorizing this material as Inferred. In general, this typically suggests lack of continuity from at least two drillholes, very deep extents of mineralization, very high internal variance of Li2O grades (as determined through estimation quality metrics), or other factors. In short, there is sufficient evidence to imply geological or grade continuity for this material, but insufficient to verify this continuity. Inferred resources do not convert to mineral reserves during the reserve estimation process and are treated as waste.

Economic uncertainty associated with the resources is mitigated to a large degree by the nature of the Greenbushes mine functioning for many years, as well as the reasonable application of both a pit optimization and CoG assumptions for reporting. As a part of this resource statement, SRK has not considered all potentially relevant factors to uncertainty with the development of the open pit mining operation, including changes to geotechnical parameters, hydrogeological parameters, infrastructure movement, However, SRK has provided sensitivity tables and graphs for the mineral resources in the next section.

11.7Summary Mineral Resources

SRK has reported the mineral resources for Greenbushes in multiple formats to demonstrate sensitivity to reporting criteria and clarify sources of material. The tables below are not aggregate, and each is an independent perspective on the resources. The Greenbushes resources are stated generally as in-situ (hard rock within an economic pit shell) and stockpile (blasted and mined, stored at surface as crushed material).

•Mineral Resources Exclusive of Reserves. Table 11-15 shows the mineral resources exclusive of reserves. Resource Pit material is contained within the resource pit shell but is external to the designed reserve pit. The Reserve Pit material includes that material which reports within the designed reserve pit, but which does not meet the reserve cut-off, or that material within the reserve pit which is Inferred. The stockpile material which is Measured or Indicated has reported to the reserves, and so the only stockpile material contributing to this resource is taken from the Inferred category.

•In-situ Mineral Resources Inclusive of Reserves. Table 11-16 shows the mineral resources inclusive of the mineral reserve and is comparable to previous reporting standards such as NI 43-101 and the JORC code. This includes all un-mined material which sits in either the resource pit or the reserve pit. As shown in Table 11-16, the majority of the resource is converted to reserve.

•Stockpile Mineral Resources Inclusive of Reserves. Table 11-17 shows the mineral resource contained within stockpiles, reported inclusive of the reserve stockpiles. Effectively, this


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includes the Measured and Indicated stockpiles in addition to the Inferred stockpiles included in Table 11-15.

SRK notes that this is not a multiple commodity resource. The only relevant commodity of interest for the current operation is Li2O in the form of spodumene concentrate. Although, other elements have been estimated for the purposes of downstream materials typing or characterization, in the opinion of the QP, none are considered deleterious to the point of exclusion from the mineral resources, and none are considered to be a co-product or by product with economic value for the purposes of reporting.

Table 11-15: Greenbushes Summary Mineral Resources Exclusive of Mineral Reserves as of June 30, 2021 Based on US$672/t of Concentrate at Mine Gate– SRK Consulting (U.S.), Inc.


Area	Category	100% Tonnes (Mt)	Attributable Tonnes (Mt)	Li2O (%)	Cut-Off (% Li2O)	Mass Yield	100% Concentrate Tonnes @ 6.0% Li2O (Mt)	Attributable Concentrate Tonnes @ 6% Li2O (Mt)
Resource Pit 2021	Indicated	31.8	15.6	1.54	0.57	17.2%	5.5	2.7
	Inferred	23.9	11.7	1.05	0.57	10.3%	2.5	1.2
Reserve Pit 2021 *	Indicated	2.6	1.3	0.64	0.57-0.70	5.2%	0.1	0.1
	Inferred	16.8	8.2	1.05	0.57-0.70	10.4%	1.8	0.9
Stockpiles	Inferred	0.3	0.1	1.40	0.50	15.0%	0.04	0.02

Source: SRK, 2021

•Albemarle’s attributable portion of mineral resources and reserves is 49%.

•Mineral resources are reported exclusive of ore reserves. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

•Resources have been reported as in situ (hard rock within optimized pit shell) and stockpile (mined and stored on surface as blasted/crushed material).

•Resources which are contained within the mineral reserve pit design may be excluded from reserves due to an Inferred classification or because they sit in the incremental CoG range between the resource and reserve CoG. They are disclosed separately from the resources contained within the Resource Pit. There is reasonable expectation that some Inferred resources within the mineral reserve pit design may be converted to higher confidence materials with additional drilling and exploration effort.

•All Measured and Indicated Stockpile resources have been converted to mineral reserves.

•Mineral resources are reported considering a nominal set of assumptions for reporting purposes:

◦Mass Yields for chemical grade material are based on Greenbushes’ CGP1 feed mass yield formula. For the LoM material, mass yield is assumed at 29.49% and is subject to a 97% recovery limitation when the lithium oxide grade exceeds 5.5%. Mass yield varies as a function of grade, and may be reported herein at lower mass yields than the CGP1 average.

◦Costs estimated in Australian Dollars were converted to US Dollars based on an exchange rate of 0.76AU$:1.00US$.

◦These economics define a CoG of 0.573% Li2O.

◦An overall 43% pit slope angle, 0% mining dilution, and 100% mining recovery.

◦Resources were reported above this 0.573% Li2O CoG and are constrained by an optimized break-even pit shell.

◦No infrastructure movement capital costs have been added to the optimization.

◦Stockpile resources have been previously mined between nominal CoG’s of 0.5 to 0.7% Li2O.

•Mineral resources tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding.

•SRK Consulting (U.S.) Inc. is responsible for the mineral resources with an effective date: June 30, 2021.


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Table 11-16: Greenbushes Summary In Situ Mineral Resources Inclusive of Mineral Reserves as of June 30, 2021 Based on US$672 of Concentrate at Mine Gate– SRK Consulting (U.S.), Inc.


Category	100% Tonnes (Mt)	Attributable Tonnes (Mt)	Li2O (%)	Cut-Off (% Li2O)	Mass Yield (%)
Indicated	171.5	84.0	1.89	0.57	22.7
Inferred	41.0	20.1	1.07	0.57	10.2

Source: SRK, 2021

•Albemarle’s attributable portion of mineral resources and reserves is 49%.

•Mineral resources are reported inclusive of ore reserves. Mineral resources are not ore reserves and do not have demonstrated economic viability.

•Resources have been reported as in situ (hard rock within optimized pit shell).

•In-situ mineral resources are reported considering a nominal set of assumptions for reporting purposes:

◦The mass yield (MY) for reserves processed through the chemical grade plants is estimated by the Greenbushes CGP1 yield equation, but is subject to a 97% recovery limitation when the lithium oxide grade exceeds 5.5%.

◦Costs estimated in Australian Dollars were converted to US Dollars based on an exchange rate of 0.76AU$:1.00US$.

◦These economics, and the internal constraints of the current lithium operations, define a CoG of 0.573% Li2O.

◦An overall 43% pit slope angle, 0% mining dilution, and 100% mining recovery.

◦Resources were reported above this 0.573% Li2O CoG and are constrained by an optimized break-even pit shell

◦No infrastructure movement capital costs have been added to the optimization.

▪Mineral resources tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding.

▪SRK Consulting (U.S.) Inc. is responsible for the mineral resources with an effective date: June 30, 2021.

Table 11-17: Greenbushes Summary Stockpile Mineral Resources Inclusive of Mineral Reserves as of June 30, 2021 – SRK Consulting (U.S.), Inc.


Category	100% Tonnes (Kt)	Attributable Tonnes (Kt)	Li2O (%)	Cut-Off (%)	Mass Yield
Measured	360	176	1.60	0.5%	Variable
Indicated	4,234	2,075	1.30	0.5%	Variable
Measured + Indicated	4,294	2,251	1.30	0.5%	Variable
Inferred	289	142	1.40	0.5%	Variable

Source: SRK, 2021

•Albemarle’s attributable portion of mineral resources and reserves is 49%.

•Mineral resources are reported inclusive of ore reserves. Mineral resources are not ore reserves and do not have demonstrated economic viability.

•Resources have been reported as stockpile (mined and stored on surface as blasted/crushed material).

•Mass Yields for stockpile material are variable but are generally assumed to follow the Greenbushes chemical grade yield equation for CGP1 that results in an average LoM mass yield assumption of 29.49%.

•Mineral resources tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding.

•SRK Consulting (U.S.) Inc. is responsible for the mineral resources with an effective date: June 30, 2021.

11.7.1Mineral Resource Sensitivity

The primary sensitivities of the mineral resource as stated are costs, pricing, geotechnical factors, and weight recovery. A number of scenarios (Table 11-18) were developed to show the pit optimization variances at lower pricing scenarios (revenue factors). Note that these numbers may not exactly add to disclosed resource figures, as variable costs were utilized for the production of these


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figures, whereas resource reporting uses a fixed CoG. Sensitivities to variable geotechnical parameters (pit slope angles) have not been incorporated into this sensitivity.

Table 11-18: Pit Scenario Table – Greenbushes Mineral Resources


Pit	Rev Factor	Sell Price (US$)	Total Tonnes (Mt)	Indicated Tonnes (Mt)	Inferred Tonnes (Mt)	Spod Conc. Tonnes 6% (Mt)
1	0.3	$175	124	48	2	16
2	0.35	$204	168	61	3	19
3	0.4	$234	232	78	4	23
4	0.45	$263	263	86	5	25
5	0.5	$292	337	100	7	28
6	0.55	$321	378	107	8	29
7	0.6	$350	525	127	12	33
8	0.65	$380	589	134	14	35
9	0.7	$409	651	141	15	36
10	0.75	$438	707	146	16	37
11	0.8	$467	742	149	18	38
12	0.85	$496	785	153	19	39
13	0.9	$525	869	159	23	40
14	0.95	$555	966	165	29	42
15	1	$584	1,013	168	32	43
16	1.05	$613	1,055	170	35	43
17	1.1	$642	1,074	170	37	43
18	1.15	$671	1,130	172	39	44
19	1.2	$701	1,146	173	39	44
20	1.25	$730	1,208	175	42	45
21	1.3	$759	1,233	176	43	45

Source: SRK, 2021

•Mineral resources are reported inclusive of ore reserves and are disclosed here on a 100% (not attributable) basis. Mineral resources are not ore reserves and do not have demonstrated economic viability.

•Numbers reported here may not exactly match static resource tabulation due to the application of a continuously variance cost model for certain operational costs assumed in the pit optimization process.

•Variable mining costs are applied as the pit gets deeper and the cutoff is increased.

Note: Resource case.

To evaluate the sensitivity of the mineral resource to economic factors within the pit, SRK reported the resources contained within the resource pit (inclusive of reserves) at various cut-offs as shown in Table 11-19. This shows the overall sensitivity of the resource to the combined economic factors which constitute the CoG but is limited to not being able to show the impact to individual factors which comprise the CoG. SRK notes that, due to the relatively higher grades of the Greenbushes pegmatite, that there are relatively limited impacts to the overall resource within reasonable ranges of the 0.564% Li2O CoG.


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Table 11-19: Grade Tonnage – Pit-Constrained Mineral Resources Inclusive of Reserves


Cut-Off Grade (g/t)	Tonnes ≥ Cut-Off (Millions)	Average Grade ≥ Cut-Off (g/t)
0.05	271	1.43
0.10	271	1.43
0.15	270	1.44
0.20	264	1.47
0.25	255	1.51
0.30	247	1.55
0.35	239	1.59
0.40	232	1.63
0.45	226	1.66
0.50	220	1.69
0.55	214	1.72
0.60	208	1.75
0.65	203	1.78
0.70	199	1.81
0.75	195	1.83
0.80	190	1.86
0.85	185	1.89
0.90	180	1.91
0.95	175	1.94
1.00	170	1.97
1.05	166	1.99
1.10	161	2.02
1.15	155	2.06
1.20	149	2.09
1.25	144	2.12
1.30	138	2.16
1.35	132	2.19
1.40	127	2.23
1.45	121	2.27
1.50	115	2.31
1.55	109	2.35
1.60	104	2.39
1.65	99	2.43
1.70	94	2.47
1.75	89	2.51
1.80	84	2.55
1.85	80	2.59
1.90	75	2.64
1.95	71	2.68
2.00	68	2.71

Source: SRK, 2021

Mineral resources are reported inclusive of ore reserves. Mineral resources are not ore reserves and do not have demonstrated economic viability.

11.8Opinion on Influence for Economic Extraction

SRK notes that the influence of the pit shell on the resource is significant, as resources exist external to the shell. It is possible that additional resources could be developed with realization of higher commodities pricing, lower costs, as well as additional exploration. No boundaries or limitations were placed on the pit optimization scenario to account for infrastructure movement or other surface disturbance considerations, as these are considered modifying factors which are relevant to the mineral reserves. SRK is of the opinion that all relevant factors to the RPEEE of mineral resources have been considered as a part of this study.


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12Mineral Reserve Estimates

The conversion of mineral resources to mineral reserves has been completed in accordance with SEC regulations CFR 17, Part 229 (S-K 1300). Mineral reserves were estimated based on a spodumene concentrate sales price of US$650/t of concentrate CIF China (or US$577/t of concentrate at the mine gate). The mineral reserves are based on PFS level study as defined in §229.1300 et seq.

The mineral reserve calculations for the Greenbushes Central Lode lithium deposit have been carried out by a Qualified Person as defined in §229.1300 et seq. SRK is responsible for the mineral reserves reported herein.

12.1Key Assumptions, Parameters, and Methods Used

The key mine design assumptions, parameters and methods are summarized as follows.

12.1.1Resource Model and Selective Mining Unit

The in situ mineral resources are based on the SRK block model as described in Section 11 of this report, including appropriate mining depletion as described in Section 11.2.6. The SRK block model is depleted to June 30, 2021. The SRK block model was used without modification, as the subblock size in the model matches the selective mining unit (SMU) size that was adopted for mine planning purposes.

12.1.2Pit Optimization

The mineral reserves are reported within an ultimate pit design that was guided by pit optimization (Lerch-Grossman algorithm). The pit optimization considered only Indicated mineral resources as there are no in situ Measured resources in the SRK block model. Inferred resource blocks were assigned a Li2O% grade of zero prior to pit optimization and were treated as waste.

The overall pit slopes used for pit optimization are based on operational level geotechnical studies and range from 27° to 50°. This includes a 5° allowance for ramps and geotechnical catch benches.

Pit optimization parameters are shown in Table 12-1.


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Table 12-1: Pit Optimization Parameters


Parameter	Unit	Value
Average Mining Cost (varies by depth)	US$/t	5.57
Average Processing Cost	US$/t ore	17.87
G&A Cost	US$/t ore	4.91
Sustaining capital cost	US$/t ore	2.66
Mass Yield Chemical Grade Plants	%	LoM 22.94%
Mass Yield Technical Grade Plant	%	LoM 46.18%
Gross Sales Price (CIF China)	US$/t of 6% Li2O Conc	650
Shipping, Transportation and Royalty	US$/t of 6% Li2O Conc	73
Net Sales Price (mine gate)	US$/t of 6% Li2O Conc	577
Discount Rate	%	8.0

Note: the Greenbushes mass yield equation is subject to a 97% recovery limitation when the lithium oxide grade exceeds 5.5%.

Source: SRK, 2021

The LoM sustaining capital allowance of US$2.66 per tonne of ore that is shown on pages 30 and 31 of the 2021 Form 10-K (pages 10 and 11 of the 2021 Form 10-K/A) was used only for the purposes of pit optimization and cut-off grade calculation. It was not used for the technical economic model (TEM) presented in Section 19 of the Greenbushes technical report. Because pit optimization is performed as a first step in the mine planning process, SRK typically relies on the most recent information that is available at the time when the pit optimization process commences. In this instance, SRK used the estimate of LoM annual sustaining capital costs for Greenbushes that was included in the 2021 budget provided by the Company. The budgetary estimate of average annual sustaining capital costs for Greenbushes in such budget was AU$14.33 M/y, or AU$3.50 per tonne of ore based on the 4.1 Mt/y annual processing rate. This cost was then converted to US$2.66 per tonne of ore based on an assumed exchange rate of 0.76 US$:AU$. SRK reviewed the budgetary projection of the sustaining capital costs for Greenbushes and determined that it was reasonable to rely thereon for the purposes of pit optimization and cut-off grade calculation.

Subsequent to pit optimization, design and scheduling, a detailed estimate of LoM sustaining capital costs was prepared as discussed in Section 18 of the Greenbushes technical report. The detailed estimate based on the final reserves was used in the TEM in Section 19 of the Greenbushes technical report.

It is noted that the preliminary cost parameters used for pit optimization differ slightly from the final estimated costs used in the technical economic model (TEM) discussed in Section 19 of this report. The slight differences in costs are not considered material.

The mine planning process begins with pit optimization using preliminary estimates of costs, recoveries, and other input parameters. At the conclusion of the pit optimization, an economic pit shell is selected to guide the design of the final reserves pit (in this case, the revenue factor 0.85 pit shell was selected). The mining schedule for the final reserves pit is then generated. Detailed mining costs (both operating expenditures and capital expenditures) are then calculated from the reserves mining schedule. Provided that the detailed mining costs are not materially different from the preliminary costs used for pit optimization, the pit optimization results are typically considered to be valid.

In this instance, the average preliminary mining cost used for pit optimization was US$5.57/t mined. We note that the mining cost applied to each block in the block model is different depending on the depth of the block (i.e., deep blocks have longer haul pathways than shallow blocks and therefore the haulage cost for deep blocks is higher).


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The average mining cost used in the TEM (which was calculated from the final mining schedule) is shown as

AU$7.32/t-mined (Table 18-5). Based on the modeled exchange rate profile (Table 19-2), this equates to US$5.03/t-mined (Table 19-5). In SRK’s opinion, the average preliminary mining cost of US$5.57/t-mined used for pit optimization is sufficiently close to the average final mining cost used in the TEM of US$5.03/t-mined. We note that the preliminary average mining cost will never exactly match the final average mining cost used in the TEM because the mining planning process is iterative (i.e., changing the input parameters changes the pit shells, which changes the final pit design, which changes the schedule, which changes the detailed cost estimate). The summary pit optimization results are shown in Table 12-2. The revenue factor (RF) 0.85 pit shell was selected to guide the design of the ultimate reserves pit. This pit shell is highlighted as “Pit 14” in Table 12-2. The RF 0.85 pit corresponds to a mine gate price of US$496/t of 6% Li2O concentrate (i.e., 85% of the mine gate reserves price of US$577/t of 6% Li2O concentrate).

Table 12-2: Summary Pit Optimization Results


Pit Shell	Revenue Factor	Mine Gate Selling Price (US$/t-conc)	Strip Ratio (w:o)	Total Ore + Waste (Mt)	Ore (Mt)	Waste (Mt)	6% Li2O Concentrate (Mt)	Mass Yield (%)	Diluted Grade (Li2O%)
1	0.2	117	0.8	28.55	16.0	12.5	6.19	0.386	2.894
2	0.25	146	1.2	65.1	29.6	35.5	10.6	35.6	2.71
3	0.3	175	1.5	114.9	46.4	68.5	15.0	32.2	2.51
4	0.35	204	1.7	158.4	58.2	100.1	17.8	30.6	2.41
5	0.4	234	1.9	231.9	78.7	153.1	22.1	28.1	2.25
6	0.45	263	2.0	249.7	83.8	165.9	23.1	27.5	2.22
7	0.5	292	2.3	321.4	98.5	222.9	25.8	26.2	2.14
8	0.55	321	2.3	347.4	103.8	243.6	26.8	25.8	2.11
9	0.6	350	2.5	392.8	111.4	281.4	28.1	25.2	2.08
10	0.65	380	2.9	496.6	126.2	370.4	30.8	24.4	2.02
11	0.7	409	3.0	516.2	128.8	387.5	31.3	24.3	2.01
12	0.75	438	3.1	544.7	132.8	411.9	31.9	24.0	1.99
13	0.8	467	3.3	598.1	139.4	458.7	33.0	23.7	1.97
14	0.85	496	3.5	641.5	142.9	498.7	33.7	23.6	1.97
15	0.9	525	3.5	642.3	143.0	499.3	33.7	23.6	1.96
16	0.95	555	3.6	669.9	145.6	524.4	34.1	23.4	1.96
17	1	584	3.6	678.8	146.5	532.3	34.2	23.4	1.95
18	1.05	613	3.6	683.4	147.0	536.4	34.3	23.3	1.95
19	1.1	642	3.7	690.3	147.7	542.6	34.4	23.3	1.95
20	1.15	671	3.7	706.6	149.2	557.4	34.6	23.2	1.94
21	1.2	701	3.8	728.6	151.0	577.6	34.8	23.1	1.93
22	1.25	730	3.8	731.3	151.2	580.1	34.8	23.1	1.93
23	1.3	759	3.9	738.6	151.8	586.9	34.9	23.0	1.93

Source: SRK 2021

12.1.3Ultimate Pit and Phase Design

A 3D mine design based on optimized Pit 14 was completed using Vulcan software and is the basis for the in situ mineral reserves. The reserves pit has been designed with 10 m benches, variable bench widths, variable face angles and overall wall angles of between 27° and 50°. Local berm angles vary with local ground conditions and in some areas a double bench is applied (20 m bench


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height with zero catch bench). Ramp width is 20 m for single-way and 33 m for two-way traffic. The ramp gradient is 1:10. The ultimate pit floor is designed at 890 mRL, with a maximum wall height of approximately 430 m. The pit has been designed with a dual ramp system with exits on both the east and west walls. Figure 12-1 is a plan view of the final pit design that was used for mineral reserves, and Figure 12-2 is a section view through the middle part of the final design pit.


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Source: SRK, 2021

Figure 12-1: Plan View of the Ultimate Pit Design


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Source: SRK, 2021

Figure 12-2: Section View of Ultimate Pit Design (Looking North)


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Phase design resulted in a total of eleven phases being designed, with the ultimate reserves pit representing the eleventh and final phase. Figure 12-3 shows the location of the eleven pit phases in plan view. Figure 12-4 is a sectional view though the northern part of the ultimate pit showing multiple nested phases. Figure 12-5 is a 3D view of the ultimate pit and the final waste rock dump.

Source: SRK, 2021

Figure 12-3: Plan View of Phase Design (11 Phases)


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Source: SRK, 2021

Figure 12-4: Section View of Phase Design (Looking North)


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Source: SRK, 2021

Figure 12-5: Greenbush Final Pit and Waste Dump Design 3D View with Mineralized Pegmatite

12.2Modifying Factors

Modifying factors are the factors that are applied to Indicated and Measured mineral resources to establish the economic viability of mineral reserves. For Greenbushes, the modifying factors include mining dilution, mining recovery, processing recovery (mass yield), and application of a CoG. The CoG incorporates processing recovery and operating costs (mining, processing, G&A) and is applied to the diluted grade of each Indicated and Measured block inside the reserves pit. Each of the modifying factors is discussed below.

12.2.1Mining Dilution and Mining Recovery

Based on reconciliation data for prior resource block models, the Greenbushes operation has historically applied a 95% grade factor and 100% mining recovery to the mineral reserves. The 95% grade factor was intended to account for, among other things, external dilution introduced by the mining process.

The new SRK resource block model includes 2.7% internal dilution for all Indicated resource subblocks (5 m by 5 m by 5 m) inside the reserves pit. In addition to this internal dilution, SRK has applied 20% external dilution and 80% mining recovery to all blocks that fall on the ore/waste contact (“perimeter blocks”). Perimeter blocks make up approximately 16% of the total mineral reserve. The remainder of the blocks (non-perimeter blocks) have no external mining dilution applied and are assigned 100% mining recovery.

12.2.2Processing Recovery

Processing recovery is discussed in Section 14 of this report. For the purposes of converting mineral resources to mineral reserves, two mass yield (MY) equations were applied.

•For reserves that will be processed through the technical grade plant, the mass yield of concentrate was determined at the block level using by applying the greenbushes mass yield equation. (LoM result is 46.18%).

•For reserves that will be processed through the chemical grade plants, the mass yield (MY) of concentrate was determined by applying the greenbushes mass yield equation. (LoM


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22.4%). Where the lithium oxide grade is greater than 5.5%, a maximum recovery of 97% is applied.

The mass yield for CGP2 is currently less than CGP1; however, SRK’s opinion is that CGP2 will eventually achieve an average mass yield similar to CGP1 based on improvement initiatives that Greenbushes plans to implement. For this reason, SRK has reduced the forecast mass yield for CGP2 until the end of 2023. For 2024 onward, CGP2 has been assigned the same mass yield equation as CGP1.

Although Greenbushes produces a technical grade product from the current operation, it is assumed that the reserves reported herein will be sold as a chemical grade product. This assumption is necessary because feed for the technical grade plant is currently only defined at the grade control or blasting level. Therefore, it is conservatively assumed that concentrate produced by the technical grade plant will be sold at the chemical grade product price (US$577/t of 6% Li2O concentrate at the mine gate).

12.2.3Cut-Off Grade Estimate

The CoG estimation is based on assumptions and actual performance of the Greenbushes operation. Concentrate attributes and production cost inputs to the cut-off calculation are presented in Table 12-3. Recovery of a 6% Li2O concentrate is based on the previously noted weight recovery calculations from actual operational data.

The basis for the reserves price forecast is discussed in Section 16.3 of this report. Considering forecast operating costs, predicted mass yield and the forecast sales price, SRK calculated a CoG of 0.644% Li2O. However, based on the internal constraints of the current operations, a nominal 0.7% Li2O CoG was utilized to report mineral reserves.

Drilling, blasting, loading and hauling and mining overhead costs are excluded from the CoG calculation for in situ material because the pit design was guided by economic pit optimization. I.e., only incremental ore mining costs (RoM loader, rehandle from long-term stockpiles, grade control assays, and rockbreaking) were considered in the decision whether to send material to the waste dump or to the processing plant. Because an incremental ore mining cost is used in the cut-off grade calculation, the value in Table 12-3 (US$4.75 per tonne of ore) is different from the average full mining cost shown in Table 12-1 (US$5.57 per tonne of ore and waste mined).

The processing recovery is discussed in Section 14 of the Greenbushes technical report and is summarized in Section 12.2.2 of the technical report in the text that precedes Table 12-3 thereof. The mass yield equation used in the cut-off grade calculation is dependent on the LiO2% grade as follows:

Mass yield % =IF(LiO2%>5.5,LiO2%/6*97%,9.362*LiO2%^1.319/100)

Pursuant to this equation, where the lithium oxide grade is greater than 5.5%, a maximum recovery of 97% is applied This CoG was applied to both in situ and stockpile material, although SRK notes that stockpiles are generally used to augment other material types for processing during active mining.

It is important to note that the pit optimization process determines the economic potential of the reserves pit, given the costs involved in moving every block inside the optimized pit shell to some


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location, either a waste dump in the case of a waste block or an ore stockpile in the case of an ore block. For this reason, the mining cost used in the cut-off grade calculation is an incremental ore mining cost rather than the full mining cost.

Table 12-3: Cut-Off Grade Calculation


Revenue	Units	Value
Cut-Off Grade	Li2O%	0.644
Mass Yield	t of 6% Li2O Concentrate	0.052
Price at Mine Gate	US$/t of 6% Li2O Concentrate	577.00
Total Revenue	US$/t-RoM	30.19
Costs
Incremental Ore Mining	US$/t-RoM	4.75
Processing	US$/t-RoM	17.87
G&A	US$/t-RoM	4.91
Sustaining Capital	US$/t-RoM	2.66
Total Cost	US$/t-RoM	30.19

Notes:

(1)The greenbushes mass yield equation relults in a LoM mass yield of 22.04% mass yield subject to a 97% recovery limitation when the lithium oxide grade exceeds 5.5%.

(2)Incremental ore mining costs include RoM loader, rehandle from long-term stockpiles, grade control assays, and rock breaker.

(3)Based on the internal constraints of the current operations, a nominal 0.7% Li2O CoG was utilized to report mineral reserves.

Source: SRK, 2021

12.2.4Material Risks Associated with the Modifying Factors

In the opinion of SRK as the QP, the material risks associated with the modifying factors are:

•Product Sales Price:

◦The price achieved for sales of spodumene concentrates is forecast based on predicted supply and demand changes for the lithium market on the whole. There is considerable uncertainty about how future supply and demand will change which will materially impact future spodumene concentrate prices. The reserve estimate is sensitive to the potential significant changes in revenue associated with changes in spodumene concentrate prices.

•Mining Dilution and Mining Recovery:

◦The mining dilution estimate depends on the accuracy of the resource model as it relates to internal waste dilution/dikes identification. Due to the spacing of the resource drill holes, it is not possible to identify all of the waste dikes the operation will encounter in the future. SRK studied the historical dilution factors and applied a 3D dilution halo around ore and waste contact blocks. This is accurate as long as the resource model identifies all the waste dikes; however, it is known that this is not always possible with the resource drilling. If an increased number of waste dikes are found in future mining activities, the dilution may be greater than estimated because there will be more ore blocks in contact with waste blocks. This would potentially introduce more waste into the plant feed, which would decrease the feed grade, slow down the throughput and reduce the metallurgical recovery. A potential mitigation would be to mine more selectively around the waste dikes, although this would result in reduced mining recovery.

•Impact of Currency Exchange Rates on Production Cost


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◦The operating costs are modeled in Australian dollars (AU$) and converted to US$ within the cash flow model. The foreign exchange rate profile for the model was provided by Albemarle. If the AU$ strengthens, the cash cost to produce concentrate would increase in US$ terms and this could potentially reduce the mineral reserves estimates.

•Geotechnical Parameters:

◦Geotechnical parameters used to estimate the mineral reserves can change as mining progresses. Local slope failures could force the operation to adapt to a lower slope angle which would cause the strip ratio to increase and the economics of the pit to change.

•Processing Plant Throughput and Mass Yields:

◦The forecast cost structure assumes that the technical grade plant and the two chemical grade plants remain fully operational and that the estimated mass yield assumptions are achieved. If one or more of the plants does not operate in the future, the cost structure of the operation will increase. If the targeted mass yield is not achieved, concentrate production will be lower. Both of these outcomes would adversely impact the mineral reserves.

12.3Summary Mineral Reserves

The conversion of Indicated mineral resources to Probable mineral reserves has been completed in accordance with CFR 17, Part 229 (S-K 1300). Mineral reserves were estimated based on a spodumene concentrate (6% Li2O) price of US$650/t of concentrate CIF China or US$577/t of concentrate at the mine gate. The reserves are based on a reserves pit that was guided by pit optimization. Appropriate modifying factors have been applied as previously discussed. The positive economics of the mineral reserves have been confirmed by LoM production scheduling and cash flow modeling as discussed in sections 13 and 19 of this report, respectively.

Table 12-4 shows the Greenbushes mineral reserves as of June 30, 2021.


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Table 12-4: Greenbush Summary Mineral Reserves at June 30, 2021 Based on US$577/t of Concentrate Mine Gate – SRK Consulting (U.S.), Inc.


Classification	Type	100% Tonnes (Mt)	Attributable Tonnes (Mt)	Li2O%	Mass Yield (%)	100% Concentrate (Mt)	Attributable Concentrate (Mt)
Probable Mineral Reserves	In situ	138.1	67.7	1.97	22.6%	31.3	15.3
	Stockpiles	4.6	2.3	1.31	13.4%	0.6	0.3
	In situ + Stockpiles	142.7	69.9	1.95	22.3%	31.9	15.6

Source: SRK, 2021

•Albemarle’s attributable portion of mineral resources and reserves is 49%.

•Mineral reserves are reported exclusive of mineral resources.

•Indicated in situ resources have been converted to Probable reserves.

•Measured and Indicated stockpile resources have been converted to Probable mineral reserves.

•Mineral reserves are reported considering a nominal set of assumptions for reporting purposes:

◦Mineral reserves are based on a mine gate price of US$577/t of chemical grade concentrate (6% Li2O).

◦Mineral reserves assume 80% mining recovery for ore/waste contact areas and 100% for non-waste contact material

◦The mass yield (MY) for reserves processed through the chemical grade plants is estimated by the based on Greenbushes’ mass yield formula and the LoM mass yield is 29.49% but is subject to a 97% recovery limitation when the lithium oxide grade exceeds 5.5%.

◦The mass yield (MY) for reserves processed through the chemical grade plant CGP2 in the next three to four years is estimated by the based on Greenbushes’ mass yield formula for a LoM mass yield of 16.77%, but is subject to a 97% recovery limitation when the lithium oxide grade exceeds 5.5%. The CGP2 plant is going through a ramp up period where lower recoveries are expected until all equipment has been optimized and additional capital is spent.

◦Costs estimated in Australian Dollars were converted to US Dollars based on an exchange rate of 0.76AU$:1.00US$.

◦The price, cost and mass yield parameters, along with the internal constraints of the current operations, result in a mineral reserves CoG of 0.7% Li2O.

◦The CoG of 0.7% Li2O was applied to reserves that are constrained by the ultimate pit design and are detailed in a yearly mine schedule

◦Stockpile reserves have been previously mined and are reported at a 0.7% Li2O CoG

•Waste tonnage within the reserve pit is 459 Mt at a strip ratio of 3.32:1 (waste to ore – not including reserve stockpiles)

•Mineral reserve tonnage, grade and mass yield have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding

◦Mt = millions of metric tonnes

◦Reserve tonnes are rounded to the nearest hundred thousand tonnes

•SRK Consulting (U.S.) Inc. is responsible for the mineral reserves with an effective date: June 30, 2021


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13Mining Methods

Greenbushes is an operating mine that uses conventional open pit methods to extract mineral reserves containing economic quantities of Li2O to produce both chemical and technical grade spodumene concentrates. Historically there was underground and open pit mining at Greenbushes, but the mineral reserves and LoM plan are based only on open pit mining.

Figure 13-1 illustrates the current status of the Greenbushes Central Lode open pit.

Source: SRK, 2021

Figure 13-1: Greenbush Central Lode Pit as of June 30, 2021

13.1.1Current Mining Methods

The material encountered at Greenbush is a combination of weathered material within the first 20 to 40 m with a small transition zone followed by fresh rock. The weathered zone is loosely consolidated sand which can be mined without the need for drilling and blasting. Mineralization is not present in the weathered zone thus drilling for the purposes of ore control and waste classification is not necessary. Sand and historical waste dumps are mined without blasting.


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Drilling and blasting are required in all hard rock (both ore and waste). Drilling and blasting services are performed by a contractor (currently Action Drilling and Blasting) with explosives supplied by Orica. Production drilling is performed with Atlas Copco T45 and D65 drills with hole diameters ranging in diameter from 115 mm to 165 mm depending on material type and application. Blast hole depth in waste is 10 m (plus subdrill) and 5 m in ore (plus subdrill). Grade control is performed by reverse circulation (RC) drills rigs that drill 137 mm diameter holes that are sampled on 2.5 m intervals.

Flitch height is variable. Waste is typically mined on a 10 m flitch. Ore is typically mined on 5 m flitches.

A contractor (SG Mining Pty Ltd) provides all necessary equipment and operating/maintenance personnel for the load and haul operations. The load and haul contractor’s current equipment fleet are shown in Table 13-1.

Table 13-1: Load and Haul Contractor Mining Fleet


Make	Model	Type	No. of Units
Komatsu	PC1250-8	Excavator	2
Caterpillar	6015B	Excavator	2
Caterpillar	988G/H/K	Loader	5
Caterpillar	992K	Loader	1
Caterpillar	777F/G	Dump Truck (90t)	12
Caterpillar	D10R/T	Dozer	2
Caterpillar	16G/H	Grader	2
Caterpillar	IT28B	Tool Carrier	1
Caterpillar	930K	Tool Carrier	1
Caterpillar	777F	Watercart	2
Hino	-	Service Truck	1
Toyota	Hilux	Dual Cab	9
Toyota	Landcruiser	Wagon	1
Toyota	Landcruiser	Tray Back	3
Allight	Diesel	Lighting Plant	13
Lincoln	Vantage 575	Mobile Welder	1
Austin Eng	TH2500	Tyre Handler	1
AAQ	AS4000	LV Hoist S2	1
Deutz / Stalker	TCD2011	Stand-pipe pump	1

Source: Talison, 2021

Ore is taken to the RoM pad where it is stockpiled according to ore type, mineralogical characteristics and grade. Waste is taken to the waste dump to the east of the pits.

13.2Parameters Relevant to Mine Designs and Plans

13.2.1Geotechnical

Slope stability and bench design analyses have been conducted by Pells Sullivan Meynink Consult Pty (PSM) on the 2019 pit design to assess the stability of pit slopes during operations. The existing slope performance is typically good with no instances of inter-ramp failures which is supported by prism data. Bench-scale instabilities and rockfall are the principal geotechnical hazards which are managed operationally. Slope stability analyses include kinematic assessments, limit equilibrium and FEM stability analyses and rockfall assessments.

The adopted slope design acceptance criteria include:


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•Bench face angles of 10% to 30% probability of undercutting

•Inter-ramp slope angles of 3% to 5% probability of undercutting

•Inter-ramp slope factor of safety greater than 1.2

•Overall slope factor of safety greater than 1.5

Results of PSM’s analyses showed that the 2019 pit design met the above stability acceptance criteria. PSM noted that the west hangingwall is higher risk than the east footwall because the ore plunges beneath the west wall and each push back must remain stable to recover the reserves.

Recent work by PSM (PSM2193-060R, 2/2021) reevaluated the geotechnical model with all the existing data. The result of this work was updated slope design parameters summarized in Table 13-2.

Table 13-2: Slope Design Parameter for Kapanga Pit

Slope Design Sector

Inter-Ramp
Angle (°)

Bench Configuration

Bench Face
Angle (°)

Bench
Height (m)

Berm
Width (m)

Waste Dumps

12 to 14°

Single batter configuration

Weathered Zone (< 30 m height)

40°

Weathered Zone
(> 30 m and < 50 m height)

30°

KEW 1

38°

8.5

KEW 2

42°

KWW

55°

Source :Talison, 2021

Key risks that were identified by PSM were:

•The bullnose was a stability risk. SRK has removed the bullnose in the current pit design.

•Hydrogeological conditions, particularly in relation to bench face stability due to pore pressures and dewatering. SRK has recommended additional work be done on hydrogeological conditions before the pit wall gets through the weathered zone.

•The character and orientation of the PB Geology Interpretation structures in the recent geological model in the Central Lobe west and east walls have a high degree of uncertainty and may impact the slope design. SKR has recommended that as stripping begins the geologists/geotechnical engineers evaluate the consistency and orientation of these structures.

PSM recommended that additional work should be conducted on hydrogeological conditions because pore pressures will reduce wall stability, especially where structures form wedges and when large precipitation periods persist. Safety risks are focused on rockfall events because benches are only 8.5 m wide, and a high percent of loose boulders can make it to the working floor. Future monitoring should include radar such that minor events can be used to predict more major rockfall events thereby mitigating safety risks.

Updated Stability Analysis

SRK has reanalyzed pit slope stability with the SRK reserve pit design described in Section 12. The following is a description of the analyses input, assumptions and results.

Two-dimensional limit equilibrium stability analyses were conducted along critical cross sections of the 2020 pit design. The most recent 3D geologic solids developed in Leapfrog were imported to Vulcan as was the 3D ultimate pit shell. Cross sections were cut in Vulcan and exported as DXF files


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into the Rhino visualization program so that re-orientation would allow the 2D model to be in X,Y coordinates. The cross sections were imported to the RocScience Slide (2018) limit equilibrium program. Metric units were used for the analysis.

The stability solution is based on Spencers’ method of slices where the slope was discretized into 50 slices and 75 iterations were used to compute the balance of forces. A non-circular search path was used with over 5000 potential failure surfaces. The results are presented as the minimum factor of safety (FOS) potential failure surface.

Material properties were taken from Table 25 in PSM for the Upper Weathered Zone (Mohr-Coulomb behavior), Kapanga Pegmatite, Granofels, Lower East Amphibolite and North West Dolerite (each Hoek-Brown behavior). The critical cross section locations for the stability analyses are identified in Figure 13-2.

Source: SRK 2021

Figure 13-2: Plan View of 3D 2020 Ultimate Pit with Slope Stability Cross Section Locations

Table 13-3 is a summary of the results. These results indicate that all the sections analyzed have a FOS greater than the minimum acceptable criteria. The reduced strength case assumed an


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approximate 10% strength reduction by reducing the cohesion of the Upper Weathered Zone by 10% and reducing the GSI values for the other rock units by about five points. Results of the stability analyses are provided in detail in SRK (2020).

Table 13-3: Summary of Limit Equilibrium Stability Analysis Minimum Factor of Safety


Section	Location	Average Strength		Reduced Strength
		Global FOS	Local FOS	Global FOS	Local FOS
A	North West C3 Highwall	2.5		2.2
B	South East C2 Highwall	3.9		3.4
C	East C1 Wall	7.5	1.4	6.2	1.3
D	South West C2 Highwall	3.1	1.8	2.5	1.8

Source: SRK 2021

Potential Geotechnical Risks

The greatest gap appears to be hydrogeology data and analyses. Slope performance section of the PSM report has no descriptions of seeps or wet spots and slope stability analyses only considered dewatering of 10 m within bench face.

During mining, Greenbushes might encounter voids from historic workings. There is no discussion in the PSM report about whether workings are flooded, or elevation of workings compared to piezometer estimates of groundwater levels.

The weathered zone at the surface has the potential to continue to move, especially if the zone is saturated. It is essentially a soil. It will be important to monitor gradual movements and have operations occasionally clear benches, especially on the steeper west wall and during the wet season.

The 2019 proposed inter-ramp angles are more aggressive (by 5° to 7°) than previously proposed, even though no new data has been collected. Although slope factors of safety are still higher than the minimum acceptance criteria, the steeper slopes could result in increased rockfall events

The PSM geotechnical report makes no mention of current blasting practices and their impact on bench stability. Blasting practices should be reviewed.

Stability of the bullnose between the Cornwall pit and Central pit has not been examined for stability. This is important, especially because this is the area where the historic underground workings are located. These workings could have an adverse impact on the overall stability of the deeper northwest wall of the Central pit, especially if groundwater interaction is involved.

13.2.2Hydrological

The low hydraulic conductivity of the resource hosting rocks, and lack of significant aquifer storage, decreases operational concerns for mine dewatering. Dewatering to date has been managed through in-pit sumps and pumping to remove passive groundwater inflow and storm event precipitation. Current passive groundwater inflow to the pit is less than 10 L/s. Due to the low hydraulic conductivity of the host rocks, pore pressure may be a concern, however this has been adequately managed to date with the installation of lateral drains as necessary. Proposed expansion will not change the appropriateness of the current inflow management strategy within the pit, nor the adequacy based on the current available data.


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Surface water, primarily in the form of short-term flow from precipitation events, is managed through a network of natural and engineered drainages to direct capture of precipitation behind five dams (Cowan, Brook, Southampton/Austin’s Dam, Clear Water Dam, Clear Water Pond, and Tin Shed Dam). These structures serve to feed several water supply impoundments across the mine site, water not used in site operations is released through evaporation or very slow seepage through the clay underlining.

All water usage on site is derived from capture of surface water run-off and groundwater production from removal of passive groundwater inflow to the pit. There are no groundwater production wells to support mine operations.

Potential Hydrologic Risks

The primary hydrology concern is the availability of water to support mining operations. The mine water supply is limited by the annual precipitation, storage capacity behind dams, and overall efficiency of the surface water management system to recycle water from the TSFs. The infrastructure has adequately performed to date, supplying sufficient water to support mine operations. However, due to these potentially limiting factors, additional surface water storage facilities may need to be constructed to support expansion of operations. Section 15.6 further discusses mine water supply and infrastructure.

13.3Mine Design

13.3.1Pit Design

Pit optimization and design are discussed in detail in Section 12 of this report. The major design parameters used for the open pit are as follows:

•Ramp grade = 10%

•Full ramp width = 33 m (3x operating width for 777F/G)

•Single ramp width = 20 m for up to 60 m vertical or six benches

•Minimum mining width = 40 m but targets between 100 m to 150 m

•Flat switchbacks

•Bench heights, berm widths and bench face angles in accordance with current site-specific design criteria

Figure 13-3 illustrates the LoM reserves pit design and associated ramp system. Ramp locations targeted saddle points between the various pit bottoms with ramps also acting as catch benches for geotechnical purposes. Each bench has at least one ramp for scheduling purposes.


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Source: SRK, 2021

Figure 13-3: LoM Pit Design


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Grade Tonnage

Table 13-4 details the grade tonnage at various cut-offs within the reserves pit design. The CoG used for reserves is 0.7 Li2O%.

Table 13-4: Grade Tonnage Curve within the Reserves Pit (Not Diluted) – Current Stockpiles Not Included


Cutoff	Undiluted Li2O%	Mt
0.40	2.02	138.3
0.50	2.02	138.3
0.60	2.02	138.3
0.70	2.02	138.3
0.80	2.04	135.9
0.90	2.06	133.0
1.00	2.1	129.4
1.10	2.13	124.9
1.20	2.18	119.3
1.30	2.23	112.8
1.40	2.29	105.5
1.50	2.36	98.1
1.60	2.42	90.6
1.70	2.5	82.7
1.80	2.57	75.2
1.90	2.65	68.0
2.00	2.73	60.8
2.10	2.81	54.9
2.20	2.88	49.1
2.30	2.96	43.7
2.40	3.04	39.0
2.50	3.11	34.7
2.60	3.19	30.5
2.70	3.27	26.6
2.80	3.34	23.3
2.90	3.42	20.1
3.00	3.49	17.2
3.10	3.57	14.7
3.20	3.64	12.6
3.30	3.71	10.6
3.40	3.79	8.9
3.50	3.86	7.2
3.60	3.95	5.6
3.70	4.03	4.5
3.80	4.09	3.7

Source: SRK 2021

Figure 13-4 shows the grade tonnage curve graphically above a 0.40% Li2O lower limit.


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Source: SRK 2021

Figure 13-4: Grade Tonnage Curve within Reserve Pit (Undiluted Li2O% Grades)

Phase Design Inventory

The ultimate pit has been broken into eleven mine phases for sequenced extraction in the LoM production schedule. The design parameters for each phase are the same as those used for the ultimate pit including assumed ramp widths. Phase designs were constructed by splitting up the ultimate pit into smaller and more manageable pieces, while still ensuring each bench within each phase has ramp access. The phases have been developed by balancing mining constraints with the optimum extraction sequence suggested by pit optimization results presented previously.

The phases and direction of extraction allow for multiple benches on multiple elevations with a sump always available for pit dewatering. This means that during periods of heavy rainfall, perched benches will be available for extraction.

Once the phases have been designed, solid triangulations are created for each phase as they cut into topography from previous phases. These solid phases are then shelled (cut) on a 5 m lift height that corresponds to one block model subblock. These shells form a bench within each phase and represent the basic unit that is scheduled for the LoM production plan.

Table 13-5 details the phase inventory that formed the basis of the LoM production schedule.


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Table 13-5: Phase Inventory (June 30, 2020 to End of Mine Life)*


Phase ID	Total (Mt)	Ore (Mt)	Waste (Mt)	Inferred Waste (Mt)	Li2O% Diluted	Fe2O3%	MY%	Concentrate (Mt)
PH_01	2.9	2.6	0.3	0.0	3.36	0.6	46.9%	1.2
PH_02	3.0	2.3	0.6	0.1	2.25	1.3	27.8%	0.6
PH_03	36.9	17.8	17.9	1.2	2.05	1.2	24.8%	4.4
PH_04	2.0	1.7	0.3	0.0	2.37	1.3	29.9%	0.5
PH_05	2.8	2.0	0.7	0.1	2.31	0.8	29.0%	0.6
PH_06	100.6	29.7	70.1	0.7	2.31	1.1	28.9%	8.6
PH_07	97.4	24.8	70.9	1.7	1.95	1.2	23.1%	5.7
PH_08	86.0	14.1	70.2	1.7	1.80	1.1	20.8%	2.9
PH_09	23.1	4.2	18.4	0.6	1.95	1.2	23.6%	1.0
PH_10	127.0	21.6	102.5	2.9	1.52	1.3	16.7%	3.6
PH_11	115.5	17.5	95.5	2.4	1.71	1.1	19.5%	3.4
TOTAL	597.2	138.3	447.3	11.5	1.97	1.1	23.6%	32.6

Source: SRK, 2021

*Does not include approximately 4.6 Mt of ore in stockpiles as of June 30, 2021.

*MY% may not match mill feed schedule due to different plant recoveries

13.4Mining Dilution and Mining Recovery

The new SRK resource block model includes 2.7% internal dilution for all Indicated resource subblocks (5 m by 5 m by 5 m) inside the reserves pit. In addition to this internal dilution, SRK has applied 20% external dilution and 80% mining recovery to all blocks that fall on the ore/waste contact (“perimeter blocks”). The perimeter blocks are represented by the 3 to 5 m wide halo depicted in Figure 13-5.

Perimeter blocks make up approximately 16% of the total mineral reserve. The remainder of the blocks (non-perimeter blocks) have no external mining dilution applied and are assigned 100% mining recovery.

SRK is of the opinion that these mining dilution and mining recovery adjustments are appropriate for the conversion of Indicated mineral resources to Probable mineral reserves.


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Source: SRK, 2020

Figure 13-5: Greenbushes Dilution and Mining Recovery Edge Effect

13.5Production Schedule

The LoM production is inherently forward-looking and relies upon a variety of technical and macroeconomic factors that will change over time and therefore is regularly subject to change. The schedule is based on June 30, 2021 pit topography and the mine was scheduled on a quarterly basis for the full LoM timeframe. Bench sinking rates were limited to ten benches per phase per year.

Figure 13-6 through Figure 13-10 show the mine and mill metrics on a yearly basis.

Source: SRK, 2021

Note: LoM values are provided in Table 19-12.

Figure 13-6: Mining and Rehandle Profile


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Source: SRK, 2021

Figure 13-7: Feed Grade by Plant

Source: SRK, 2021

Note: LoM values are provided in Table 19-12.

Figure 13-8: Combined Process Plant Throughput and Grade (TGP, CGP1 and CGP2)


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Source: SRK, 2021

Note: LoM values are provided in Table 19-12.

Figure 13-9: Concentrate Production by Plant (TGP, CGP1 and CGP2)

Source: SRK, 2021

Note: LoM values are provided in Table 19-12.

Figure 13-10: Long-Term Ore Stockpile Size

The LoM production schedule is detailed in Table 13-6.


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Table 13-6: LoM Production Schedule -Expit and Mill concentrate production


		1-Jul-21	1-Jan-22	1-Jan-23	1-Jan-24	1-Jan-25	1-Jan-26	1-Jan-27	1-Jan-28	1-Jan-29	1-Jan-30	1-Jan-31	1-Jan-32	1-Jan-33	1-Jan-34	1-Jan-35	1-Jan-36	1-Jan-37	1-Jan-38	1-Jan-39	1-Jan-40
In-Pit RoM Summary	Total	31-Dec-21	31-Dec-22	31-Dec-23	31-Dec-24	31-Dec-25	31-Dec-26	31-Dec-27	31-Dec-28	31-Dec-29	31-Dec-30	31-Dec-31	31-Dec-32	31-Dec-33	31-Dec-34	31-Dec-35	31-Dec-36	31-Dec-37	31-Dec-38	31-Dec-39	31-Dec-40
RoM (t)	138,146,761	2,200,000	4,400,000	4,400,000	4,400,000	4,400,000	4,400,000	4,400,000	4,400,000	4,400,000	4,400,000	4,400,000	4,400,000	4,300,000	4,200,000	4,200,000	4,200,000	4,200,000	4,200,000	4,200,000	4,200,000
RoM Li2O (%)	1.97	2.82	2.54	2.13	2.06	2.26	2.14	2.19	2.20	2.11	2.20	2.34	2.30	2.15	1.99	1.76	1.75	1.70	2.21	2.01	1.65
Total RoM WRCP (%)	1.30%	10.05%	8.60%	0.92%	0.95%	1.68%	1.59%	0.62%	1.13%	1.33%	2.91%	4.12%	4.21%	2.46%	1.17%	0.24%	0.16%	0.62%	0.89%	0.21%	0.31%
Starting RoM Stockpile Summary
RoM (t)	4,593,931	4,593,931
RoM Li2O (%)	1.54	1.54
Total RoM WRCP (%)	16.92%	16.92%
Total RoM MIN_REC (%)	100%	100%
Total RoM DIL_PERC (%)	100%	100%
Tech Grade	1,610,624	48,432	137,000	137,000	137,000	137,000	137,000	119,172	49,921	58,662	107,255	137,000	137,000	137,000	131,183	-	-	-	-	-	-
Chemical Grade 01	17,014,432	303,118	585,835	578,828	560,874	617,107	585,048	590,475	588,542	569,134	592,652	591,402	594,540	592,160	579,427	453,111	444,852	455,611	621,114	576,825	445,983
Chemical Grade 02	13,672,738	219,029	429,216	348,797	500,303	534,559	461,771	528,352	517,121	468,235	447,437	496,848	464,827	436,407	386,999	401,887	401,493	367,590	516,420	426,655	333,635
Chemical Grade Total	30,687,170	522,147	1,015,051	927,626	1,061,177	1,151,666	1,046,820	1,118,827	1,105,664	1,037,369	1,040,089	1,088,250	1,059,367	1,028,567	966,426	854,998	846,345	823,201	1,137,534	1,003,480	779,618


		1-Jan-41	1-Jan-42	1-Jan-43	1-Jan-44	1-Jan-45	1-Jan-46	1-Jan-47	1-Jan-48	1-Jan-49	1-Jan-50	1-Jan-51	1-Jan-52	1-Jan-53	1-Jan-54	1-Jan-55
In-Pit RoM Summary	Total	31-Dec-41	31-Dec-42	31-Dec-43	31-Dec-44	31-Dec-45	31-Dec-46	31-Dec-47	31-Dec-48	31-Dec-49	31-Dec-50	31-Dec-51	31-Dec-52	31-Dec-53	31-Dec-54	31-Dec-55
RoM (t)	138,146,761	4,200,000	4,200,000	4,200,000	4,200,000	4,200,000	4,200,000	4,200,000	4,200,000	4,200,000	4,200,000	4,200,000	4,200,000	3,446,761	-	-
RoM Li2O (%)	1.97	1.49	1.58	1.72	1.73	1.67	1.81	1.85	1.81	1.74	1.84	1.65	1.68	2.10	-	-
Total RoM WRCP (%)	1.30%	0.08%	0.07%	0.15%	0.10%	0.09%	0.12%	0.10%	0.07%	0.06%	0.20%	-	0.11%	1.15%	-	-
Starting RoM Stockpile Summary
RoM (t)	4,593,931
RoM Li2O (%)	1.54
Total RoM WRCP (%)	16.92%
Concentrate Production Summary
Tech Grade	1,610,624	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
Chemical Grade 01	17,014,432	357,046	383,461	450,026	443,387	431,398	501,172	512,134	498,918	470,741	502,451	404,420	416,347	544,392	137,901	34,003
Chemical Grade 02	13,672,738	317,452	343,959	363,571	380,569	350,809	369,788	384,037	372,327	354,704	386,620	362,465	371,675	392,237	195,143	39,796
Chemical Grade Total	30,687,170	674,498	727,420	813,596	823,956	782,207	870,960	896,171	871,245	825,446	889,071	766,885	788,022	936,629	333,044	73,799

Notes:

Expit tonnes and grade excluding stockpile handling.

WRCP is mass yield.

Source: SRK 2021


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Bench Sinking Rate

Table 13-7 shows the benches mined from each pit/phase on an annual basis. In SRK’s opinion, the sinking rate is reasonable.


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Table 13-7: LoM Yearly Bench Sinking Rates (Number of 10-m-High Benches Mined per Phase per Year)


Year	PH_01	PH_02	PH_03	PH_04	PH_05	PH_06	PH_07	PH_08	PH_09	PH_10	PH_11
2021	4.7	3.0	4.1	-	2.8	4.0	2.0	-	-	-	-
2022	2.3	2.0	2.4	1.0	0.2	3.1	-	-	-	-	-
2023	-	-	2.1	2.3	-	2.1	2.2	-	-	-	-
2024	-	-	2.3	0.7	1.2	0.9	2.8	1.0	-	-	-
2025	-	-	1.6	1.0	2.8	1.5	2.0	-	-	-	-
2026	-	-	0.7	-	-	2.9	0.9	1.0	-	-	-
2027	-	-	0.9	-	-	2.0	0.2	4.0	-	-	-
2028	-	-	1.1	-	-	1.4	0.9	2.8	-	-	-
2029	-	-	1.4	-	-	1.0	1.8	2.2	-	-	-
2030	-	-	2.9	-	-	0.6	0.6	2.0	3.0	5.0	-
2031	-	-	1.3	-	-	1.7	-	-	5.0	2.3	-
2032	-	-	-	-	-	1.9	0.6	1.0	0.3	1.7	-
2033	-	-	1.0	-	-	1.5	2.0	2.0	0.7	0.5	-
2034	-	-	1.0	-	-	0.8	2.0	1.4	4.2	0.1	-
2035	-	-	-	-	-	-	5.2	1.5	0.8	-	-
2036	-	-	-	-	-	-	1.7	3.3	-	1.6	-
2037	-	-	-	-	-	0.5	0.1	2.4	-	2.5	3.0
2038	-	-	2.0	-	-	4.0	0.0	-	1.0	-	6.4
2039	-	-	-	-	-	-	1.7	-	2.0	0.2	4.6
2040	-	-	-	-	-	-	0.4	-	0.7	2.4	2.6
2041	-	-	-	-	-	-	0.2	1.4	0.3	2.3	2.4
2042	-	-	-	-	-	-	0.6	-	1.0	2.8	3.0
2043	-	-	-	-	-	-	1.3	-	-	2.9	3.0
2044	-	-	-	-	-	1.0	0.9	1.0	-	2.7	2.4
2045	-	-	-	-	-	-	0.5	2.1	-	2.0	1.6
2046	-	-	-	-	-	1.0	1.4	0.9	-	1.0	1.8
2047	-	-	-	-	-	-	0.9	2.4	-	0.9	0.2
2048	-	-	-	-	-	-	1.2	1.6	-	2.1	0.3
2049	-	-	-	-	-	-	1.8	1.4	-	1.0	1.6
2050	-	-	-	-	-	-	1.0	5.6	-	-	1.3
2051	-	-	-	-	-	-	-	-	-	-	2.7
2052	-	-	-	-	-	-	-	-	-	-	3.1
2053	-	-	-	-	-	-	-	-	-	-	6.0

Source: SRK 2021


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13.6Waste Dump Design

The current waste dump design has a final slope angle of 12 to 13° overall. This is to support concurrent reclamation to final configuration.

SRK has designed the waste dump to match the waste volumes in the LoM production schedule. Table 13-8 shows the volumetrics including the 27% compacted swell factor. Figure 12-5 in Section 12 of this report shows the final waste dump design and location in relation to the open pit. In the future it is possible that part of the waste dump will need to be relocated due to potential additional resources within its footprint.

Table 13-8: Waste Dump Capacities by Bench (10-m-High Lifts)


Toe Elevation (m)			Loose Cubic Meters (27% Swell Factor Compacted)
1,220			251,798
1,230			2,013,857
1,240			6,274,229
1,250			13,516,960
1,260			23,992,646
1,270			29,076,408
1,280			30,316,179
1,290			27,609,588
1,300			26,783,340
1,310			27,302,738
1,320			23,476,876
Total			210,614,619

Source: SRK 2020


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14Processing and Recovery Methods

Greenbushes currently has two ore crushing facilities (CR1 and CR2) and three ore processing plants which includes the Technical Grade Plant (TGP), Chemical Grade Plant-1 (CGP1) and Chemical Grade Plant-2 (CGP2) with a nominal capacity of 4.5 Mt/y of pegmatite feed to produce a nominal 1.3 Mt/y of spodumene concentrates (chemical and technical grades). This section provides a discussion of the operation and performance of the crushing facilities, TGP, CGP1 and CGP2.

14.1Technical Grade Plant (TGP)

TGP is a relatively small plant that processes approximately 350,000 t/y of ore at an average grade of about 3.8% Li2O and produces about 150,000 t of spodumene concentrate products. The TGP produces a variety of product grades identified as SC7.2, SC6.8, SC5.5 and SC5.0 (specifications for each grade are presented in Section 14-7). There are two sub-products for SC7.2 designated as Premium and Standard, and these products carry the SC7.2P and SC7.2S designation. TGP can be operated in two different production configurations as shown in Figure 14-1. When operating in configuration 1 TGP produces SC7.2, SC6.8 and SC5.0 products. Configuration-1 can be split into two subsets, producing either SC7.2P or SC7.2S. When operating in configuration-2, the coarse processing circuit (SC5.0 circuit) is bypassed and the TGP produces only SC6.5 and SC6.8 products. All products, with the exception of SC6.8 are shipped in 1,000 kg bags or in bulk. SC6.8 is shipped only in 1,000 kg bags.


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Source: Greenbushes 2020

Blue Represents Configuration-1 and Blue + Red Represents Configuration 2

Figure 14-1: Simplified TGP Flowsheet


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TGP has a current maximum sustainable feed rate of 50 dry tonnes per hour if maximum production for SC5.0 is required (configuration 1) and a maximum feed rate of 35 dry tonnes per hour if the SC5.0 circuit is off-line (configuration 2).

Feed to TGP is defined primarily by Li2O grade and the iron grade that will achieve the final product iron quality specification for SC7.2. The iron grade for the plant feed is governed by mineralogy and is modelled using oxides of manganese, calcium, potassium, sodium and lithium in plant feed.

The TGP process flowsheet is shown in Figure 14-2 and incorporates the following unit operations:

•Crushing

•Grinding

•Classification

•Flotation

•Magnetic separation

•Filtration

•Drying


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Source: Greenbushes, 2022

Figure 14-2: TGP Process Flowsheet


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14.1.1Grinding and Classification Circuit

TGP feed is blended with a front-end loader and fed by conveyor to a primary screen. Oversize from the screen is fed into a ball mill with the ball mill discharge reporting back to the primary screen fitted with a 3 mm screen. The +3 mm screen fraction is returned to the ball mill and the -3 mm fraction is subjected to low intensity magnetic separation to remove iron mineral contaminants, which are discarded to tailings. The nonmagnetic fraction is screened at 0.7 mm with Derrick Stacksizers. The -3 mm +0.7 mm fraction is recirculated back to the grinding circuit and the -0.7 mm fraction is advanced to the hydraulic classification circuit. The classifier underflow is processed in the coarse processing circuit and the classifier overflow is advanced to the fine processing circuit.

14.1.2Coarse Processing Circuit

The coarse classifier underflow is advanced to the coarse processing circuit where it is first deslimed and then processed through a spiral gravity circuit to produce a rougher tantalum gravity concentrate that is further upgraded on shaking tables to produce a final tantalum gravity concentrate. The gravity circuit tailings are screened at 0.8 mm on a safety screen and then dewatered with hydrocyclones and filtered on a horizontal belt filter to produce the SC5.0 product (glass grade product). The SC5.0 product is then dried in a fluid bed dryer and then subjected to a final stage of magnetic separation to remove any remaining iron contaminants. The final SC5.0 product is then conveyed to a 180 t storage silo pending packaging and shipment. It should be noted that the coarse processing circuit is operated only to fill market demand for the SC5.0 product and can be bypassed when SC5.0 production is not required.

14.1.3Fines Processing Circuit

The classifier overflow is advanced to the fines processing circuit where it is first deslimed and then subjected to two stages of reagent conditioning prior to spodumene rougher flotation. The spodumene rougher flotation concentrate is further upgraded with two stages of cleaner flotation. The spodumene cleaner flotation concentrate is then attritioned and processed through both low intensity magnetic separation and wet high intensity magnetic separation (WHIMS) to remove iron mineral contaminants. The nonmagnetic spodumene concentrate is filtered on a horizontal belt filter and then dried in a fluid bed drier. Dried concentrate from the lower portion of the fluid bed drier is final SC7.2 product which is conveyed to a 250 t storage silo pending packaging and shipment. The fine fraction that discharges from the upper portion of the fluid bed drier is classified in an air classifier. The classifier underflow is the SC6.8 product, which is conveyed to a storage silo. The air classifier overflow is captured in a baghouse and subsequently recycled back to the process.

14.1.4Control Philosophy

A process control system (PCS) provides an operator interface with the plant and equipment. A programmable logic controller (PLC) and operator workstations communicate over a fiber optic Ethernet link, and are linked to the workstations in CGP1. The PCS controls the process interlocks, and PID control loop set-point changes are made at the operator interface station (OIS). Local control stations are located in the field proximal to the relevant drives. The OISs allow drives to be selected to local or remote via the drive control popup. Statutory interlocks such as emergency stops are hardwired and apply in all modes of operation.


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14.2Chemical Grade Plant-1 Crushing and Processing Plants

The Chemical Grade Plant-1 (CGP1) process flowsheet includes the following major unit operations to produce chemical grade spodumene concentrates:

•Crushing

•Grinding and classification

•Heavy media separation

•WHIMS

•Coarse mineral flotation

•Regrinding

•Regrind coarse mineral flotation

•Fine mineral flotation

•Concentrate filtration

•Final tailings thickening and storage at the TSF

14.2.1Crushing Circuit (CR1)

CR1 provides crushed ore to both the TGP and CGP1. The CR1 flowsheet is shown in Figure 14-3. RoM ore is delivered from the mine to the RoM storage bin. Ore is drawn from the RoM bin using a variable speed plate feeder that feeds a vibrating grizzly with bars spaced at 125 mm. The +125 mm grizzly oversize fraction reports to a Metso C160 primary jaw crusher, where it is crushed before recombining with the -125 mm grizzly undersize on the crusher discharge conveyor. The crusher discharge conveyor conveys the crushed ore to a second vibrating grizzly. The grizzly oversize fraction is fed to the secondary crusher. The grizzly undersize fraction and the secondary crusher discharge are combined and then conveyed to a double-deck banana screen. The oversize from the top deck is conveyed to a tertiary cone crusher which is operated in closed circuit with the banana screen. The oversize from the bottom deck is conveyed to two quaternary cone crushers which are also operated in closed circuit with the banana screen. The -12 mm bottom deck screen undersize is the final crushed product, which is conveyed to a 4,200 t (live capacity) fine ore stockpile (FOS). A weightometer is installed ahead of the FOS feed conveyor to monitor and record the crushing plant production rate and overall tonnage of crushed ore delivered to the FOS. The crushing circuit is controlled from a dedicated LCR located within the main crushing building.


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Source: Greenbushes, 2022

Figure 14-3: CR1 Crushing Plant Flowsheet

14.2.2Chemical Grade Plant-1 (CGP1)

CGP1 was designed to process ore at the rate of 2 Mt/y of crushed ore and currently produces about 535 kt/y of spodumene concentrate grading 6% Li2O from ore containing about 2.5% Li2O. CGP1 produces concentrates from heavy medium separation (HMS), coarse flotation and fine flotation circuits which are combined as a single product. A simplified flowsheet for CGP1 is shown in Figure 14-4.


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Source: Greenbushes, 2021

Figure 14-4: CGP1 Process Flowsheet


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Grinding and Classification

Plant feed is conveyed to the grinding circuit and is first screened at 2 mm on the primary vibrating screen. The +2 mm fraction feeds a 3.6 m diameter by 4.06 m long ball mill which is operated in closed circuit with the primary screen. The -2 mm ground product is then advanced to the primary screening circuit that consists of four five-deck Derrick Stacksizers. The Stacksizers serve to classify the ground ore into four size fractions. The -2 mm + 600 µm fraction is processed in the HMS circuit, the -600 µm +200 µm fraction is processed by WHIMS followed by coarse flotation, and the -200 µm + 45 µm fraction is processed by WHIMS followed by fine flotation. The -45 µm fraction is too fine to process and is disposed of in the TSF. The -600 µm +200 µm and the -200 µm + 45 µm fractions may also be processed a series of spirals and wet table for tantalum recovery with the spiral tailings being fed to high intensity magnets, however, tantalum processing and recovery are not the focus of this review and will not be discussed.

HMS Circuit

The -2 mm +600 µm size fraction is processed in an HMS cyclone at a slurry feed specific gravity of about 2.55 which is adjusted with ferrosilicon to the correct specific gravity. The high specific gravity sink product is then processed through WHIMS to remove iron contaminants. The nonmagnetic fraction is finished concentrate and is screened and washed to remove residual ferrosilicon and then filtered on a horizontal vacuum filter. The HMS float product is advanced to the regrind circuit for further processing.

WHIMS and Coarse Flotation

The -600 µm +200 µm fraction is processed by WHIMS to remove magnetic contaminants. The magnetic fraction is waste and sent to the TSF thickener. The nonmagnetic fraction is classified into coarse and very coarse fractions which are processed in separate flotation circuits to recover spodumene flotation concentrates, which are then filtered on horizontal vacuum filters as finished concentrate. The tailings from both the coarse and very coarse flotation circuits are advanced to the regrind circuit for further processing.

WHIMS and Fine Flotation

The -200 µm +45 µm fraction is processed by WHIMS to remove magnetic contaminants. The magnetic fraction is waste and sent to the tailing thickener and then to the TSF. The nonmagnetic fraction is processed in a fine flotation circuit to recover spodumene flotation concentrate, which is then filtered as finished concentrate. The fine flotation tailing is waste and is sent to the tailing thickener and then to the TSF.

Regrinding and Regrind Flotation

The HMS float product and coarse and very coarse flotation tailings are reground and then classified into two size fractions. The -450 µm +250 µm fraction is processed in the regrind flotation circuit to produce a finished flotation concentrate which is then filtered and stockpiled in the concentrate storage bin. The regrind flotation tailing is recycled back to the regrind ball mill. The -250 µm +45 µm fraction is processed in the fine flotation circuit. The fine flotation concentrate is filtered and sent to the concentrate storage bin. The fine flotation tailing is a waste product which is thickened and disposed of in the TSF.

Tailings Thickening

Tailings are thickened and the thickener underflow is pumped to the TSF and thickener overflow is recycled as process water back to the process.

14.3Chemical Grade Plant-2 Crushing and Processing Plants

Crushing plant-2 (CR2) is a new crushing facility that was commissioned during 2019 and 2020 to provide crushed ore to CGP2. CGP2 is a new chemical grade processing plant that was


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commissioned during 2019 and 2020. CGP2 was designed to process 2.4 Mt/y of ore at an average grade of 1.7% Li2O to produce final concentrates containing greater than 6% Li2O and meet the specification for Greenbushes’ SC6.0 product. The flowsheet is very similar to CGP1 but was designed with a number of modifications based on HPGR (high pressure grinding rolls) comminution studies and CGP1 operational experience. A schematic flowsheet for CGP2 is shown in Figure 14-5. The most notable modifications include:

•Replacement of the ball mill grinding circuit with HPGRs

•Plant layout to simplify material flow and pumping duties

•Orientation of the HMS circuit to allow the sinks and floats products to be conveyed to the floats WHIMS circuit and sinks tantalum circuit

•Locating the coarse flotation circuits above the regrind mill to allow flow steams to gravity feed directly into the mill

•Orientation of the fines flotation cells in a staggered arrangement to allow the recleaner and cleaner flotation tails to flow by gravity into the cleaner and rougher cells, respectively.

•Orientation of the concentrate filtration circuit to allow the sinks to be conveyed to the sinks filter.

•Provision for sufficient elevation for the deslime and dewatering cyclone clusters to gravity feed to the thickener circuits located at ground level


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Source: Greenbushes, 2019

Figure 14-5: CGP2 Process Flowsheet


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14.3.1Crushing Plant-2 (CR2)

Ore is crushed to 80% passing (P80) 25 mm in a two-stage crushing circuit with a nominal feed capacity of 500 t/h, sufficient to crush 2.4 Mt/y on a 4,800 hr/year schedule, which allows for additional crushing capacity if it is needed. RoM ore is truck-hauled to the RoM pad and is stored next to the RoM bin in separate stockpiles of varying ore types and grades to facilitate blending of the feed into the crushing plant.

The RoM bin is fed from the various ore stockpiles with a front-end loader and is protected by a grizzly with bars on a 670 mm spacing. A dedicated rock breaker is provided to break grizzly oversize material. Feed to the RoM bins is controlled by a “dump–no dump” traffic signal mounted on the RoM pad adjacent to the RoM bin. The traffic signal is controlled by a level sensor mounted above the RoM bin and by the crusher operator.

Ore is drawn from the RoM bin using a variable speed apron feeder which feeds a vibrating grizzly with grizzly bars on a 100 mm spacing. The +100 mm grizzly oversize fraction reports to a Metso C160 primary jaw crusher, where it is crushed and combined with the grizzly undersize on the crusher discharge conveyor.

The primary crushed ore is then screened on a double-deck banana screen. The screen oversize fractions are conveyed to the secondary feed bin which feeds the secondary cone crusher. The undersize fraction (P80 25 mm) is conveyed to the fine ore stockpile ahead of the HPGR circuit. The fine ore stockpile has a “live” capacity of 7,200 t and total capacity of approximately 56,000 t. A weightometer is installed ahead of the fine ore stockpile to monitor and record the crushing plant production rate and overall tonnage of crushed ore delivered to the fine ore stockpile. The crushing circuit is controlled from a dedicated LCR controller located within the main crushing building.

14.3.2Chemical Grade Plant-2 (CGP2)

HPGR Circuit

The HPGR circuit is fed from the fine ore stockpile by a single reclaim conveyor and conveyed to HPGR feed bins via a series of transfer conveyors. Two HPGRs are installed in a duty/standby configuration. HPGR feed rate is measured by a weightometer on the HPGR feed transfer conveyor and is controlled to a set-point by independently varying the speed of the reclaim feeders. The HPGR product reports to the primary screens where the ore is separated into screen undersize, which enters the wet plant, and oversize which is recycled back to the HPGR. The HPGR circuit serves to crush the ore to -3 mm prior to processing in CGP2

Plant Feed Preparation

The -3 mm HPGR product is advanced to the primary screening circuit that consists of five-deck Derrick Stack Sizers. The stack sizers serve to screen the HPGR product into four size fractions. The -3 mm + 600 µm fraction is processed in the HMS circuit, the -600 µm +250 µm fraction is processed by WHIMS in the coarse flotation circuit and the -250 µm +45 µm fraction is processed by WHIMS followed by fine flotation. The -45 µm fraction is too fine to process and is disposed of in the TSF. The -600 µm +250 µm and the -250 µm +45 µm fractions may also processed through a series of spirals and wet tables for tantalum recovery with the spiral tailings being fed to high intensity magnets, however, tantalum processing and recovery will not be discussed in this review.


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HMS Circuit

The -3 mm +600 µm size fraction is processed in an HMS cyclone at a slurry feed specific gravity of about 2.55, which is adjusted with ferrosilicon to the correct specific gravity. The HMS sink product is further processed by WHIMS. The nonmagnetic WHIMS product is finished concentrate and is screened and washed to remove residual ferrosilicon and then filtered on a horizontal vacuum filter. The HMS float product is advanced to the regrind circuit for further processing.

WHIMS and Coarse Flotation

The -600 µm +250 µm fraction is processed by WHIMS to remove iron contaminants. The magnetic fraction is waste and sent to the TSF thickener. The nonmagnetic fraction is classified into coarse and very coarse fractions which are processed in separate flotation circuits to recover spodumene flotation concentrates. The flotation concentrates are filtered on horizontal vacuum filters and stockpiled in the concentrate storage bin. The tailings from both the coarse and very coarse flotation circuits are advanced to the regrind circuit for further processing.

Regrinding and Regrind Flotation

The HMS float product and the coarse and very coarse flotation tailings are reground and then classified into two size fractions. The -500 µm +250 µm fraction is processed in the regrind flotation circuit to produce a finished flotation concentrate which is then filtered and stockpiled in the concentrate storage bin. The regrind flotation tailing is recycled back to the regrind ball mill. The -250 µm +45 µm fraction is processed in the fine flotation circuit.

WHIMS and Fine Flotation

The -250 µm +45 µm fraction is processed by WHIMS to remove iron contaminants. The magnetic fraction is waste and sent to the tailing thickener and then to the TSF. The nonmagnetic fraction is processed in a fine flotation circuit to recover spodumene flotation concentrate, which is then filtered as finished concentrate. The fine flotation tailing is waste and is sent to the tailing thickener and then to the TSF.

Tailings Thickening

Tailings are thickened and the thickener underflow is pumped to the TSF and thickener overflow is recycled as process water back to the process.

14.4CGP1 and CGP2 Mass Yield and Recovery Projection

Greenbushes has developed mass yield models for both CGP1 and CGP2 which are used to predict concentrate mass yield and lithium recovery, based on ore grade, into concentrates containing 6% Li2O. The mass yield models were developed from on an analysis of CGP1 plant performance at different feed grades. The yield model for CGP2 is based on the CGP1 yield model but includes provision for additional lithium recovery based on the use of HPGRs for plant feed comminution as opposed to ball mill grinding as practiced in CGP1. The provision for incrementally higher lithium recovery in CGP2 is based on a metallurgical evaluation conducted by Greenbushes and the expectation that fewer unrecoverable fines will be generated during comminution with an HPGR compared to ball mill grinding.

Predicted mass yield and lithium recoveries versus ore grade are shown Table 14-1 for both CGP1 and CGP2 (assuming final concentrate grade of 6% Li2O). At the average planned feed grade of


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2.5% Li2O, the mass yield for CGP1 is estimated at 31.4% and lithium recovery is estimated at 75.2%. At the design feed grade of 1.7% Li2O for CGP2 the mass yield for is estimated at 20.2% and lithium recovery is estimated at 71.5%.

Table 14-1: CGP1 and CGP2 Model Yield and Li2O Recovery vs. Feed Grade


Feed Li2O%	CGP1		CGP2
	Yield (%)	Li2O Recovery (%)	Yield (%)	Li2O Recovery (%)
0.5	3.8	45.0	4.2	49.9
0.6	4.8	47.7	5.3	52.6
0.7	5.8	50.1	6.4	55.1
0.8	7.0	52.3	7.6	57.2
0.9	8.1	54.3	8.9	59.2
1.0	9.4	56.2	10.2	61.1
1.1	10.6	57.9	11.5	62.8
1.2	11.9	59.5	12.9	64.5
1.3	13.2	61.1	14.3	66.0
1.5	16.0	63.9	17.2	68.8
1.6	17.4	65.3	18.7	70.2
1.7	18.9	66.5	20.2	71.5
1.8	20.3	67.8	21.8	72.7
1.9	21.8	68.9	23.4	73.9
2.0	23.4	70.1	25.0	75.0
2.1	24.9	71.2	26.6	76.1
2.3	28.1	73.3	30.0	78.2
2.2	26.5	72.2	28.3	77.2
2.3	28.1	73.3	30.0	78.2
2.4	29.7	74.3	31.7	79.2
2.5	31.4	75.2	33.4	80.2
2.6	33.0	76.2	35.1	81.1
2.7	34.7	77.1	36.9	82.0
2.8	36.4	78.0	38.7	82.9
2.9	38.1	78.9	40.5	83.8
3.0	39.9	79.7	42.3	84.7

Source: Greenbushes and SRK, 2020

14.5TGP Performance

TGP performance for the period 2017-2021 (Jan to Sept) is summarized in Table 14-2. During this period ore tonnes processed ranged from 232,055 to 373,643 t and ore grades ranged from 3.72 to 3.96% Li2O. Overall lithium recovery ranged from 68.8 to 75.1% into six separate products (SC7.2-Standard, SC7.2-Premium, SC6.8, SC6.5, SC6.0 and SC5.0). Overall mass yield during this period ranged from 38.4 to 44.9%. Lithium recovery is estimated based on a recovery model developed from actual production, which predicts lithium recovery versus lithium ore grade. As shown in Table 14-2, there is good agreement between actual and modeled lithium recoveries. The TGP lithium recovery model is not shown in the Technical Report for proprietary reasons, but has been used in resource and reserve modeling to provide estimates of TGP mass yield and lithium recovery at various ore grades in the mine plan.

Li2O Recovery % = 24.658 x Plant Feed Li2O% -22.504


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Table 14-2: Production Summary for TGP


CGP-1	2017	2018	2019	2020	2021 (Jan-Sep)
Feed Tonnes	343,760	363,462	373,643	232,055	264,371
Feed (Li2O%)	3.96	3.93	3.75	3.72	3.86
Conc. Tonnes
SC7.2 - Standard	42,063	56,919	56,387	37,470	32,500
SC7.2 - Premium	35,808	26,621	23,164	13,349	20,151
SC6.8	12,340	13,380	11,063	9,115	9,482
SC6.5	12,718	14,183	14,532	14,536	16,611
SC6.0	6,190	1,322	849	257	917
SC5.0	45,200	47,735	40,529	14,478	33,988
Total Conc.	154,319	160,160	146,524	89,205	113,649

Avg Conc Grade (Li2O%)	6.62	6.64	6.68	6.94	6.56
Mass Yield (%)	44.9	44.1	39.2	38.4	43.0
Li2O Recovery (%)	75.1	74.5	69.8	71.6	73.1

Source: Greenbushes, 2021

14.6CGP1 Performance

The performance of CGP1 for the period 2016 to 2021 (Jan to Sep) is summarized in Table 14-3 Ore tonnes processed during this period ranged from 1.18 Mt to 1.82 Mt with ore grades ranging from 2.49 to 2.70% Li2O. During 2020, 1.40 Mt of ore were processed at an average grade of 2.51% Li2O with 74.9% of the contained lithium being recovered into concentrates averaging 6.06% Li2O, representing a mass yield of 31.1%. During 2021 (Jan to Sep), 1.36 Mt of ore were processed at an average grade of 2.57% Li2O. Lithium recovery averaged 75.2% into concentrates that averaged 6.07% Li2O representing a mass yield of 32%. CGP1 plant performance is compared to Greenbushes’ yield model for CGP1 in Table 14-4. Generally, Greenbushes CGP1 yield model provides 4a good prediction of plant performance. The mass yield equation developed for CGP1 is shown below and has been used in resource and reserve modeling to provide estimates of mass yield and lithium recovery at various ore grades in the mine plan.

Yield % = 9.362 x (Plant Feed LI2O%)^1.319

Li2O Recovery % = ((9.362 x (Plant Feed Li2O%)^1.319)*Concentrate Li20%)/Plant Feed Li2O%

Table 14-3: Summary of CGP1 Production


Year	Ore		Concentrate		Li2O Recovery (%)		Yield (%)
	Tonnes	Li2O%	Tonnes	Li2O%	Actual	Model	Actual	Model
2016	1,184,572	2.51	355,199	6.08	72.7	76.5	30.0	31.5
2017	1,652,259	2.46	492,151	6.04	73.2	75.5	29.8	30.7
2018	1,817,853	2.49	563,883	6.04	75.3	75.7	31.0	31.2
2019	1,659,148	2.70	565,438	6.05	77.0	77.1	34.1	34.6
2020	1,401,625	2.51	435,772	6.06	74.9	75.2	31.1	31.2
2021 (Jan- Sep)	1,362,294	2.57	435,722	6.07	75.2	75.9	32.0	32.7

Source: Greenbushes, 2021

Table 14-4: CGP1 Yield Model Prediction


Year	Actual Yield %	Model Yield %
2016	30.0	31.5
2017	29.8	30.7
2018	31.0	31.2


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2019	34.1	34.6
2020	30.1	31.2
2021 (Jan-Sep)	32.0	32.7

14.7CGP2 Performance

CGP2 commissioning began during September 2019 and continued through April 2020 and was then shut down and put on care and maintenance during the period of March 2020 to April 2021 due to market demand considerations. CGP2 was then put back into production during May 2021. CGP2 performance during 2020 (Jan to Apr) and 2021 (May to Sept) is summarized in Table 14-5 and compared with Greenbushes’ yield model for CGP2.

During the 2020 plant commissioning period from January to April CGP2 processed 280,108 t of ore at an average grade of 2.19% Li2O and recovered 52.9% of the lithium into 53,089 t of concentrate at an average grade of 6.10% Li2O and 0.93% Fe2O3. Concentrate yield for this period averaged 18.9%. Although product quality specifications were achieved, lithium recovery and concentrate yield were substantially below target.

During 2021 (May to September), CGP2 processed 847,058 t of ore at an average grade of 2.00% Li2O and recovered 51% of the lithium (versus a predicted recovery of 75%) into 145,230 t of concentrate at an average grade of 5.94% Li2O and 1.01% Fe2O3. Concentrate yield for this period averaged 17.2% versus the model yield projection of 25%. Although, product quality specifications were generally achieved, lithium recovery and concentrate yield were substantially below target.

Table 14-5: Summary of CGP2 Production 2020 (Jan-Apr) and 2021 (May-Sept)


Year	Month	Ore		Concentrate			Li2O Recovery (%)		Yield (%)
		Tonnes	Li2O%	Tonnes	Li2O%	Fe2O3 %	Actual	Model	Actual	Model
2020	Jan	67,404	2.37	13,394	6.21	0.93	52.0	78.9	19.9	31.2
2020	Feb	64,302	2.16	11,393	5.96	0.93	49.3	76.7	17.7	27.6
2020	Mar	79,731	2.08	14,865	6.01	0.95	54.2	75.9	18.6	26.3
2020	Apr	68,671	2.15	13,437	6.21	0.92	56.3	76.6	19.5	27.5
Total/Avg	2020	280,108	2.19	53,089	6.10	0.93	52.9	77.0	18.9	28.2
2021	May	155,051	2.03	30,546	5.98	1.01	57.9	75.3	19.7	25.5
2021	June	148,981	1.94	23,268	5.79	1.06	46.6	74.3	15.6	24.0
2021	July	164,446	1.99	29,824	6.02	0.98	54.9	74.9	18.1	24.8
2021	Aug	193,138	2.03	29,786	6.01	1.03	45.6	75.3	15.4	25.5
2021	Sept	185,442	2.02	31,806	5.90	0.97	50.0	75.2	17.1	25.3
Total/Avg	2021	847,058	2.00	145,230	5.94	1.01	51.0	75.0	17.2	25.0

Source: Greenbushes, 2021

•HPGR particle size distribution

•Primary screen deck opening size

•Wet high intensity magnetic separation (WHIMS) performance


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•Desliming cyclone performance

•Coarse flotation

•Fine flotation

An updated material balance indicated that lithium recovery in CGP2 was about 51% and lithium losses were about 49%. The source of the lithium losses were identified as occurring in the following areas:

•Desliming cyclones: 12%

•Flotation tailings: 17%

•Magnetic concentrates: 10%

•Other: 10%

•Total Li2O Losses: 49%

14.7.1Updated Yield Equation

Greenbushes metallurgical staff have developed a new yield equation for CGP2 based on actual performance during the period of 2019 to 2021. For the purposes of financial modeling SRK has assumed that this updated yield equation will represent CGP2 production during the period 2023 to 2024 while Greenbushes works to resolve process issues related to CGP2. SRK assumes that these process issues will be resolved by Q1 2025 and from that point on CGP2 yield will be represented by the yield equation that has been established for CGP1. It is noted that the yield equation that had been previously established for CGP2 included a yield premium attributed to inclusion of the HPGR in the process flowsheet which SRK does not believe has been validated. It is further noted that CGP2 and CGP1 flowsheets for are similar and both plants process ore from the same mining operation, as such, SRK expects that CGP2 will eventually achieve design product targets but cautions that at this point design performance of CGP2 remains to be demonstrated and has not yet been confirmed.

Yield % = 13.512 * Li2O% - 10.748

14.7.2CGP2 Process Performance Assessment

In order to further assess CGP2 performance issues, Greenbushes retained MinSol to undertake a performance assessment of CGP2 in November 2021 to provide a baseline for the current plant operating conditions versus design and to provide recommendations to optimize CGP2 performance with respect to concentrate grade and recovery. Following an initial plant survey, MinSol made the following key observations regarding CGP2 performance:

•The plant feed is finer than designed, and the variability in feed particle size distribution (PSD) and feed grade is directly impacting the plants performance and the metallurgical team’s ability to troubleshoot and optimize.

•Process instrumentation, particularly density meters, are inaccurate and are impeding the operating and metallurgical team’s ability to fully understand the mass balance, Li2O recovery and Li2O losses.

•Process split points (secondary screen, FBC1, FBC2, and Regrind FBC) are different from design, likely resulting in the following effects:

◦Higher deportment of solids to the fines WHIMS.

◦Coarser feed to the fine flotation circuit. Wider size distribution and coarser top size fed to the coarse flotation circuit.


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•The rougher flotation tailing grade is higher than design, accounting for additional Li2O losses. Based on the work completed to date, this likely will not be resolved by simple mechanical adjustments.

Based in this initial review, MinSol identified the following priority areas as a path forward to address CGP2 process performance:

•Undertake a comprehensive plant audit to better quantify the source and magnitude of recovery and losses.

•Engage instrument suppliers to rectify calibration and accuracy issues to enable plant balance and troubleshooting.

•Reduce the panel apertures on the secondary screen to allow subsequent reduction in primary stacksizer screen aperture to 600um per design.

•Modify the classifier split points per design to reduce load on fines WHIMS, increase coarse flotation feed and reduce the particle top size into the fines float.

•Undertake a detailed test program to assess the cause of high lithium losses during flotation

•Return the coarse thickener underflow back onto the process (currently a product stream that is directed to tailings).

These process issues will be resolved by Q1 2025 and from that point on CGP2 yield will be represented by the yield equation that has been established for CGP1. As stated on page 159 of the technical report, SRK comments that CGP2 and CGP1 flowsheets for are similar and both plants process ore from the same mining operation, as such, SRK believes that it is reasonable to expect that CGP2 will eventually achieve design production targets but cautions that at this point design performance of CGP2 remains to be demonstrated and has not yet been confirmed.

14.8SRK's Opinion

It is SRK’s opinion that the metallurgical testwork is sufficient to declare reserves, as reflected through its use of the resulting parameters in the reserves analysis. Technical reports for Greenbushes filed with future Form 10-K filings, beginning with the 2022 Form 10-K, will explicitly contain the qualified person’s opinion on the adequacy of the information in substantially the following form:

Greenbushes Chemical Grade Plant -1 (CGP1) is a mature operation and was used as basis for design of Greenbushes new Chemical Grade Plant-2 (CGP2), which would process ore from the same orebody using essentially the same flowsheet as CGP1. As a result, the design for CGP2 was based largely on the operating experience of Greenbushes with CGP1 and incorporation of process improvements identified by Greenbushes during operation of CGP1 rather than on new fundamental metallurgical testing. SRK is of the opinion that this is an adequate basis for CGP2 design given that the CGP2 process flowsheet is based on the CGP1 flowsheet and that CGP2 would process ore from the same orebody as CGP1. SRK notes that Greenbushes did conduct metallurgical testwork to support a change to the comminution circuit that incorporates high pressure grinding rolls (HPGR) in CGP2, instead of the ball mill grinding circuit used in CGP1.

14.9Product Specifications

CGP1 and CGP2 are operated to produce a spodumene concentrate designated as SC6.0. The specification for SC6.0 is a minimum grade of 6% Li2O and a maximum iron content of 1% Fe2O3. The moisture content is specified at 8% maximum (6% target) and there is no grain size specification. Greenbushes also produces a range of specialized spodumene concentrates in their


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technical grade plant. Table 14-6 provides a summary of the product specifications produced by Greenbushes.

Table 14-6: Greenbushes Lithium Product Specifications

Criteria

SC5.0

SC6.0

SC6.5

SC6.8

SC7.2 Std

SC7.2 Prem

Element (%)

Li2O

5 min

6 min

6.5 min

6.8 min

7.2 min

Fe2O3

0.13 max

1 max

0.25 max

0.20 min

0.12 max

Al2O3

24.5 min

25 min

SiO2

63.5 min

62.5 min

Na2O

0.50 max

0.35 max

K2O

0.60 max

0.30 max

P2O5

0.50 max

0.25 max

CaO

0.10 max

LOI

0.70 max

0.5 max

Grain Size (µm)

+1,000

<2%

+850

+500

+212

18% max

+125

3% max

+106

95%

+75

60% min

-75

80% min

Moisture (%)

8 max

6 target

Source: Greenbushes, 2020

14.10Process Operating Cost

Process operating costs for Greenbushes two crushing plant (CR-1 and CR-1), the TGP and the chemical grade plants (CGP1 and CGP2) are presented in this section.

14.10.1Crushing Plant Operating Costs

Operating costs for CR1 and CR2 are summarized in Table 14-7. During 2020 and 2021 (Jan-Sept), CR1 operating costs were reported at AUS$6.45 and AUS$6.34/t and averaged AUS$6.40/t. CR2 operating costs were reported at AUS$12.71/t during 2020 and AUS$5.56/t during 2021. The higher CR2 operating cost during 2020 is attributed to contractor crushing costs and transitioning to the newly constructed CR2 crushing facility. CR2 operating costs reported for 2021 (Jan-Sept) are considered most indicative of operating cost going forward for this facility. CR1 provides crushed ore to both the TGP and to CGP1 and CR2 provides crushed ore to CGP2.

Table 14-7: Crushing Circuit Opex (CR1 And CR2)


Cost Area	CR1 (AUS$)		CR2 (AUS$)
	2020	2021 (Jan-Sept)	2020	2021 (Jan-Sept)
Overhead	4,935,871	5,377,618	1,743,198	2,733,918
Employee Overhead	1,907,370	1,697,154	575,963	686,883
Feed Preparation	3,667,350	3,211,781	1,231,206	1,274,177
Ancillary Equipment	16,608	21,338	9,353	9,725
Safety	3,295	8,955	332	1,445
Total	10,530,494	10,316,846	3,560,052	4,706,148
Ore Tonnes Processed	1,633,679	1,626,666	280,008	847,058
AUS$/t Ore	6.45	6.34	12.71	5.56

Source: Greenbushes Foreman's Reports 2020 – 2021


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14.10.2TGP Operating Costs

TGP operating costs for 2020 and 2021 (Jan-Sept) are shown in Table 14-8. During 2020 TGP processing costs were reported at AUS$43.90/t ore processed and AUS$50.35/t inclusive of CR1 crushing costs. During 2021, processing costs were AUS$36.36/t ore processed and AUS$42.70/t inclusive of CR1 crushing costs. TGP processing costs averaged AUS$40.13/t during this period and averaged AUS$46.53 inclusive of CR1 crushing costs.

Table 14-8: TGP Operating Cost Summary


Cost Area	2020 (AUS$)	2021 (AUS$)
Overhead	4,487,873	3,530,692
Employee Overhead	2,292,996	2,341,067
Primary Grinding	1,466,007	1,285,106
SC 5.0 Circuit	297,956	365,268
Concentrate Circuit	1,476,231	1,762,173
Product Handling	1,094	270
Tailing Disposal	1,358	362
Tailings Dam	51,112	178,052
Ancillary Equipment	80,942	85,905
Safety	32,417	63,924
Total	10,187,986	9,612,819
TGP (AUS$/t ore)	43.90	36.36
CR1 + TGP (AUS$/t ore)	50.35	42.70
Ore Tonnes Processed	232,055	264,371
Concentrate Produced	89,017	113,659

Source: Greenbushes Forman's Report, 2020 and 2021

14.10.3CGP1 Operating Costs

CGP1 operating costs for 2020 and 2021 (Jan-Sept) are shown Table 14-9. During 2020, CGP1 processing costs were reported at AUS$17.28/t ore processed and AUS$23.73/t inclusive of CR1 crushing costs. During 2021, CGP1 costs were reported at AUS$16.16/t ore processed and AUS$22.50/t inclusive of CR1 crushing costs. CGP1 processing costs averaged AUS$16.73/t during this period and averaged AUS$23.13/t inclusive of CR1 crushing costs.


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Table 14-9: CGP1 Operating Cost Summary


Cost Area	AUS$
	2020	2021 (Jan-Sep)
Overhead	6,819,537	5,180,795
Employee Overhead	4,394,351	4,225,555
Primary Grinding	2,541,233	2,493,608
HMS Circuit	990,999	678,950
Product Handling	4,361	5,049
Tailing Disposal	821,241	843,499
Tailings Dam	353,936	991,904
Ancillary Equipment	69,963	85,905
Safety	60,219	94,966
Classification	442,497	460,847
Filtration	1,245,470	1,114,094
Hydrofloat	2,071,279	1,906,078
Regrinding	2,191,985	2,186,685
Flotation	1,803,323	1,520,798
WHIMS	415,077	227,434
Total	24,225,471	22,016,167
CGP1 (AUS$/t ore)	17.28	16.16
CR1 +CGP1 (AUS$/t ore)	23.73	22.50
Ore Tonnes Processed	1,401,625	1,362,294

Source: Greenbushes Foreman's Reports 2020-2021

14.10.4CGP2 Operating Costs

CGP2 operating costs for 2020 and 2021 (Jan-Sept) are shown Table 14-10. During 2020, CGP2 processing costs were reported at AUS$42.52/t ore processed and AUS$52.23/t inclusive of crushing costs. During 2021, CGP2 costs were reported at AUS$19.28/t ore processed and AUS$24.84/t inclusive of CR2 crushing costs. CR2 and CGP2 operating costs reported for 2020 are skewed due to plant commissioning activities during 2020. Operating costs reported for 2021 are considered most indicative of operating costs for these two facilities going forward.

Table 14-10: CGP2 Operating Cost Summary


Cost Area	2020 (Jan-Apr)	2021 (May-Sep)
Overhead	5,134,488	5,646,932
Employee Overhead	2,080,297	2,642,083
Primary Grinding	1,146,199	1,622,340
HMS Circuit	318,861	761,409
Product Handling	135,056	37,211
Tailing Disposal	543,611	297,542
Tailings Dam	94,834	356,527
Ancillary Equipment	420	1,909
Safety	6,891	52,598
Classification	336,469	800,993
Filtration	71,715	174,492
Hydrofloat	293,076	859,569
Regrinding	525,554	1,233,594
Flotation	830,468	1,076,136
WHIMS	390,874	770,182
Total	11,908,813	16,333,517
CGP2 (AUS$/t ore)	42.52	19.28
CR2 + CGP2 (AUS$/t ore)	52.23	24.84
Ore Tonnes Processed	280,108	847,058


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15Infrastructure

Greenbushes is a mature operating lithium hard rock open pit mining and concentration project that produces lithium carbonate. Access to the site is by paved highway off of a major Western Australian highway. Employees travel to the project from various communities in the region. The established facilities on the site include security fencing and guard house access, communications systems, access roads and interior site roads, administrative and other offices, change houses, existing mine services area (MSA), warehousing, shops, crushing plants, processing plants (CGP1/CGP2/TGP), tailings facilities, explosives storage facilities, water supply and distribution system with associated storage dams, power supply and distribution system, laboratory, fuel storage and delivery system, reverse-osmosis water treatment plant, health-safety-training offices, mine rescue area, storage sheds, mine waste storage area, miscellaneous waste storage facilities, and engineering offices. The concentrate is shipped by truck to port facilities located at Bunbury 90 km to the east of the Project. These facilities are in place and functional. An abandoned rail line is present north of the project but not currently used.

Several changes or modifications to the infrastructure are planned/or currently in progress. An upgraded 132 kV power line will be placed in service by 2023. A new Mine Service Area (MSA) will be constructed and operating by Q1 2022 to provide mine heavy and light equipment maintenance facilities and technical services offices as the existing MSA will be impacted by the planned pit progression. A mine access road will be added due to reduce truck traffic through Greenbushes. The current explosives handling facilities are being impacted by near-term pit expansion and new facilities are being completed to the west of the processing plant areas where they will not require to be moved again. The warehouse and laboratories are planned to be expanded. The tailings facilities will be expanded with the addition of a new two cell facility known as TSF4 located adjacent to and south of the existing TSF2 and TSF1 facilities. TSF1 will be expanded late in the mine life to meet tailings storage needs. The waste rock facilities will continue to expand on the west side of the pit toward the highway and south toward the permit boundary adjacent to TSF4.

15.1Access, Roads, and Local Communities

15.1.1Access

The project is located in southwest Western Australia, Australia south of the larger cities of Perth and Bunbury. The small town of Greenbushes, near the project location, is accessed by Australian Highway 1, known as the South Western Highway, and is approximately 80 km from Bunbury and 250 km from Perth. From Greenbushes the site is approximately 3 km south via paved Maranup Ford Road. Maranup Ford Road is called Stanifer St within the town of Greenbushes. Figure 15-1 shows the general location of the project.


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Source: SRK, 2020

Figure 15-1: Greenbushes Project General Location

15.1.2Airport

The nearest public airport is located approximately 60 km to the south in Manjimup. It is a small local airport with a 1,224 m asphalt runway. A larger airport with commercial flights is the Busselton Margaret River Airport located approximately 90 km to the northwest near Busselton, WA. A major international airport is located in Perth.

15.1.3Rail

A rail line is located approximate 4 km north of the Greenbushes project. Known as the Northcliffe branch, the railway is controlled by Pemberton Tramway Company under arrangement with the Public transport Authority. Talison is researching rehabilitation of the line and utilizing the line to transport concentrate to Bunbury port. Figure 15-2 shows the location of the line. At Bunbury it connects with lines to the north to Perth and through Perth to the east. Talison has been undertaking minor repair work to rehabilitate rail access to the site.


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Source: Economics and Industry Standing Committee The Management of Western Australia’s Freight Rail Network Report No. 3, October 2014

Figure 15-2: Western Australia Railroad Lines

15.1.4Port Facilities

Port facilities are available and used at Bunbury, 90 km north of the project. Bunbury is a major bulk-handling port in the southwest of Western Australia (WA). The Berth 8-8 shed is used for product storage. The bulk product is loaded into ships that are less than 229 m long and with a permissible draft of 11.6 m. The ship loader operates at 1,500 to 2,000 t/h depending on the configuration on the feed side. The feed can either be by Road Hopper or directly form the bulk storage at the higher rate.

The loading unit and storage sheds are shown in the photograph in Figure 15-3.


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Source: Port of Bunbury Web Site (www.byport.com.au/berth8) , 2020

Figure 15-3: Berth 8 at Bunbury Port

15.1.5Local Communities and Labor

The mine and processing facilities are located about 3 km south of the community of Greenbushes part of Bridgetown-Greenbushes Shire and the community of Greenbushes is the closest community to the site. Personnel working at the project typically live within a thirty-minute drive of the project. Table 15-1 shows the local communities and distance from the site. Note that Bunbury and Perth are included for reference as major cities in the region. Skilled labor is available in the region and Talison has an established work force with skilled labor. The current labor levels are approximately 659 people as summarized in Table 15-2. Full Time Equivalent (FTE) personnel refer to additional part-time contract personnel included to represent the total labor requirement by Talison.

Table 15-1: Local Communities


Community	Population	Distance from Greenbushes (km)
Greenbushes	390	3
Bridgetown	4,350	20
Manjimup	5,400	57
Nannup	1,400	50
Donnybrook	6,100	45
Boyup Brook	1,800	42
Bunbury	12,100	80
Perth	2,100,000	250

Source: SRK, 2020


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Table 15-2: Labor by Area


Area			2020
Administration			28
OHSTEC			22
Mining			37
Processing			109
Maintenance			49
Infrastructure			64
Shipping			6
Projects			7
Total Talison			321
L&H Mining Contractor			114
D&B Mining Contractor			32
Blasting Contractor			3
Total Contractors			149
FTE Personnel			188
Total Operational Workforce			659

Source: Talison, 2020

15.2Facilities

The Project facilities are located proximate to the site. The overall layout can be seen in Figure 15-4. The established facilities on the site include security fencing and guard house access, communications systems, access roads and interior site roads, administrative and other offices, change houses, existing mine services area (MSA), warehousing, shops, crushing plants, processing plants (CGP1/CGP2/TGP), tailings facilities, explosives storage facilities, water supply and distribution system, power supply and distribution system, laboratory, fuel storage and delivery system, reverse-osmosis water treatment plant, health-safety-training offices, mine rescue area, storage sheds, mine waste storage area, miscellaneous waste storage facilities, and engineering offices. These facilities are in place and functional.


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Source: SRK, 2020

Figure 15-4: General Description with Facilities Map

15.2.1Key Changes to Existing Infrastructure

Several changes or modifications to the infrastructure are planned/or currently in progress. An upgraded 132 kV power line will be placed in service by 2023. A new Mine Service Area (MSA) will be constructed and operating by Q1 2023 to provide mine heavy and light equipment maintenance facilities and technical services offices as the existing MSA will be impacted by the planned pit progression. A mine access road will be added due to reduce truck traffic through Greenbushes. The current explosives handling facilities are being impacted by near-term pit expansion and new facilities are being completed to the west of the processing plant areas where they will not require to be moved again. The warehouse and laboratories are planned to be expanded. The tailings facilities will be expanded with the addition of a new two cell facility known as TSF4 located adjacent to and south of the existing TSF2 and TSF1 facilities. TSF1 will be expanded late in the mine life to meet tailings storage needs. The tailings storage is discussed in detail in Section 15.6.

15.2.2Powerline Upgrade

The site power system is being upgraded in 2022 to include a 15.3 km 132 kV power line routed to the north from Bridgetown North and then to the west along the south side of TSF4 past the end west of TSF4 and then north to the future location of CGP3/CGP4. The upgrade will include a 132 kV outdoor busbar with 2 x 60 MVA transformer circuits and a 22 kV switch room. Additionally, there will


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be a combined 132 kV relay room and Western Power 132 kV control and measuring room to upgrade the power to the site for potential future expansion.

15.2.3Maintenance Service Area (MSA)

The current MSA is located on the IP dump near the existing open pit. The pit will consume the MSA, and relocation is necessary. The new MSA will be located to the northeast of the pit area as seen in Figure 15-4. The new MSA move is in progress and will be completed by Q1 2023. The facility supports maintenance activities on heavy mobile equipment including drill and blast equipment. The facility includes welding shops, support facilities including heavy and light equipment wash bays, lube storage and dispensing, tire handling and storage facilities, laydown yards, mining equipment parking, lighting, diesel storage and delivery facilities for light and heavy equipment, and a technical services complex with three separate offices and shared common areas. A parking area for contractor and employee parking is included in the facility design. The new facilities have a separate water supply, surface water control ditches and ponds, and waste-water treatment system. Construction is being completed in three stages with a pre-construction phase that includes bulk earthworks, geotechnical investigation, design, and tender which is currently being completed. The second stage will include the first stage of construction that will occur in 2020 followed by a further expansion that will be tied to potential future expansion of the mining fleet in five years. Figure 15-5: shows the new MSA layout.

Source: Talison, 2020

Figure 15-5: Layout of the New MSA Facilities


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15.2.4Mine Access Road

The existing route for the trucks transporting the concentrate, is to travel along the South West Highway from Bunbury and then traverse through the Greenbushes townsite via Stanifer street to the Greenbushes Lithium Mine. The number of supply and product transport truck movements associated with the mine is expected to increase in the future. An investigation was carried out to identify what alternative routes there were for the trucks to access the Mine which did not require them to traverse through the Greenbushes townsite. An alternate route to the west of the Greenbushes townsite was located and a project to construct a new road was designed. This project is planned for 2023.

15.2.5Explosives Storage Area

The current ammonium nitrate (AN) storage and batching facilities and primer storage facilities will be impacted by future pit expansion to the east. The new facilities allow for larger capacity and the expansion will be completed in stages as needed. The new location is the west of the processing plant on the west side of Maranup Ford Road between Cowan Brook Dam and Austin’s Dam as shown in Figure 15-4. Specifically, the new facility Talison scope includes:

•AN bulk storage shed

•Two explosives magazines for storage of high explosives and detonators

•Two additional explosives magazines have been deferred until 2024

•Crib room, office, and ablution block, with explosives mixing and delivery truck (MMU) maintenance workshop

•Supporting utilities and services such as storm water and sewerage systems, redirection of a Talison water supply pipeline from Cowan Brook Dam to Southampton Dam, lighting and services

•Site security fencing, swipe card-controlled access gates and turnstile pedestrian gate

•Site closed circuit television (CCTV) cameras

•Fire water tanks and pumps to provide bushfire and ember attack protection

•Construction of access road and road crossings

The explosives are supplied by a contractor who will operate the facility and also supply additional equipment as part of their contract. The move is planned to be completed in 2021.

15.2.6Warehouse Workshop Expansion

The warehouse workshop is planned to be expanded for additional space. The design work has been initiated and the expansion will be completed in 2024.

15.2.7Laboratory Expansion

The laboratory geological preparation facility is being modified to provide additional materials handling capacity. The lab upgrade also will include an XRF upgrade to handle additional testing. The expansion is expected to be complete in 2024.

15.3Waste Rock Storage and Temporary Stockpiles

Waste rock storage and temporary stockpiles are discussed in detail in Section 13.6.


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15.4Energy

15.4.1Power

Greenbushes has a mature power delivery system with two feeds from Western Power with wholesale power from Alinta Energy through the Talison’s retailer Perth Energy. The power supply system is in a loop configuration so that the project has redundancy (Figure 15-6). main Western power line runs from north, west of the town of Greenbushes, along the west side of the Project parallel to the South Western Highway to a point where it turns due west to a point approximately aligned with the center of the deposit and then continues due south. The Talison 22 kV power system connects to the north near the town of Greenbushes and then to the south near the future location of TSF4. The Talison 22 kV connection from the south runs along the TSF1 and TSF2 to the west then turns north to the processing facilities on the north end of the deposit where it connects with the Talison north feed. Portions of the Talison supply system is on poles above ground other portions are underground to reduced congestion with other infrastructure and facilities.

Source: Talison, 2020

Figure 15-6: Greenbushes Power Layout

Talison has a current connected load of approximately 20 MW and a running load of approximately 16 MW. The project used 1.1 MWh in 2019 and annually spends approximately US$9 million on power at a unit rate of approximately US$0.085/kWh.


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15.4.2Propane

Propane (LPG in Au) is used for drying in the TGP, laboratory sample furnaces, shipping floor sweeping. The site consumes approximately 1.2 M liters annually. Storage is on site in LPG tanks. A 118,000-liter bulk tank is near TGP. A cylinder bank (210 kg capacity) is located at the lab. Two small 45 kg cylinders are used by the sweepers. Supply is by tanker truck for the large bulk tank.

15.4.3Diesel

The site has four diesel tanks with a capacity of 55,000 liters each. Three are associated with the current MSA. One is located in the processing area. The three tanks associated with the existing MSA will be removed from service and disposed of once the new MSA is constructed. The new MSA will have two new 220,000 liter tanks when initial construction is complete. An additional 220,000 liter tank will be added in 2025, with the first site majority of the use is for the mining fleet. Supply is by tanker truck.

15.4.4Gasoline

No gasoline is stored on site.

15.5Water and Pipelines

Water Supply and Storage

Mine water supply is sourced from surface water impoundments for capture of precipitation runoff, pumping from sumps within the mining excavations and recycled from multiple TSFs. No mine water is sourced directly from groundwater aquifers through production or dewatering wells. This lack of significant groundwater production for mine usage indicates the overall importance of the surface water and TSF water management systems to the operational capacity of Greenbushes.

Existing water sources and storage facilities at the mine include active and flooded historical mining excavations (C1/C2/C3 pits, and Vulcan pit), surface water impoundments/dams (Cowan Brook, Southampton/Austin’s Dam, Clear Water Dam, Clear Water Pond, Mt. Jones Dam, Norilup Dam, Dumpling Gully Dam, Swenkies Dam, and Tin Shed Dam), and tailings storage facilities (TSF1 and TSF2). Additional near-term storage is planned through the construction of TSF4 and expansion of the waste rock landform (WRL) storage infrastructure. The majority of these water sources and impoundments are linked through constructed surface pumps and conveyance.

Water Balance

SRK reviewed a water balance model constructed in 2018 to support current and future proposed operations at Greenbushes (GHD, 2018). The model included all existing water sources and storage facilities, pumps and transfer capabilities, and operating rules. On top of this base was added the proposed additional storage infrastructure and pump/pipeline modifications to increase optimization. In addition, numerous assumptions were applied where empirical data were not available to support operating methodology of the site wide water supply system.

The results of the water balance model indicated that there could be significant water supply shortfalls by 2025, potentially limiting operation of the proposed larger network of processing facilities, with significant depletion of water levels within the storage facilities by 2023. While the addition of water storage within TSF4, and more significantly the WRL, do serve to alleviate the


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magnitude of near-term supply shortages most commonly in the summer months; these structures will not serve to reduce the frequency of these supply shortfalls (GHD, 2018). Long term security of supply appears to be challenged.

Long term security of water supply is a significant risk for Greenbushes, given the scope of the proposed expansion of operations. Additional water storage structures, beyond those currently proposed, should be considered. It is recommended that those structures be located outside of the current facility catchment to maximize new supply sources.

15.6Tailings Disposal

SRK performed a review of tailings data, relevant to the estimation of reserves, provided by Talison. Greenbushes has four tailings storage facilities (TSF) and SRK’s review focused on the currently active TSF and plans for two future TSFs. Documentation available to SRK included the design data, the two most recent annual site inspection reports, and supporting data. SRK’s review is for the purpose of supporting the resource and reserve disclosure reported herein and should not be interpreted by the reader to reflect an analysis of or any certification of TSF dam stability or associated risk and in no way should be interpreted to substitute for the role or any responsibilities of the Engineer of Record for the TSFs. SRK’s scope of work included review to confirm that applicable design documentation exists, review the operational aspect of the TSFs, check that the planned TSF capacity is adequate to support extraction of the full reserve for the Project, and to note risk and opportunity associated with the operation and capacity of the TSF, as applicable to estimation of reserves.

15.6.1General Overview

Greenbushes has four TSFs on site. Greenbushes utilizes pumped slurry tailings through pipelines that are deposited by spigot in conventional tailings storage for long term tailings storage. The four tailings storage areas are designated TSF1, TSF2, TSF3, and TSF4. TSF2 is the only currently active TSF. Figure 15-7 shows the existing and future tailings locations.

•TSF1, currently approximately 110 ha in size, was constructed in 1970 and operated for approximately 30 years mainly for tantalum production and was placed on care and maintenance in 2006. It was initially laid out in a three-cell configuration but has subsequently modified into a single cell with a central decant. At the existing mRL 1280 crest it holds approximately 333 Mt of storage capacity. A 5 m high upstream lift was constructed in 2018 using mine overburden materials. This capacity allows TSF1 to be available for emergency storage of tailings if needed (GHD/Talison, 2020). The tailings facility will be upgraded, and additional lifts added for further use late in the mine life. Talison has near term plans to reprocess tailings from the TSF1 in the Tailings Reprocessing Plant (TRP).

•TSF2, currently approximately 35 ha in size, is the only active TSF and has been in operation since 2006. The facility was constructed in 2006 with additional upstream raises that elevated the crest level to mRL 1271, the current elevation, which is approximately 36 m above lowest ground level, (GHD/Talison, 2020). The TSF will eventually be elevated to a final elevation of mRL 1280. The additional planned additional capacity will be 9.9 Mt.

•TSF3 is a small (5 ha) historic tailings storage area approximately 1 km south of TSF1 and is closed and undergoing trial reclamation. The small storage pre-dates 1943 and was historically used to dispose of slimes from the Tin Shed operations, which are thought to


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contain about 800,000 t of process waste. Local information is that deposition ceased around the late 1980s or early 1990s (GHD/Talison, 2020).

•TSF4 is a two-cell 240 ha new downstream construction slated for 2021/2022 that will be the primary storage area for the remaining LoM. The TSF4 facility will have two-cell design adjacent to TSF1 for a portion of the northern edge. The two-cell system will allow balancing of the fill between the cells while the facility is in service from 2022 through 2048. The final elevation will be 1295 mRL. The total capacity of the facility is planned to be 68.2 Mt.

•Water is managed at the TSF1 and TSF2 facilities through local ponds. The 8.5 ha old Clear Water Pond (CWP) is a small water storage facility located between TSF1 and TSF2. It held water from the TSF2 decant system before water was returned to the process facilities. CWP now acts as the TSF2 decant system. The New Clear Water Pond (NCWP) is the primary water storage for TSF2. Water management, as summarized by GHD (GHD/Talison, 2020) follows:

Rainfall runoff from the surfaces directly surrounding TSF 1 and TSF 2 collects within local surface water ponds. Runoff from the western side of TSF 1 and TSF 2 embankments and foundations is directed into open drains and pipe work running alongside Maranup Ford Road. The seepage water from TSF1 eastern wall reports back to Vultan dam via existing old mining channels. Vultan water is then pumped back to the TSF2 decant and into process.

Decant water from TSF 2 is pumped via a floating suction decant to the NCWP from where it is pumped back to CGP1, CGP2 and TGP. Water is pulled from the circuit into the ATP where the processed water is returned back to the mine process water circuit.

Surface water runoff on the southern and eastern sides of TSF 1 is diverted east by a channel into the Old Pits and is pumped back into CWP where it is returned to the plant water circuit.

At the time of this audit there was no decant pond on TSF 1 and no active return water system in operation.

Decant water from TSF 2 is pumped via a floating suction decant to the NCWP and mainly returned to the plant water circuit after removal of arsenic or to Austin’s Dam for return to the plant when required. Surplus water is pumped to Southampton Dam and some surplus from there is stored in underground workings until recovered in summer. Cowan Brook Dam is also used on occasion to top up the plant water circuit during dry periods.

The TSF4 water handling system will include a centralized tailings pumping station capable of moving tails from CGP1, CGP2, and TGP, power reticulation install and upgrade to the existing CGP1 tails booster pump system. The TSF4 design includes a decant system, underdrainage, toe drains, surface collection trenches and the associated sediment collection ponds


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Source: Talison, 2020

Figure 15-7: Greenbushes Tailings Locations

15.6.2Design Responsibilities and Engineer of Record

Design responsibilities for the active tailings facilities have been performed by GHD. SRK documents the key engineering activities and the companies involved as follows:

•TSF1

◦D E Cooper & Associates (DCA) is understood to have been the original design engineer and Talison has limited documentation through 1998 from DCA

◦GHD has done inspections since 2013 including this facility


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•TSF2

◦Constructed in 2006 under the direction of DCA

–Stability modelling (DCA 2005) confirmed that the embankments met government guidelines and the stability modelling assumptions were confirmed by monitoring readings (GHD 2013a). Further geotechnical investigation and analyses indicated that there was some potential for liquefaction of the tailings under earthquake conditions (GHD 2013c). After consideration of alternatives, it was decided that a stability buttress should be added to the southern and western walls. To achieve the wider footprint, part of the Maranup Ford road was realigned further to the west. The current design also incorporates internal seepage interceptor drains with discharge pipes carrying the water through the embankment to an external collection system. (GHD)

◦GHD is and will be the Engineer of Record for TSF2.

◦GHD has performed inspections on this facility since 2013

◦GHD completed an engineering design for the development of TSF2 from mRL 1265 to mRL 1280 in 2015. An updated design was completed in 2020 to raise the facility to mRL 1275.

◦GHD monitored construction (Feb 2019 – Oct 2019) and provided a summary construction report at the completion of construction. (GHD, TSF2 Construction Report, February 2020)

◦A Dambreak Study was conducted by GHD in 2019 updating the 2014 Dambreak Study by GHD (GHD Draft Report dated October 2019)

–Key findings from GHD included potential impact of TSF2 breaches to the north or west on CGP2 and other planned future facilities at mRL 1300. Based on GHD’s analysis, breaches at mRL 1280 would have significantly lower impact

–GHD provided a preliminary engineering design for a ground improvement project on TSF2 in 2021 that will support buttressing the central section of theTSF2 western wall.

◦GHD will have design responsibilities for the active facilities TSF 2 and the future TSF4

•TSF3

◦There is limited design data available for TSF3 and no significant deposition has occurred since 2008. The facility is in the process of being reclaimed. GHD continues to inspect the area during their annual inspections.

•TSF4

◦TSF4 is new construction and GHD is the Engineer of Record for the design and will participate in the construction and monitoring of the construction. Talison plans to use GHD to monitor the ongoing operations consistent with their use on the annual tailings dam inspections.

15.6.3Production Capacities and Schedule

The production schedule over the life of mine requires as total storage capacity of 80.0 million m3 (112.1 million tailings tonnes @1.4 t/m3) of tailings. This equates to approximately 2.3 million m3 per year of tailings placement. The tailings construction plans allow for placement of tailings in two or more locations to balance rate of rise needs. The tailings placement schedule with start and end year as well as capacity available and used is summarized in Table 15-3:.


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Table 15-3: Capacity Confirmation


Storage Location	Status	Start (year)	Finish (year)	Size (ha)	Current mRL	Final mRL	Additional Capacity (Millions of m3)	Capacity Used (Millions of m3)
TSF1	Inactive	2044	2055	110	1280	1300	25.5	25.4
TSF2	Active	2020	2023	35	1271	1280	5.9	5.9
TSF4	Construction	2022	2048	240	N/A	1295	48.7	48.7
Total Capacity (accounting for design freeboard)							80.1	80.0

Source: SRK, 2021

15.6.4Tailings Risk Discussion

Several risks are noted in review of the tailings data:

•Tailings storage facilities are typically one of the highest risk aspects of a mining operation. Even if the probability of occurrence of a major incident is low, the magnitude of potential impact is often high which results in overall high risk to the business. Therefore, while SRK is not evaluating TSF dam stability or risk, it recommends that Talison follows all recommendations from its Engineer of Record in a prompt manner.

•SRK recommends a Comprehensive Dam Safety Review by a third party to be completed on all TSFs as soon as possible. This review will further clarify any issues of significance that have not been flagged by GHD and will provide guidance to Talison on any other key issues. The review will also note any deficiencies in the underlying design data and could flag additional technical work (geotech, hydro, materials characterization) to support future design or mitigation needs.

•The timing on construction of TSF4 is important from an operational flexibility standpoint with TSF2 being the only active TSF and TSF1 only available for emergency use. SRK recommends accelerating TSF4 construction, if possible.

•The TSF1 design will require additional geotechnical and hydrogeology work to clarify design parameters and understand clearly the risks associated with the in-situ tailings due to the historic nature of TSF1 and lack of detailed historic design information. This work has begun, but SRK notes it should progress so that a more detailed plan is developed for TSF1 so that it can be available if needed for future expansion or if problems develop with the other active TSFs. SRK recommends that Talison follow all recommendations by the EOR.

•SRK recommends that the tailings life of mine planning be integrated into the LoM mine planning effort to confirm long term planning needs and to prioritize issues if expansion plans move forward.


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16Market Studies

SRK was engaged by Albemarle to perform a preliminary market study to support resource and reserve estimates for Albemarle’s mining operations. This report covers the Greenbushes mine and concentrator and summarizes data from the preliminary market study, as applicable to the estimate of resources and reserves for Greenbushes. The preliminary market study and summary detail contained herein present a forward-looking price forecast for applicable lithium products. This includes forward-looking assumptions around supply and demand. SRK notes that as with any forward-looking assumptions, the eventual future outcome may deviate significantly from the forward-looking assumptions.

The Greenbushes facilities produce a range of spodumene concentrate products that are sold into technical and chemical lithium markets. As discussed in Section 11.5, Talison’s ability to predict lithium production for technical grade product at a level that meets the standard of uncertainty for a reserve requires grade control drilling and therefore has been excluded from this reserve estimate. Instead of predicting production of technical grade concentrate, SRK has assumed that all product produced by the operation is sold into chemical markets. In SRK’s opinion, from a geological standpoint this is a reasonable assumption as any material that is appropriate to feed technical grade production can also be used for chemical grade feed. In SRK’s opinion, it is also reasonable (and somewhat conservative) from an economic standpoint as the weighted average price Talison has historically received for technical grade concentrates is higher than the average price for chemical grade concentrate (i.e., assuming receipt of chemical grade revenue likely understates the value of production that would typically go to technical grade markets).

As the technical grade production is not included in the reserve, it has also been excluded from this market discussion. For reference, based on a review of Talison’s internal forecasts that do include technical grade planning, technical grade production comprises approximately 10% of volume and revenue for the period from 2021 to 2023 which further supports the exclusion of technical grade product as reasonable (i.e. its materiality to the operation is limited).

The Greenbushes operation also has the ability to produce tantalum concentrate. However, Talison does not own the rights to this production and does not receive any economic benefit from it. Therefore, it has not been included in this analysis.

16.1Market Information

This section presents the summary findings for the preliminary market study completed by SRK on lithium.

16.1.1Lithium Market Introduction

Historically, (i.e., prior to the 2000s), the dominant use of lithium was in ceramics, glasses, and greases. However, with the boom in the use of portable electronic devices, starting with mobile phones and laptop computers and now covering a wide range of consumer electronic products, the use of lithium in lithium ion batteries has grown from a fringe portion of the market to the most significant portion of demand. Over the last few years, the development of the battery electric vehicle (BEV) industry has further driven demand growth in lithium usage in lithium ion batteries. If BEVs expand from their current niche position to a mainstream method of transportation, lithium demand in BEV batteries will overwhelm all historic uses and require multiples of historic levels of production.


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Lithium is currently recovered from hard rock sources and evaporative brines. Current and potential future hard rock sources include minerals such as spodumene, lepidolite, petalite, zinnwaldite, jadarite, and lithium-bearing clays. Most brine operations pump a chloride-rich solution in which most of lithium occurs as lithium chloride (LiCl) (there is more limited production and production potential from carbonate brines). For the rest of this document, unless specifically noted, when referring to brine production SRK will be referring to chloride brines, and when referring to hard rock, again unless specifically noted, SRK will be referring to spodumene. This is to minimize the complexity of this explanation and given these are the dominant forms of production from both sources, this simplification covers the majority of current and future production sources.

For use in batteries appropriate for electric vehicles, lithium is generally used in either a carbonate or hydroxide form. For this type of production, both brine and hard rock sources require separation of lithium and then conversion to a form that can be purified into a feed solution to produce lithium carbonate, which is then converted to a hydroxide or, in some cases, directly produces lithium hydroxide without first going through the carbonate form. Current practice allows direct production of lithium carbonate from either brines or hard rock sources, whereas only hard rock sources directly produce lithium hydroxide (brine operations all first produce lithium carbonate which is then converted to hydroxide, if desired). However, multiple parties are evaluating the potential to produce lithium hydroxide directly from a brine source, and there is a reasonable probability this dynamic will change over time.

For existing producers, the major differences in cost between brine and hard rock include the following:

•Hard rock sources require additional mining, concentrating, and roasting/leaching costs.

•For a final hydroxide product, brine sources first produce a lithium carbonate that requires further conversion costs, whereas hard rock sources can be used to directly produce a lithium hydroxide from a mineral concentrate.

•Brine sources require concentration prior to production, as natural brine solutions are generally too diluted to allow for precipitation of lithium in a salable form.

•Brine sources generally have a higher level of impurities (in solution) that require removal.

Historically, brine producers have had a significant production cost advantage over hard rock producers for lithium carbonate and a smaller cost advantage for lithium hydroxide. Hard rock production generally provided swing production for these industries, as well as satisfied other aspects of the lithium market (e.g., glasses and ceramics). As many new producers enter the market on both the hard rock and brine side, this prior norm is changing, as many of the new brine producers have relatively high operating costs when compared to traditional hard rock production, especially with respect to the production of lithium hydroxide.

16.1.2Lithium Demand


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lithium in the recent nascent adoption of battery electric vehicles (BEVs) has quickly become the most important aspect of overall lithium demand, not just within the battery sector of demand, but for lithium demand on whole. This is seen in Figure 16-1, with BEV market share rapidly growing in importance and driving overall demand growth in the lithium industry.

Source: SRK, 2021

Figure 16-1: Global Electric Vehicle Lithium Demand

Going forward, the range of potential future demand scenarios is heavily dependent upon the adoption of BEVs as a significant component of automotive sales and the technology utilized in their batteries. Therefore, there remains significant uncertainty in future demand growth associated with BEVs, with general personal vehicle ownership likely to change (i.e., ride hailing and car share), potential battery chemistry changes (e.g., solid-state batteries), and changes in battery pack sizes. In addition, there is uncertainty around other potential sources of lithium demand (e.g., home power storage, grid power storage, commercial transport, public transport, demand destruction in traditional markets, etc.).

Nonetheless, acceleration in the growth of the BEV industry appears to have a high probability. Demand growth in 2019 and 2020 were relatively disappointing but were likely driven by external factors (e.g. changes in BEV subsidies in jurisdictions such as China as well as the global COVID-19 pandemic) that have largely moved through the system. Even with COVID-19 still a major health issue, SRK believes the lockdowns of early 2020 that created major economic damage will not be repeated as governments are learning to better manage the disease. Most auto makers and other industry participants have invested heavily to expand into BEV production and transition overall toward expectations of future dominant consumption of EVs instead of internal combustion engine (ICE)-based vehicles. However, in SRK’s opinion, there remain several barriers to BEVs becoming the dominant type of vehicle sales, including:

•Costs

•Changes in buyer perceptions

•Raw material availability

Currently, for BEVs to have a range that is competitive with ICE-powered cars, they must have a large and expensive battery pack. Based on recent estimates by Bloomberg New Energy Finance (BNEF), in 2020, the battery pack comprised approximately one third of the total up-front cost of a


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new BEV. For higher end vehicles, this cost is manageable in the context of the overall vehicle cost. However, for entry level vehicles, the cost of the battery pack remains a hurdle to BEVs being competitive with ICE cars. The price of batteries has been rapidly decreasing as the scale of production has increased and technological advances have focused on cost reduction. A 2019 prediction by BNEF assumes that these trends will continue and the threshold where BEVs become generally affordable (US$90/kWh on unit basis for the battery pack) is predicted to occur in 2022.

Consumer preference is a major barrier that will have to be passed to allow widespread adoption of BEVs. Currently, SRK believes this is an issue because many of the auto manufacturers have treated BEVs as niche vehicles that were meant to appeal to buyers wishing to make a statement. While this works for the niche population that wishes their vehicle to make such a statement (likely following the Toyota Prius strategy), a typical buyer will likely be turned off by this style of marketing. Further, to date, auto manufactures have focused on developing electric vehicles as sedans and compact cars and have not targeted the booming SUV and pickup truck market. However, these trends are changing, with Tesla producing cars that have widespread appeal from a style standpoint and take advantage of the inherent performance advantages of BEVs (e.g. outperformance relative to ICEs for handling and acceleration) and not surprising leading all other global manufacturers in sales. In addition, SUV BEV models started sales in 2020 and BEV pickup truck sales are expected to start in 2021.

In SRK’s opinion, raw materials and supply chain limitations are the other major risk to widespread EV adoption. SRK does not expect this bottleneck to come from lithium, at least in the short- to mid-term (longer term, it may become an issue, but widespread recycling will likely mitigate this risk). Downstream production (e.g. battery-grade lithium carbonate/hydroxide, cathode precursor, cathodes, batteries, etc.) also appears to have a low risk of creating a bottleneck, as extensive investment in this manufacturing capacity has already happened and continues. However, other raw materials, especially nickel and cobalt, both of which are critical to the key cathode technology of NMC and NCA, appear to create future supply risk. SRK believes it is likely that additional nickel supply can be developed at a cost (i.e. higher nickel prices will be required), but adequate cobalt supply to maintain current levels of cobalt will likely not be feasible. The most likely solution to this bottleneck will be the elimination (or reduction to minimal levels) of cobalt in BEV batteries through technological improvements.

Overall, given the discussion above, SRK expects near- to mid-term growth in the BEV market to pick back up from the two recent relatively slow growth years. However, there remains the risk that BEVs stay a niche vehicle or are eliminated completely (although this is looking less and less likely). The most serious risks that SRK can foresee are technology related, such as substitution of alternative technology (e.g., fuel cells make a comeback), battery costs plateau, and BEVs remain uncompetitive on low-cost vehicles or cobalt cannot be substituted out of batteries and adequate supply cannot be sourced. Under any of these three scenarios, demand for lithium from BEVs would be severely curtailed (if not eliminated). However, overall SRK does not view these downside scenarios as likely.

To quantify potential demand growth, SRK constructed a basic demand model. In its model, SRK ran three scenarios through 2029:

•The first scenario, as the base case, assumes that demand growth will continue the robust trend of late 2020 as government subsidies bridge the gap to lower battery costs and the


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associated reduced costs make EVs fully competitive. Further, the wide range of new models under development by the major auto manufacturers will appeal to the typical consumer. Growth rates start to taper in the latter half of the decade as BEVs hit around 45% of sales in 2028 and continue to decline given the high penetration. 2030 BEV sales are predicted as 55% of global automotive sales in this scenario.

•The second scenario, as the high scenario, assumes that demand growth accelerates more quickly in 2023 and 2024 with falling battery prices and then starts to slow as EVs reach 30% market penetration (likely limited by manufacturing capacity), but continues at a faster growth rate than the base case with 50% market penetration by 2027 and more than 70% by 2030. This scenario is feasible if new BEV models are highly desirable to consumers, subsidies can fully bridge the gap to battery costs dropping to the point that BEVs are cheaper to buy than economy gas powered vehicles (i.e., sub US$60/kWh battery costs), and the manufacturing supply chain can support this growth. Alternatively, even with somewhat slower personal consumer purchases of BEVs, significant uptake of commercial vehicles, such as large trucks and taxis, or the combination of automotive grown and major growth in grid or home power storage could also drive this scenario.

•The third scenario, as the low scenario,1,2 assumes that the demand growth spike in late 2020 is not sustained as lower income population stays away from BEVs. Around 2023, with battery prices falling (although maybe not fully competitive), growth slowly picks up as the average consumers are slower to accept a major change to a BEV. Under this significantly curtailed growth scenario, BEV sales only achieve 7.5% of global vehicle sales in the model period. This scenario reflects a situation with battery costs failing to fall below ICE costs or development of alternative technologies that substitute away from BEVs (e.g., fuel cells).

16.2Lithium Supply

Lithium supply is currently sourced from two types of lithium deposit: hard rock (spodumene, lepidolite, and petalite minerals) and concentrated saline brines hosted within evaporite basins (largely salt flats in Chile, Argentina, and Bolivia termed salars). Exploration and technical studies are currently ongoing on three additional types of deposits: hectorite clay deposits, a unique hard rock deposit with a lithium-boron mineral named Jadarite, and other deep brines (e.g., geothermal and oil field). Although extensive study has been completed on these alternate lithium sources, they have not yet been commercially developed.

Currently (i.e., 2020 production), approximately 47% of lithium produced comes from brines and 53% from hard rock deposits. Hard rock deposits have traditionally produced mineral concentrate (e.g., spodumene or petalite) with a wide variety of technical specifications that are used in a wide variety of industrial activities, often being converted to lithium carbonate or hydroxide as intermediate products through hydrometallurgical processes. Brines have traditionally produced a lithium carbonate product (of varying qualities) which may then be converted to a variety of lithium products for various commercial activities. Brines have traditionally been the lowest-cost producers of lithium

2 Note that SRK acknowledges a potential scenario where an alternative power source is found for individual and commercial transportation that does not use lithium (e.g., fuel cells or alternative battery technologies). Under this scenario, growth would be certainly be lower, although there is the potential that more traditional uses of lithium return to the market to pick up some of the lost future demand.


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carbonate, and its derivative products with hard rock deposits act as primary mineral supply or swing production for lithium carbonate and derivatives.

Until recently, global lithium production was dominated by two deposits: Greenbushes in Australia (hard rock) and the Salar de Atacama in Chile (brine), which has two commercial operations on it. SRK estimates that close to 75% of global production was sourced from those two deposits. With lithium prices significantly increasing from 2015 to 2018, two closed mines (Quebec Lithium and Mt. Cattlin) were restarted (although Quebec Lithium recently closed again), one closed mine is in the process of restarting (Jiajika), five mines that produced other commodities either added lithium or restarted as lithium mines (Mibra, Wodgina, Bald Hill, Lanke, and Jintai, although Wodgina and Bald Hill have subsequently closed again), and five new mines have come online (Salar de Olaroz, Mt. Marion, Pilgangoora – Pilbara, Pilgangoora – Altura, and Yiliping). At the same time, the existing operations, including Greenbushes and Atacama, have expanded, but nonetheless, this major increase in supply has reduced the dominance of Greenbushes and Salar de Atacama, which, when combined, SRK estimates will produce approximately 50% of global lithium in 2020.

Looking forward, as discussed above, SRK forecasts that demand will grow significantly. However, supply is also rapidly increasing. Based on SRK’s knowledge of global lithium projects in development, it forecasts that it is possible for lithium supply to more than double from 2019’s production level of about 385,000 t (as lithium carbonate equivalent or LCE) to more than 780,000 t (as LCE) by 2024. This potential growth in supply is limited to projects that are near production (i.e., projects that are either producing, under construction, or at an advanced stage of development, such as operating demonstration plants and at the point of financing construction). Note that while all of these projects are well advanced, with most already being financed and construction underway, if lithium prices stay at current levels, projects in the financing phase may not receive development capital (although SRK has already eliminated those projects it believes will be the most difficult to finance), and some of the higher cost producers may not expand as predicted. Nonetheless, given the demand outlook discussed above, SRK believes it is likely these projects will be incentivized to reach these production levels. Some of this production increase is likely to happen even at current prices (e.g., Salar de Atacama expansions), although other increases will likely only occur if prices increase from current levels. In short, SRK has already discounted ramp-up timing and performance for expected delays and inability to meet targets and has tied project production rates to expected demand growth.

Beyond 2024, the supply pipeline still has remaining development capacity as well. The 2024 forecast of 780,000 t LCE assumes several of the advanced projects are either not producing or not producing at full capacity. In addition, there are further moderate to high quality brine projects that are not included given their long timelines to development. Finally, existing large producers have announced further expansions that are currently on hold and not included.

From a project quality perspective, most of these new developments are likely relatively high-cost producers for lithium carbonate or hydroxide (other than the expansions of existing low-cost producers and a few of the brine projects). This is because most of these projects have been known for many years and have not been developed as they are higher cost, more difficult projects than the existing producers.


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16.3Pricing Forecast

As discussed above, while lithium demand has been increasing (driven by recent historically elevated prices and leading the BEV demand boom), the lithium market is currently in an oversupply situation. In fact, SRK believes this market surplus has been in place since at least 2016. With significant additional production coming online from 2020 through 2025 (projects currently under construction or under financing), demand will have to accelerate its rate of growth to keep up with potential supply.

The historical commodity pricing for lithium carbonate and lithium hydroxide is provided in Figure 16-2. The 6% spodumene concentrate pricing is summarized in Figure 16-3.

Source: S&P Global Market Intelligence, 2022

Figure 16-2: Historic Lithium Prices (Lithium Carbonate/Hydroxide)


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Source: Asian Metal, 2022

Figure 16-3: Historic Spodumene Prices

Figure 16‑4 presents a comparison of SRK’s three demand scenarios against its base-case supply growth forecast

Source: SRK, 2020

Figure 16-4: Supply/Demand Scenarios (2016 to 2023)


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additional projects not in this outlook are clearly needed to meet demand forecasts. Therefore, SRK forecasts a price of US$10,000/t for technical grade lithium carbonate (CIF terms) as its long-term price. This price should be adequate to incentivize all projects included in Figure 16-2 plus additional projects required to close the projected supply gap show in 2023, 2024 and 2025 (many of the earlier stage projects are third to fourth quartile and therefore should be profitable at this pricing level). Due to typical price volatility, SRK expects in the short-term prices may spike well above or fall well below this level, but from an average pricing perspective, in SRK’s opinion, this forecast is reasonable.

As applicable to Greenbushes, SRK developed an associated forecast for chemical grade spodumene (6% lithia content, CIF terms). To generate this associated forecast, SRK collected price data from January 2018 through September 2020 for both technical-grade lithium carbonate, from S&P Global (minimum 99%, CIF Asia), and chemical grade spodumene, from Asian Metal (6% lithia grade, CIF China). SRK plotted the data for matching dates on an x-y scatter chart, as shown in Figure 16-3. Based on the relationship between these spot prices, SRK applied a best fit trendline to derive a linear formula representing the relationship between the spodumene price and the technical-grade lithium carbonate price, as shown on the figure. With an R2 value of 0.89, in SRK’s opinion, this correlation is robust and a reasonable method to derive the chemical grade spodumene price from the technical grade lithium carbonate price. Based on the formula presented in the figure, a US$10,000/t price for technical grade lithium carbonate results in a chemical grade spodumene (6% lithia) price of US$650/t (again, CIF payment terms). SRK therefore has utilized a spodumene price of US$650/t (6%, CIF) for its long-term price forecast utilized in the reserve estimate.

Source: SRK analysis, pricing data from Asian Metal (spodumene) and S&P Global Market Intelligence (technical grade lithium carbonate)

Figure 16-6: Technical-Grade Lithium Carbonate/Spodumene Price Relationship (2018 to 2020)

In SRK’s opinion, this spodumene price is a reasonable representation of potential long-term pricing for the base case supply and demand scenarios outlined above. Given the considerable uncertainty in both timing and magnitude of potential changes to supply and demand, this long-term forecast


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also has considerable uncertainty and even if supply and demand play out as assumed, SRK expects considerable short-term volatility that will result in prices significantly above or below the long-term forecast price.

16.3.1Product Sales

Greenbushes is an operating lithium mine. The mine produces a chemical grade spodumene concentrate and a range of technical grade spodumene concentrates. The specifications for the primary product, chemical grade spodumene, which is the focus of this market study, are provided in Table 16-1.

Table 16-1: Chemical Grade Spodumene Specifications


Chemical	Specification
Li2O	min.	6.0%
Fe2O3	max.	1.0%
Moisture	max.	8%

Source: Talison Shareholders Agreement, 2014

Historic production quantities for chemical grade spodumene concentrate are presented in Table 16-2. In addition, historic consolidated technical grade spodumene concentrate sales are presented for reference.

Table 16-2: Historic Greenbushes Production (Tonnes Annual Production, 100% Basis)


	2015	2016	2017	2018	2019	2020
Chemical Grade Spodumene	351,243	357,018	498,341	565,205	618,896	491,025
Technical Grade Spodumene	86,714	136,795	148,129	158,838	145,676	88,948

Technical grade concentrate tonnage includes SC7.2 (Standard and Premium), SC6.8, SC6.5 and SC5.0 products

Source: Talison Physicals Reporting, 2015-2019

Looking forward, Albemarle has recently significantly expanded its processing capacity with the CGP2 plant coming on-line in 2019. Total forecast production capacity for chemical grade lithium production from the combined CGP1 and CGP2 processing facilities is approximately 1.15 Mt/y (100% basis).

As a chemical grade spodumene concentrate, the primary customer for the product is lithium conversion facilities that convert the spodumene concentrate into various chemical products, including battery grade lithium carbonate and hydroxide that can be utilized as feed stock for electric vehicle batteries (the forecast primary growth market for lithium products). Chemical grade spodumene concentrate is currently fully consumed by the joint venture owners of the operation (i.e., Albemarle and Tianqi/IGO JV) for their downstream conversion facilities. Including the recently expanded production capacity for Greenbushes, Albemarle expects to continue to fully consume its allocated proportion of chemical grade concentrate production from the operation internally.


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16.4Contracts and Status

As outlined above, the lithium chemical grade spodumene concentrate produced by Greenbushes is consumed internally by the current joint venture owners of the operation (Albemarle and Tianqi/IGO JV). The purchase of this concentrate from the Greenbushes operating entity (Talison) is governed by the 2014 joint venture agreement between the two owners. This joint venture agreement establishes that while Albemarle is an owner, it is entitled to take an election of up to 50% of the annual production from Greenbushes, with that election made on an annual basis. The sales price of chemical grade concentrate to Albemarle or Tianqi/IGO JV is based on the market price, as would any third party concentrate sales.


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17Environmental Studies, Permitting, and Plans, Negotiations, or Agreements with Local Individuals or Groups

The following sections discuss reasonably available information on environmental, permitting and social or community factors related to the Project. Where appropriate, recommendations for additional investigation(s), or expansion of existing baseline data collection programs, are provided.

On August 19 and 20, 2020, SRK conducted an inspection of the Greenbushes mine site. This inspection was to confirm the conditions on the mine site and any potentially material information that could affect the mine development. The Project has been in operation as a hard rock mine since 1983 and is fully permitted for its current operations. The Project is in the process of obtaining further approvals for expansion, however consideration of the expansion has been excluded from this evaluation as detailed assessment information is not yet available. This review is compiled from information provided by Talison Lithium Australia Pty Ltd (Talison) and publicly available documents.

Talison holds the mining rights to lithium at the Project, and Global Advanced Metals (GAM) holds the rights to non-lithium minerals. GAM processes tantalum and tin extracted by Talison during mining activities within the Project area under their own Part V Environmental Protection Act 1986 Operating License. GAM is responsible for compliance with their Part V Operating License; however, Talison provides assistance to GAM in the form of environmental monitoring and reporting under a shared services agreement. As GAM operates within Talison-owned mining tenements and Mine Development Envelope (MDE), GAM’s compliance with environmental conditions associated with these approvals is the responsibility of Talison.

17.1Environmental Study Results

The Project is in the southwest of WA in the Shire of Bridgetown-Greenbushes. The town of Greenbushes is located on the northern boundary of the mine. The majority of the Project is within the Greenbushes Class A State Forest (State Forest 20) which covers 6,088 hectares (ha) and is managed by the Department of Biodiversity, Conservation and Attractions (DBCA) as public reserve land under the Conservation and Land Management Act 1984 (CALM Act). The DBCA manages State Forest 20 in accordance with the Forest Management Plan 2014-2023, that aims to maintain the overall area of native forest and plantation available for forest produce, including biodiversity and ecological integrity. The remaining land in the Project area is privately owned.

The Greenbushes region has been mined for tin, tantalum and lithium since the 1880’s, initially by alluvial mining via shafts and sluices and later by dredging of deep alluvium. A smelter and associated crushing and dressing plant was constructed in 1900 and operated for four years, and several treatment plants also commenced operations at the same time (IT Environmental, 1999). Soft rock mining of the weathered pegmatite occurred in the 1970’s and was processed at multiple wet and dry treatment plants before being consolidated at a single Integrated Plant site. Hard rock mining commenced in 1983 and a tin smelter, chemical plant and Tailings Retreatment Plant were commissioned at the same time. Over this time, environmental studies and impact assessments have been completed to support project approval applications and these are summarized below.


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17.1.1Flora and Vegetation

The Project is located in the Jarrah Forrest Bioregions under the Interim Biogeographic Regionalization of Australia classification system (Australian Government, 2012). Several flora and vegetation studies have been reported in support of project approvals with the most recent detailed flora and vegetation surveys conducted in spring and autumn 2018 across areas proposed for the mine expansion and access corridors (Onshore Environmental, 2018a; Onshore Environmental, 2018b). A total of nine vegetation types have been mapped in the mining development envelope that consists of two types of Eucalyptus Forest, two types of Corymbia Forest, Eucalyptus Woodland, Podocarpus Heath A, Hypocalymma Low Heath C, Melaleuca Forest and Pteridium Dense Heath A, with Allocasuarina Forest and Heath reported for the infrastructure corridors for access and pipelines.

No Threatened Ecological Communities, Priority Ecological Communities or threatened flora listed under the federal Environmental Protection and Biodiversity Conservation Act 1999 (EPBC Act) or the Western Australian Biodiversity Conservation Act 2016 (BC Act) have been reported in the vicinity of the mine site. The nearest population of threatened vegetation within the Mining Leases identified by Onshore Environmental (2012) are Caladenia harringtoniae in M01/3 approximately 560 m west of the southwest in a declared Environmentally Sensitive Area (ESA). One priority flora species (Priority 4 – rare and near-threatened), Acacia semitrullata, was recorded by Onshore Environmental in 2018 adjacent to the state forest.

The vegetation condition is predominantly rated as good or very good according to the classification developed by Keighery (1994), with degraded areas typically those that have been logged in the past, areas of historical mine rehabilitation such as gravel pits, and pasture (Onshore Environmental, 2018a). A total of 886 introduced flora species have been reported including three which are Declared Plants under the Biosecurity and Agriculture Management Act 2007, Bridal Creeper (Asparagus asparagoides), Blackberry (Rubus anglocandicans) and Sorrel (Rumex acetosella). The Project is located in an area at risk of Dieback (Phytophthora cinnamomi) that results in widespread vegetation death. Areas of infestation are known within the mine development envelope and require ongoing management.

17.1.2Terrestrial and Aquatic Fauna

Terrestrial Fauna

A number of fauna studies have been conducted in support of project approvals, were recently in 2011 and 2018 (Biologic, 2011; Biologic, 2018a; Harewood, 2018). There have been seven conservation significant fauna species recorded in the mine development envelope. Recorded species listed under the EPBC Act includes the vulnerable Chuditch (Dasyurus geoffroii), the critically endangered Western Ringtail Possum (Pseudocheirus occidentalis), the endangered Baudin’s Cockatoo (Calyptorhynchus baudinii) and Carnaby’s Cockatoo (Calyptorhynchus latirostris) and the vulnerable Forest Red-tailed Black Cockatoo (Calyptorhynchus banksia naso). Species listed under the state’s BC Act includes two priority four species, Southern Brown Bandicoot (Isoodon fusciventer) and the Western Brush Wallaby (Notamacropus irma) and one conservation dependent species, the Wambenger Brush-tailed Phascogale (Phascogale tapoatafa wambenger). Additional species that may be present based on desktop assessments but have not been recorded include three mammals, seven birds and one reptile.


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The presence of the Black Cockatoos resulted in the determination of the waste rock dump expansion in 2016 to be a ‘controlled action’ under the EPBC Act and was conditionally approved with a requirement for biodiversity offsets and the protection of the habitat of black cockatoos (2013/6904).

Six introduced mammals have been recorded in the mine development envelope, pig (Sus scrofa), cat (Felis catus), rabbit (Oryctolagus cuniculus), fox (Vulpes vulpes), house mouse (Mus musculus) and the black rat (Rattus rattus).

Short Range Endemic (SRE) Species

An SRE study conducted by Biologic (2018a; 2018b) was not able to conclude the regional significance of the 20 specimens collected due to limited available information regarding the taxonomy of species. However, the Jarrah/Marri forest and Jarrah/Marri forest over Banksia which is suitable habitat for SRE species is well represented outside the mine development envelope and SRE species are likely to exist in the surrounding areas as well.

17.1.3Surface and Groundwater

The region has a Mediterranean climate, with warm dry summers and cool wet winters with average annual rainfall of 820 mm, mainly falling between April and September (Talison, 2019a). The active mining area lies along a topographic ridge which hosts the mineralized pegmatite zone. The majority of the Project is located in the in the Middle Blackwood Surface Water Area. Surface watercourses within the mining leases are all tributaries of the Blackwood River which has the largest catchment in southwest WA, approximately 22,000 square kilometers (km2) (Centre of Excellence in Natural Resource Management, 2005). The entire river is registered as a significant Aboriginal site (Site ID 20434) that must be protected under the Aboriginal Heritage Act 1972.

The topographic ridge diverts surface water to either west into the Norilup Brook sub-catchment or east into the Hester Brook sub-catchment. The Project relies on surface water to supply mining activities, therefore, management of surface water between storage areas is important. The western catchment contains the mine infrastructure, processing plants and TSFs. Surface water in the western catchment is stored in several dams that are part of the mine water circuit and that are impacted by mine waters, the Clean Water Dam, Austin’s Dam, Southampton Dam and Cowen Brook Dam. The Tin Shed Dam is the responsibility of GAM under their operating license. Schwenke's Dam and Norilup Dam are outside of the mining development envelope but can potentially receive water from the mine water circuit as a result of overflows from the Southampton Dam or Cowen Brook Dam respectively. Water discharges from Cowen Brook Dam or Southampton Dam are not permitted. The current Water Management Plan (Talison 2020a) describes the Norilup Brook watercourse as fresh (500 to 1,500 microSiemens per centimeter [μS/cm]). The eastern catchment contains Floyds WRL which impacts the surface water. Discharges are permitted from Floyds Gully (below Floyds WRL) to Salt Water Gully which flows to the Hester Brook and onto the Blackwood River. The Hester Brook watercourse has elevated salinity (1,000 to 5,000 μS/cm).

Groundwater is not a resource in the local area due to the low permeability of the Archaean basement rock, as evidenced by low rate of groundwater ingress (approximately 5 L/s) into the existing Cornwall pit and underground workings (GHD, 2019a). In general, the mine site is underlain by a lateritic weathered basement of clays 15 to 40 m thick that has relatively low permeability (total hydraulic conductivity average 0.05 meters per day [m/d], range from 0.001 to 0.1 m/d) that is


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interpreted to limit the downward migration of water. Higher permeabilities are inferred to occur where the laterite is vuggy and have been identified from drilling data at the relatively sharp transition between the clays and the oxidized basement rocks (total hydraulic conductivity average 0.3 m/d, range from 0.05 to 1.3 m/d) (GHD, 2019a).

Earlier studies indicated that the pits would overflow to the south approximately 300 years after mine closure (Talison, 2016). Recent pit lake predictive modelling suggests that water levels will stabilize in approximately 500 to 900 years (based on the mine expansion) and that water levels will remain 20 m below the pit limits and will, therefore, not overflow after closure (GHD, 2020).

Paleochannels predominantly of sand between 2 m to 30 m are thick incised into the basement rock traverse the mine development envelope and were dredged as part of historically alluvial mining activities. Low-lying wetlands and surface water within the Project area, including the Austin’s and Southampton Dams, are coincident with the paleochannels and indicates a high degree of hydraulic connectivity between surface water and the alluvial material (GHD, 2019a). The channels also occur beneath the TSFs which are unlined and connectivity between the channels and seepage derived from the TSFs was reported by GHD in 2014 (GHD, 2019b).

Groundwater quality is variable across the site based on groundwater quality monitoring and is inferred to be locally influenced by groundwater recharge from surface water, mineralization (resulting in elevated magnesium, carbonate and low pH) or by possible influence of seepage derived from historic mine/dredge workings (GHD, 2019a). Background groundwater quality has been noted as difficult to determine due to a lack of monitoring wells upgradient from the mine, and as monitoring wells are located close to the TSFs and/or in the historically dredged channels (GHD, 2014). Some monitoring wells have been impacted by seepage; however, only one well was determined to be impacted by seepage in 2019, which is a shallow well south of TSF2 (GDH, 2019c).

Downstream surface or groundwater users consist of private rural holdings and State Forest that typically use water for stock, pasture and garden irrigation. Surveys of users with direct access to Norilup Brook and Waljenup Creek confirmed that water is not relied upon as a resource, and the higher salinity of Hester Brook indicates potential for seasonal stock use only (Talison, 2020a). Groundwater may also discharge as baseflow to watercourses in the area and, therefore, supports the ecological values of the Blackwood River (GHD 2019a).

17.1.4Material Characterization

Several materials characterization studies of waste rock and tailings have been completed since 2000 and includes analysis of the Floyds Dump drainage water quality between October 1997 and May 2013 (GCA, 2014), tailings seepage water quality between 1997 and 2014 (GHD, 2014), and analysis of the potential for acid rock drainage and metal leaching (ARD/ML).

Waste Rock

Studies between 2000 and 2019 indicate:

•Waste rock is not typically acid generating, with average concentrations of 0.1% sulfur of waste rock and 0.006% sulfur for the pegmatite ore (GHD, 2019d). Sulfide-minerals (e.g., pyrrhotite) in the pit waste-zone are sporadic in distribution and invariably occur as trace components (GCA 2014).


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•Waste rock that is potentially acid generating (PAG) are the granofels (metasediments) typically located in the footwall of the orebody. The amphibolite and dolerites also contain occasional stringers and pods of sulfides such as pyrite, pyrrhotite and arsenopyrite.

•Significant acid neutralizing capacity (ANC) has been shown to exist in waste rock and pit walls, predominantly in the amphibolite where frequent calcite veins occur (Baker 2014) and, therefore, leaching and mobilization of metals under acidic conditions is considered low risk (GCA, 2014; GHD, 2019d).

•Leachate analysis in 2019 concluded that there is a moderate risk that leaching of metals such as arsenic, antimony and lithium from waste rock, and may be a concern where there is hydraulic connection to groundwater and surface water systems (GHD, 2019d).

•The occurrences of high sulfur lithotypes are estimated to constitute less than 1% of the total volume of waste rock for the current mine plan (GCA, 2014). The mine expansion predicts that 17% of the mined waste rock will be PAG granofels (GHD, 2019d).

•Sulfide oxidation is occurring from Floyds Dump as indicated by the elevated sulfate levels in the drainage water, which correlates seasonally with electrical-conductivity (EC) values within the range 2,500 to 3,500 μS/cm (GCA, 2014). Leach tests on 21 samples in 2019 suggest that elevated sulfate concentrations are due to the presence of granofels (GHD, 2019d).

•A close correlation of leachate-Li and leachate-SO4 concentrations for a granofels sample tested in 2002 suggests a dependence of Li solubility on sulfide-oxidation (GCA, 2014).

Further studies into the geochemistry of the waste rock are currently underway and should help clarify some of the uncertainties ahead of the proposed mine expansion application planned to be submitted to DMIRS in Q4 2020.

Tailings

The mine produces two grades of lithium oxide for the processing plant: technical grade (greater than 3.8% lithium oxide), and chemical grade (greater than 0.7% lithium oxide). The process water pH is raised to 8 s.u. with the addition of sodium carbonate (Na2CO3) prior to deposition in the tailings dams as slurry and ionic ratios provide an indicator to identify seepage. Tailings characterization studies indicate:

•Tailings and ore have a low sulfur content (less than 0.015%) and are without inherent mineralogy that can provide carbonate buffering capacity (GHD, 2016).

•Analysis of tailings assay results (1932 samples) identified that arsenic, cesium, lithium, rubidium, and tungsten were relatively enriched, with tungsten likely to be derived from the tungsten carbide balls in the mill (GHD, 2016).

•An assessment of long-term tailings water quality as measured from decants and ponds were summarized between 2011 and 2014 and indicated that the water is slightly basic, with a dissolved salt content of between 800 and 11200 mg/L and elevated metals such as arsenic, lithium, boron, nickel and zinc (GHD, 2016).

•Specific leaching studies have not been carried out on the tailings and ARD is considered unlikely considering the low sulfur content; however, leaching studies of the ore indicate a moderate risk for leaching of arsenic, antimony, lithium and rubidium under neutral pH conditions (GHD, 2019d).


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Soils

Soils have been characterized to consist of lateritic crests and upper hill (1a) slopes of sandy topsoil and gravelly sandy loam that are underlain by caprock at about 550 mm depth, lateritic mid and lower slopes (1b) sandy topsoil over gravelly sandy loam subsoil up to 1,100 mm depth, and sandy lower slopes and flats (2a) grey sand up to a minimum depth of 800 mm over laterite caprock (Talison, 2019a).

Radionuclides

Studies into the potential for radionuclides have consistently returned results that are below trigger values. This includes waste rock and ore samples (GHD, 2019d), radon flux assessments across the mine site (IT Environmental, 1999) and ongoing water monitoring for Radium-226 (Ra-226), and Radium-228 (Ra-228) within 20 monitoring wells, as required for the License.

17.1.5Air Quality and Greenhouse Gas Assessment

The town of Greenbushes is located on the northern boundary of the mine development envelope, has a population of about 400 people, and includes a primary school approximately 100 m north of the Cornwall pit (currently in care and maintenance) and several rural residences are nearby. The local existing air quality is primarily influenced by mining and to a lesser extent surrounding agricultural activities, vehicle movements, burning (including residential wood burners, bush fires) and mechanical land disturbance (Talison, 2019). Air quality is regulated under the operating License (L4247/1991/13) and monitored by continuous high-volume air sampler with a particle matter (PM10) limit of 90 µg/L at a single location at the boundary between the mine and the town. Dust monitoring results between 2010 and 2019 show that the rare exceedances of the National Environment Protection (Ambient Air Quality) Measure (NEPM) limit (50 µg/L averaged over a 24-hour period) were attributed to bushfires and earthworks for water services near the sampler (DWER, 2020). The surface of the tailings is prone to dust generation, and dust is currently managed by a crop of rye grass on TSF1 which is not in use. In 2020, the method of tailings deposition was changed from a single discharge point to multiple spigots around the circumference to help minimize fugitive dust generation. Additional air quality samplers are planned for the monitoring network for the mine expansion and will determine the effectiveness of the new tailings deposition plan, and reduce uncertainties regarding potential exceedances of soluble barium, an issue identified by the Department of Health (DOH), suggesting that more stringent dust management measures may be required to manage dust emissions.

Reporting of greenhouse gas emissions is required annually under the National Greenhouse and Energy Reporting Act 2007 and emissions reports prepared by show an increase from 60,506 t CO2-e (Scope 1 and 2) in 2017 to 79,030 t CO2-e (Scope 1 and 2) in 2019 (Greenbase Environmental Accountants, 2018; Greenbase Environmental Accountants, 2019). These figures are reported publicly, as they exceed the corporate threshold of 50,000 t CO2-e, and as the project also consumes more than 200TJ energy per year. The current (and predicted emissions for project expansion) Scope 1 direct emissions do not exceed 100,000 t CO2-e, which is the trigger for assessment under EPA guidelines (EPA, 2020).


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17.1.6Noise, Vibration and Visual Amenity

Due to the proximity of the Greenbushes town to the mine, a safety berm/sound wall has been constructed. The mine is unable to meet the noise limits specified by the Environmental Protection (Noise) Regulations 1997 (Noise Regulations) and has been granted approval to exceed the limits through the Environmental Protection (Talison Lithium Australia Greenbushes Operation Noise Emissions) Approval 2015 (a Regulation 17 exemption). GAM also operates under an identical approval, and the combined noise emissions cannot exceed the specified limits (Talison, 2019a). There have been no reported noise exceedances in 2018 and 2019 (Herring Storer Acoustics, 2018; Talison, 2019b), one-blasting overpressure non-compliance was reported, and four noise and blasting complaints were received in the 2018 to 2019 Annual Environmental Report period. It was noted in the vibration assessment for the mine expansion that the current monitoring network is prone to false triggers due to the receiver locations. It is recommended that this is reviewed.

The mine and associated light spill are obscured from the town by the safety/ sound barrier; however, several rural residences located east of the mine and some sections of the South Western Highway can see Floyds Dump, a significant feature located between the open pits and the highway. Talison undertakes progressive rehabilitation of the Floyds Dump embankment with only active dumping areas exposed, and currently the mine is screened by the surrounding State Forest and undulating topography (Onshore Environmental 2018c).

17.1.7Cultural Heritage

The Blackwood River (ID 20434) is the only registered Aboriginal heritage site of significance in the location of the mine and is a site of mythological significance as the home created by the Waugal and also a customary path from inland to the coast (Brad Goode & Associates, 2018). Cultural, archaeological, and ethnographic surveys that involved representatives of the Gnaala Karla Booja, South West Boojarah and Wagyl Kaip Native Title Groups, and ethnographic consultation with the nominated Noongar representatives, were conducted in 2015, 2016 and 2018. No sites or artifacts of significance, as defined under section 5 of the Aboriginal Heritage Act 1972, were identified (Brad Goode & Associates, 2018).

There are no other cultural sites listed within the mining development envelope, and the nearest heritage sites listed on the inHerit database of Western Australia are the Golden Valley Site 7.25 km north east, and the Southampton Homestead approximately 6.5 km west of the mine. Local municipal listed cultural sites include several sites and buildings in Greenbushes town and the South Cornwall Pit (place number 6,639, Category 2) due to the continuous history of mining activity since 1903.

17.2Environmental Management and Monitoring

The Project operates under approvals that contain conditions for environmental management that include waste and tailings disposal, site monitoring, and water management. Primary approvals are authorized under the federal Environment Protection and Biodiversity and Conservation Act 1999 (Cwlth) (EPBC Act), the Environmental Protection Act 1986 (EP Act) including the environmental impact assessment approval for the proposed mine expansion (Ministerial Statement 1111), the operation of a prescribed premises (License L4247/1991/13), approval for the construction and commissioning of a prescribed premises for the proposed mine expansion (W6283/2019/1), and


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under the Mining Act 1978 under an approved Mine Closure Plan (Reg ID 60857) and several Mining Proposals (section 17.3).

17.2.1Environmental Management

The Project has operated using an Environmental Management System (EMS) that has been accredited under ISO 14001 since 2001 (Sons of Gwalia Ltd., 2004). The Project has a Quality Management System accredited under ISO 9001. The EMS was last accredited in February 2020 with no significant issues (Bureau Veritas 2020) and key environmental management plans (EMP) must also be reviewed and approved by the regulatory bodies (under approval conditions):

•Conservation Significant Terrestrial Fauna Management Plan (Ministerial Statement 1111),

•Visual Impact Management and Rehabilitation Plan to minimize visual impacts including light spill (Ministerial Statement 1111),

•Disease Hygiene Management Plan to minimize impacts to flora and vegetation, including from marri canker and dieback (Ministerial Statement 1111),

•Water Management Plan (License L4247/1991/13),

•Noise Management Plan (Environmental Protection (Talison Lithium Australia Greenbushes Operation Noise Emissions) Approval 2015), and

•Dust Management Plan reviewed by the Department of Water and Environmental Regulation (DWER).

It was noted in the EPA’s environmental impact assessment report for the proposed expansion (2019) that the mine “has been operating since 1983 with no significant impacts to the environment having occurred as a result of activities at the Mine during this time.”

Additional management plans include:

•Waste Minimization and Management Plan

•Hydrocarbon Management (Storage, Disposal and Maintenance and Cleanup Plans)

•Emergency Management Plan (and location specific Emergency Repossess Plans)

17.2.2Tailings and Waste Disposal

Tailings Disposal

Tailings are disposed of as a slurry from the processing plant into the active TSF2 under the Operation Manual – Tailings Storage Facility (Talison, 2020). TSF1 commenced operations around 1970 (GHD, 2014) and was originally used for tin mining operations prior to the 1990’s, and later for hard rock mining tailings deposition until 2006 (Talison, 2011). TSF1 is currently covered with rye grass to minimize dust. TSF3 is currently partially rehabilitated and was originally used for tantalum tailings. All the TSFs are unlined.

•The tailings dams have been classified in accordance with ANCOLD guidelines (2012) as Significant for TSF1, High C for TSF 2 and Low for TSF2, and that Hazard Rating for all three TSFs are Category 1 in accordance with the Code of Practice for Tailings Storage Facilities in Western Australia (DMP, 2013).

•The emergency actions and response plans for the TSFs are defined using Trigger Actions Response Plans for actions to be taken at different escalation levels for flooding, seepage, embankment instability or damage and earthquake scenarios.


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•Seepage was identified in the shallow aquifer (paleochannels) in six bores; however, the deep aquifer was not impacted (GHD, 2014). Recent monitoring data only confirm one well.

•Seepage from the western embankment of TSF2 has been reported in the AERs since 2015. Significant works have been undertaken since 2017 to install buried pipe collector drains that transport the seepage to the mine water circuit. The requirement for ongoing active seepage management is due to the location of the TSF over the shallow sand aquifer/paleochannels.

•The tailings deposition strategy was updated in the winter of 2020 to include multiple spigots around the circumference of TSF2 to minimize dust generation during the summer months.

•Tailings deposited in TSF3 have been classified as predominantly NAF, with small quantities of PAG material generated as a result of sulfide flotation concentrate. Management of the small quantities of PAG material was by co-disposal with the NAF material (GCA, 1994).

•TSF3 has already been closed and partially rehabilitated. On closure, the TSFs will be capped, landscaped, and rehabilitated. The final design is not yet determined.

It is recommended that the closure designs or the TSFs are undertaken as soon as possible. It is possible that this will be addressed in the upcoming revision of the Mine Closure Plan (due to be completed in Q4 2020).

Waste Rock Disposal

Potentially hazardous waste rock has been managed on the site since 2003, whereby waste rock with a sulfide content greater than 0.25% is segregated for special treatment, and in 2014 it was estimated that approximately 1% of samples of waste met this criterion (Baker, 2014). The site currently manages waste rock under the Waste Rock Management Plan (OPM-MP-11000, issued 2020) and Environmentally Hazardous Waste Rock Management (GEO-PR-2024, issued 2018). Waste rock with a sulfide content greater than 0.25% or arsenic content greater than 1.000 ppm is segregated with high sulfide material encapsulated in an unlined cell in the center of Floyds Dump, and material containing high arsenic is sent to the TSF. Historically, high arsenic material was sent to the Integrated Plant (IP) Waste Rock Dump which is no longer active (IT Environmental, 1999). The embankments of Floyds Dump are regraded to 18o batters and covered with topsoil or weathered growth media for rehabilitation.

17.2.3Water Management

The Project is reliant on surface water and operates under a holistic Water Management Plan (WMP) which has been revised to include the current approval conditions for the mine expansion (Talison, 2020). The mine water circuit operates as a closed system and is comprised of the four primary storage dams (Southampton Dam, Austin’s Dam, Clear Water Dam, Cowen Brook Dam), the TSF2 decant (Clear Water Pond), pits, seepage drains, collection sumps and associated pipelines and pumps. The Project is currently upgrading the water circuit with the installation of additional pipeline tracks which will permit the movement of water between all the primary water storages to manage levels during periods of high rainfall. Contaminated water and seepage are pumped to the Clear Water Dam which is the primary source of water for the adjacent processing plants. The Cornwall Pit and Vultan Pit are currently being used for water storage, but this will change with the proposed mine expansion.

Water levels and quality are monitored throughout the water circuit, as per the conditions of the license (L4247/1991/13). The primary source of arsenic in the mine water circuit was historically from


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tantalum processing activities and was contained within the Tin Shed Dam under GAM’s responsibility, with some precipitation into dam sediments (Talison, 2017). Current arsenic and lithium sources are from lithium processing and pit dewatering. Over time, the water quality of the mine water circuit has shown increasing levels of arsenic and lithium. In 2014, arsenic remediation units (ARU) were established to manage arsenic concentrations which have now stabilized below license limits, and the ARUs have recently been replaced with a larger capacity unit. Lithium concentrations are planned to be managed at a Water Treatment Plant (WTP), currently being commissioned, which will remove lithium by reverse osmosis and is located at the Clear Water Dam.

Offsite discharge of water from the Southampton Dam and the Cowan Brook Dam is explicitly prohibited in the license due to potential downstream receptors from the accumulation of lithium and metals/metalloids in the mine water circuit, and connection to seepage from TSF2 via the underlying aquifer. Prior to 2018, discharges were permitted from the Cowen Brook Dam and typically occurred during the winter months. Talison anticipates that water treatment will improve the quality of water to acceptable discharge levels in the future. Discharge is permitted from emission points specified in the license (L4247/1991/13) and Works Approval (W6283/2019/1) which are Floyds North and Floyds South (adjacent to Floyds Dump), Carters Farm and Cemetery.

17.2.4Solid Waste Management

Talison is required under license (L4247/1991/13) to dispose of solid waste in the waste rock dump by landfill (no more than 200 t) or by burial (batches of no more than 1,000 whole tires), or at a licensed third party premises. Talison was non-compliant with the landfill criteria in the 2018-2019 AER period due to increased operations and have stated that they are seeking to amend the license conditions.

17.2.5Environmental Monitoring

Specific requirements for compliance and ambient monitoring are defined in the license (L4247/1991/13) and Works Approval (W6283/2019/1). The monitoring results must be reported to the regulators (DWER and DMIRS) on an annual basis and include point source emissions to surface water including discharge and seepage locations, process water monitoring, permitted emission points for waste discharge to surface water, ambient surface water quality and ambient groundwater quality monitoring, ambient surface water flow and each spring, complete an ecological assessment of four sites upstream and six sites downstream of the Norilup Dam.

17.3Project Permitting Requirements

17.3.1Legislative Framework


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in Western Australia are principally governed by Part V of the EP Act and by the Mining Act 1978 (Mining Act) as well as several other regulatory instruments.

17.3.2Primary Approvals

The Project is currently approved under the EPBC Act and Part IV of the EP Act.

Environmental Protection and Biodiversity and Conservation Act 1999 (Cwlth)

The Project was referred to the federal Department of Environment and Heritage (now called the Department of Agriculture Water and the Environment – DAWE) under the EPBC Act in 2013 for expansion of the waste rock dump, and in 2018 for further expansion of the waste rock dump and tailings storage facilities. The works were determined to be a ‘controlled action’ due to potential impacts to listed threatened species and ecological communities and was approved with conditions for biodiversity offsets and to protect the habitat of black cockatoos (2013/6904 and 2018/8206).

Part IV, Environmental Protection Act 1986 (WA)

The principal legislative framework in Western Australia for environmental and social impact assessment is the EP Act. Approvals under Part IV of the EP Act are made by the Environmental Protection Authority (EPA), an independent statutory authority. Under the EP Act, projects that have to potential to cause significant impacts to the environment are referred to the EPA which determines if a proposal should be formally assessed. At the completion of the Part IV assessment process, the EPA provides advice to the Minister for the Environment who then issues a Ministerial Statement if the proposal is approved. The current operations have not required approval under part IV of the EP Act. The proposed mine expansion has been approved, and the Project now operates under Ministerial Statement 1111 (MS1111).

17.3.3Other Key Approvals

Part V, Environmental Protection Act 1986 (WA)

The Department of Water and Environmental Regulation (DWER) administers Part V, Division 3 of EP Act, which involves the regulation of emissions and discharges from ‘Prescribed Premises’ as defined by the Environmental Protection Regulations 1987 (Schedule 1). Mining is not a prescribed activity; however, pit dewatering, ore processing, storage of tailings, crushing and screening, and power generation are among the prescribed activities regulated by the DWER.

A license is required for the operation of Prescribed Premises. Talison holds License No. L4247/1991/13, which was granted on December 12, 2013, was last amended July 27, 2021 and is valid until December 13, 2026. The license authorizes operation of Category 5 Prescribed Premises, processing or beneficiation of metallic or non-metallic ore up to 4.7 Mt/y of processing capacity and 5 Mt/y deposited tailings. The site operates two chemical grade processing plants (CGP 1 and 2) and one TSF (TSF2). TSF3 is closed has been rehabilitated and TSF1 is not currently receiving tailings and is approved for use only for emergency deposition.

Off-site discharge of water from the Southampton Dam and the Cowan Brook Dam is explicitly prohibited in the license due to the high risk from accumulation of lithium and metals/metalloids in the mine water circuit.


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A Works Approval (W6283/2019/1) was granted on April 2, 2020 for the construction and commissioning of additional processing plants, a crusher and a tailings retreatment plant to increase the processing capacity of spodumene ore to a maximum of 11.6 Mt/y, and the Project’s current management and operating strategies include compliance with the conditions of the Works Approval.

Clearing permits are required for the disturbance of native vegetation under the EP Act. Talison holds two clearing permits, CPS 5056/2 valid until December 27, 2026 for clearing up to 120 ha for mine disturbances and CPS 5057/1 valid until December 27, 2026 for clearing up to 10 ha for rehabilitation purposes outside the mine development envelope. Offset proposals are required under these permits to address residual impacts to the Forest Red-tailed Black Cockatoo, Baudin’s Cockatoo and Carnaby’s Cockatoo.

Mining Act 1978 (WA)

The environmental impacts of mining and related activities are also assessed by the Department of Mines, Industry Regulations and Safety (DMIRS), the statutory body for the regulation of mineral exploration and associated resource development activities. Environmental and social assessment requirements are defined by the Statutory Guideline for Mining Proposals and the Statutory Guidelines for Mine Closure Plans which are enabled under section 70O of the Mining Act and the MCP must be revised a minimum of every three years. The commitments made in mining proposals for a project generally accrue rather than superseding each other, so that obligations arising from earlier approvals become binding. The applicable mining proposals and MCPs are shown in Table 17-1.

A Mining Proposal and MCP must be approved by the DMIRS before mining activities commence and must contain a description of all the relevant environmental approvals and statutory requirements that must be obtained and that will affect the environmental management of the Project. A Memorandum of Understanding (MoU) exists between the DMIRS and other regulatory agencies to minimize duplication of effort and to enable consultation in cases where expertise relating to a particular type of impact resides with another agency.


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Table 17-1: Mining Proposals and MCPs Conditioned in Mining Tenure


Registration ID	Document Title	Date	Applicable Tenure
14168	Greenbushes Notice of Intent: Greenbushes Tantalum/Lithium Project: Greenbushes, Western Australia	April 1991	M01/16
2122/92	Notice of Intent to build an additional waste dump for material form the Tantalum and Lithium Pits at the Greenbushes Minesite	13 July 1993	M01/16
15064	Proposed construction of Lithium carbonate Plant - Greenbushes Mine	21 June 1994	M01/16
16518	Greenbushes Operations - Preliminary Project Proposal - Continuation of Hard Rock Mining	March 1999	M01/16
45382	Greenbushes Operations 2013 Mining Proposal - Continuation of Hardrock Mining III	9 April 2014	M01/03, M01/16, G01/1
EARS-MP-30733	Talison Lithium Australia Pty Ltd Greenbushes Mine Site Project 640 2011 Lithium Processing Plant Upgrade Tenement G01/1	June 2011	G01/1
60857	Talison Lithium Australia Pty Ltd - Greenbushes Operations Mine Closure Plan 2016	23 February 2017	M01/1, M01/02, M01/03, M01/4, M01/5, M01/8, M01/10, M01/16, M01/18, G01/1
80328	Mining Proposal - Expansion of Mine Development Envelope, Mine Services Area, Chemical Grade Plant 3, 4, Mine Access Road and Tailings Retreatment Plant	23 July 2019	M01/03, M01/8
87604	Infrastructure and road works at the new site Explosives Magazine and Batching Facility	23 June 2020	M01/03
95694	Mine Services Area, Gate 5 and 132kV powerline corridor	30 April 2021	M01/03, M01/06, M01/09
96748	TSF2 buttressing and ground stabilization works	14 July 2021	M01/06

Source: Talison Lithium Australia Pty Ltd., 2019.

Aboriginal Heritage Act 1972 (WA)

The Aboriginal Heritage Act 1972 (AH Act) provides for the protection of all Aboriginal heritage sites in Western Australia regardless of whether they are formally registered with the administering authority, the Department of Planning, Lands and Heritage (DPLH). Overall, the surveys have not identified any heritage sites and, therefore, Section 18 consents are not required at this time.

Contaminated Sites Act 2003 (WA)

The Project has five registered contaminated sites which encompass the entire mine area due to known or suspected contamination of hydrocarbons and metals in soil, and elevated concentrations of metals in groundwater and surface water (Site IDs 34013, 73571, 73572, 75019, and 75017). The classification of the Mine as ‘Contaminated – Restricted use’ restricts land for commercial and industrial uses only. The mine cannot be developed for more sensitive uses such as recreation open space or residential use without further contamination assessment and/or remediation.

17.3.4Environmental Compliance


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DWER note in the Works Approval decision report (2020) that there have been 36 dust related complaints since the 2015/2016 reporting period; however, dust monitoring for license L4247/1991/13 from previous years (2010-2019) confirms consistent dust measurements well below the NEPM standard, with results over 50 µg/m3 observed on only very rare occasions.

The Project has contaminated five sites listed which encompass the entire mine area due to known or suspected contaminated site due to hydrocarbons and metals in soil, and elevated concentrations of metals in groundwater and surface water (Site IDs 34013, 73571, 73572, 75019, and 75017). These sites are classified as “Contaminated – Restricted use” and only permit commercial and industrial uses. This will need to be reviewed for final land use options for closure.

17.4Local Individuals and Groups

Talison has two agreements in place with local groups:

•Tonebridge Grazing Pty Ltd. – site conservation agreement for the protection and improvement of native vegetation to protect Black Cockatoo habitat.

17.5Mine Reclamation and Closure

17.5.1Closure Planning

The requirements for Mine Closure Plans (MCPs) in Western Australia are defined in the Mining Act 1978 and the Guidelines for Preparing Mine Closure Plans (Department of Mines and Petroleum & Environmental Protection Authority [DMP & EPA], 2015) which is statutory guidance under s70O of the Mining Act. Talison has a mine closure plan submitted and approved by DMIRS on 23 February 2017, with their costs updated in October 2016.

Talison states in their currently approved MCP that the closure concept for the Greenbushes site is to re-integrate the mine into the surrounding State Forest. All of the project facilities would be part of the re-integration including artificial landforms such as tailings storage, two contoured waste rock dumps and a large pit void. The pit is expected to fill with water to an elevation that would cause it to overflow at the southern end into the Hester Brooke Catchment.

Based on progressive rehabilitation that has been performed at the site, Talison believes that the rehabilitated landscape will be stable and non-polluting. However, the site is currently classified as


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Contaminated: restricted use and water from several areas does not meet current discharge criteria. Talison has stated this does not impact the proposed use to allow native fauna and general public to conduct normal activities.

Talison has developed a closure completion criterion for the return of historic areas to the state forest after rehabilitation, specifically historic shallow alluvial workings along gullies surrounded by forest. The post mining landforms associated with the active mine site have less in common with the pre-mining surrounding environment. Talison is working with the Department of Biodiversity, Conservation and Attractions (DBCA) on the development of a completion criteria for the active mine site, with the closure criteria still in early draft stage, with further negotiation needed with DBCA before final criteria can be agreed on.

The Broad Principal Closure Objectives are

•Post mining land use has been identified and is compatible with the surrounding land use

•Post mining land use is achievable and acceptable to the future landowner/manager

•The Environment is safe, non-polluting and stable and will not be the cause of any environmental or public safety liability and has an acceptable contamination risk level for the intended land use

•Potential hazardous substances are removed from site and/ or the location of buried or underground hazards is defined and adequately demarcated

•The Environment can be integrated into the post closure management practices without the input of extraordinary resources above that which could reasonably and normally be expected, unless otherwise agreed by the future landowner.

•The Environment is able to support functional landforms, soil profiles, ground and surface water systems and ecological communities for the agreed post mining land-use.

•Any built infrastructure is removed, unless otherwise agreed by the future landowner / manager and so long as the maintenance of the infrastructure is not inconsistent with all these objectives.

The approved closure plan is based on 11 domains, with Talison responsible to all facilities but two, with the responsibility falling on to Global Advanced Metals Greenbushes (GAMG) who have the rights to the non-lithium minerals and ownership of the Tantalum processing facilities.

Domains and subdomains and infrastructure are summarized in Table 17-2.


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Table 17-2: Reclamation and Closure Domains and Responsibilities


Talison Domain
Pit Domain			Floyds Waste Dump
Central pits			Waste landform
Haul Roads			Haul roads
Tantalum Ore Stockpiles			Magazine
Portal			Hardstand areas
Powerlines & transformers			Powerlines
Water Pipelines			Monitored Rehabilitation
Monitored Rehabilitation			Natural regrowth/Unmonitored rehabilitation (disturbed but not assigned
Natural regrowth/Unmonitored rehabilitation (disturbed but not assigned			Remnant vegetation
Remnant vegetation
IP Waste Dump Domain			Water Circuit Doman
IP Waste landform			Austins/Southampton Dam
Rehabilitation soil stockpiles			Cowan Brook Dam
Haul roads			Water pipelines
Mining Contractors workshop			Raw water tanks
Drill & blast workshop			Austins Wetland
Offices			Pumping stations
Bioremediation area			Powerlines & transformers
DG Storage-Mining contractors fuel farm			Monitored Rehabilitation
Lithium tailings (Historic)			Natural regrowth/Unmonitored rehabilitation (disturbed but not assigned
Hardstand areas			Remnant vegetation
TSF Domain			Vultan Domain
TSF1			Vultans Wetland
TSF2			Historic tailings
Clear water pond			Powerlines & transformers
TSF3			Monitored Rehabilitation
Tailings pipelines			Natural regrowth/Unmonitored rehabilitation (disturbed but not assigned
Powerlines			Remnant vegetation
Pumping station
Lithium Processing Domain			TSF 3 Domain
Technical Grade Lithium Production Plant			Historic tailings rehabilitated
Chemical Grade Lithium Production Plant			Historic tailings no rehabilitated
Engineering workshop			Monitored rehabilitation
Light vehicle workshop			Natural regrowth/Unmonitored rehabilitation (disturbed but not assigned
Underground cables
LMP Warehouse & Offices			Administration Domain
DG Storage - Light vehicle fuel farm			Administration offices
DG Storage - LMP gas storage			Laboratory
DG Storage - Sulphuric acid tank			Research facility
Powerlines			Hardstand areas
Transformers & substations			Access roads.
Hardstand areas

GAMG Domains
GAMG Primary Domain			GAMG Secondary Domain
Crushing facility			Wet and Dry plant
Primary tantalum plant			Roaster/Smelter
Run of Mine pad			Arsenic Remediation Facility
Fine ore stockpile			Settling pond
Hardstand areas			Tin shed dam
Water Pipelines			DG Storage - Arsenic trioxide fume storage
			Gas storage
			Pumping station
			Powerline & transformers
			Administration offices & store
			Product storage warehouse
			hygiene facility
			Access roads


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Post closure activities will comprise of a 10-year monitoring schedule for the following:

•Surface water flows

•Monthly water quality

•Ground water monitoring

•Dust monitoring

•Monthly TSF inspections and seepage checks

•Annual TSF geotechnical reviews

•Pit wall stability

•Pit void water levels

•Weed monitoring

•Flora and fauna assessments

•Monthly rehabilitation slope stability

•Feral animal monitoring

•Monthly water dam inspections

Proposed monitoring methods must be able to demonstrate trends towards the agreed site-specific completion criteria and environmental indicators for a sufficient timeframe.

17.5.2Closure Cost Estimate

Financial provision for MCPs are required to be prepared with transparent and verifiable methodology with uncertainties and assumptions clearly documented (DMP & EPA, 2015). A cost estimate for immediate (unplanned) closure of Greenbushes has been prepared by Talison using the Victorian Government Rehabilitation bond calculator (dpi-bond-calculator-24-feb-2011) as a template to assist them in identifying and costing the rehabilitation, decommissioning and monitoring requirements for the Greenbushes site. As stated within their closure plan, Talison’s initial closure costs were calculated in 2013, with these costs escalated annually using Perth, Western Australia inflation rates. The Victorian Government bond calculator uses predefined third-party unit rates based on the typical current market ‘third party rates’ as of July 2010, which may overestimate or underestimate closure costs for Western Australia. Where more accurate costing information was available, that was used in lieu of the default third party rate as prescribed in the Victorian bond calculator. A more accurate closure cost estimate should be prepared using Western Australian third-party rates or quoted estimates based on ‘first principles’.

The 2021 closure cost estimate update is AU$48,757,253, of which AU$48,757,253 represents the estimate for Talison’s portion of the operation.

The closure cost estimate for Greenbushes only addresses immediate mine closure. SRK was not provided a Life of Mine (LoM) closure cost estimate, which, although not a regulatory requirement, is industry best practice and consistent with sustainable development goals (Department of Industry, Innovation and Science, 2016). The LoM closure costs include rehabilitation, closure, decommissioning, monitoring and maintenance following closure at the end of the mine life and are typically much higher than the immediate closure due to a greater final footprint. Early recognition of mine closure costs aids financial planning, long term budgeting and mine plans and promotes improved strategies for progressive rehabilitation. It provides a more accurate representation of the total closure liability for the Greenbushes operation.


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17.5.3Performance or Reclamation Bonding

Western Australia does not require a company to post performance or reclamation bonds. However, all tenement holders in Western Australia are required to annually report surface disturbance and to make contributions to a pooled mine rehabilitation fund (MRF) based on the type and extent of disturbance under the Mining Rehabilitation Fund Act 2012 (MRF Act). Each operator supplies the areas of disturbance for each facility type and a standard rehabilitation cost is applied to each. Therefore, the cost used to estimate the annual contribution to the MRF may not reflect the actual cost to close the mine as it does not use site-specific information and is unlikely to include all of the activities that would be required to close the mine. The pooled fund can be used by the Department of Mines, Industry Regulation and Safety (DMIRS) to rehabilitate mines where the tenement holder/operator has failed to meet their rehabilitation obligations and finances have not been able to be recovered. The interest earned on the pooled fund is used for administration and to rehabilitate legacy abandoned mine sites.

However, the Mine Closure Plan Guidance - How to prepare in accordance with Part 1 of the Statutory Guidelines for Mine Closure Plans (DMIRS, March 2020) states that “DMIRS may require a fully detailed closure costing report to be submitted for review, and/ or an independent audit to be conducted on the report to certify that the company has adequate provision to finance closure. Where appropriate, the costing report should include a schedule for financial provision for closure over the life of the operation.” If requested by DMIRS, tenement holders are required to provide financial assurance for mine closure to ensure that adequate funds are available and that the government and community are not left with unacceptable liabilities. The financial assurance process and methodology must be transparent and verifiable, with assumptions and uncertainties that have to be clearly documented, and based on reasonable, site-specific information. As of the preparation of this report DMIRS has not requested that Talison provide financial assurance for the Greenbushes operation, but Talison does submit annual payments to the MRF in accordance with the MRF Act.

17.5.4Limitations on the Current Closure Plan and Cost Estimate

The latest closure cost estimate available for review was the 2021 updated estimate. It includes the facilities that currently exist on site and future expansion of Floyd’s dump.

The model used to prepare the closure cost estimate was developed in the State of Victoria. Its purpose is to provide the Victorian government with an assessment of the closure liabilities at the site and form the basis of financial assurance. However, because Western Australia does not require operators to post a financial assurance and, instead relies on a pooled fund, it is believed this cost estimate has not been reviewed by the Western Australian government. Furthermore, this model was created in 2011 and uses fixed unit rates developed by a consultant to the government. These rates have been increased for inflation since that time.

Talison used this model to prepare a cost estimate in the event that the government requires demonstration of adequate financial assurance for the site. This type of estimate typically reflects the cost that the government agency responsible for closing the site in the event that an operator fails to meet their obligation. If Talison, rather than the government, closes the site in accordance with their current mine plan and approved closure plan, the cost of closure is likely to be different from the financial assurance cost estimate approved by the government.


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There are a number of costs that are typically included in the financial assurance estimates that would only be incurred by the government, such as government contract administration. Other costs, such as head office costs, a number of human resource costs, taxes, fees and other operator-specific costs that are not included in the financial assurance cost estimate would likely be incurred by Talison during closure of the site. Because Talison does not currently have an internal closure cost estimate other than the Victorian model, SRK was not able to prepare a comparison of the two types of closure cost estimates. The actual cost could be greater or less than the financial assurance estimate.

There is no documentation on the basis of the unit rates used in the Victorian model and the government of Victoria was unable to provide any information regarding the accuracy of the rates. Because of this, SRK cannot validate any of the unit rates used in the model or the overall cost estimate.

Furthermore, because closure of the site is not expected until 2057, the closure cost estimate represents future costs based on current site conditions. In all probability, site conditions at closure will be different than currently expected and, therefore, the current estimate of closure costs is unlikely to reflect the actual closure cost that will be incurred in the future.

17.5.5Potential Material Omissions from the Closure Plan and Cost Estimate

As noted above, the closure plan and current cost estimate is based on the assumption that the mine site will be stable and non-polluting following completion of the closure measures included in the closure plan. However, there are several aspects of the project that may require additional measures to be implemented at the site to achieve this goal.

If perpetual, or even long-term, treatment of water is required to comply with discharge requirements, the closure cost estimate provided by Talison could be materially deficient.

17.6Adequacy of Plans

In general, current plans are considered sufficient to address any significant issues related to environmental compliance, permitting, and local individuals or groups. Additional studies such as waste rock characterization, noise and dust monitoring, mine closure are recommended for the proposed mine expansion.


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17.7Commitments to Ensure Local Procurement and Hiring

The Project has no formal commitments to ensure local procurement and hiring. However, the mine applies a fatigue management policy that requires staff to have a maximum workday of 13 hours that includes travel to and from home (Distance from Work ADM-ST-014, 2018). Staff operating on a 12-hour workday must live within a 30-minute drive of the mine (approximately 50 km), and those on an 8-hour workday must live within 1.5 hours of the mine site (approximately 120 km). This policy limits the radius of staff employment to the local region, with the majority of staff residing within 50 km.


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18Capital and Operating Costs

Estimation of capital and operating costs is inherently a forward-looking exercise. These estimates rely upon a range of assumptions and forecasts that are subject to change depending upon macroeconomic conditions, operating strategy and new data collected through future operations. For this report, capital and operating costs are estimated to a PFS-level with a targeted accuracy of +/- 25%. However, this accuracy level is only applicable to the base case operating scenario and forward-looking assumptions outlined in this report. Therefore, changes in these forward-looking assumptions can result in capital and operating costs that deviate more than 25% from the costs forecast herein.

18.1Capital Cost Estimates

Summary LoM capital costs are shown in Table 18-1.

Table 18-1: Life-of-Mine Capital Costs


Category	LoM Cost(AU$ million)	Distribution(%)
Expansionary Development	68.9	8%
Plant & Equipment Sustaining	151.3	17%
Sustaining Development	33.0	4%
Tailings Addition	43.7	5%
Exploration	11.2	1%
Plant & Equipment	557.3	61%
Closure	48.9	5%
Total	914.2	100%

Source: SRK, 2021

Total LoM capital expenditures are estimated at AU$914.1M. Talison classifies capital expenditures as either expansionary or sustaining. A discussion of both types of capital expenditures is presented below.

18.1.1Expansionary Capital Costs

Planned LoM capital expenditures that are characterized as expansionary are shown in Table 18-2.

Table 18-2: Life-of-Mine Expansionary Capital Costs


Category			LoM Cost (AU$ million)
Development
Water Capacity			4.2
Capacity Increase and Approved Capital			8.7
TSF 4			56.0
Plant & Equipment
132kV Power Line			15.3
Mine Services Area (MSA)			88.8
Mine Access Road			7.2
Explosives Facility			0.3
Clearing Offsets			20.0
Greenbushes Housing			0.5
TSF Pumping & Distribution			7.4
Warehouse Workshop Expansion			7.0
Lab Expansion			4.9
Total Expansionary Capital			220.3

Source: SRK, 2021


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LoM expansionary capital expenditures are estimated at AU$220.3M, with approximately AU$63M directly attributable to constructing tailings storage facilities. Other significant expenditures include relocation of a 132 kV power line and completion of a new mine services area and clearing offsets. SRK’s review of the Talison capital expenditure buildups confirmed that the estimates typically include contingency. The contingency is embedded within the line-item expenditures in Table 18-2. SRK review indicates that all contingency amounts were less than 15%.

18.1.2Sustaining Capital Costs

Planned LoM capital expenditures that are characterized as sustaining are shown in Table 18-3.

Table 18-3: Life-of-Mine Sustaining Capital Costs


Category			LoM Cost (AU$ Million)
Development
Cutback Preparation Works			2.4
TSF1			43.7
TSF2			13.8
Floyds Preparation Works			14.4
Floyds Catchment System			2.5
Exploration
Drilling			11.2
Plant & Equipment
Fleet Management System			2.2
CGP2 CAPEX Adder			75.0
LIBS Online Analyzer			2.0
CGP1 Sinks Iron Removal			5.0
TGP Thickener			6.0
Technical Team Office			2.0
Moisture Reduction Systems			1.6
Other Sustaining (LoM)			463.4
Closure			48.8
Total Sustaining Capital			694.0

Source: SRK, 2020

LoM sustaining capital expenditures are estimated at AU$694M, including estimated closure costs. The assumption is that Talison will continue to rely on a contractor for open pit mining and, accordingly, no mining equipment costs have been included in the sustaining capital cost estimate. No contingency is included in the sustaining capital shown in Table 18-3.

18.2Operating Cost Estimate

The LoM operating costs are summarized in Table 18-4. The LoM total operating costs are summarized in Table 18-3. No contingency is included in the operating cost estimates.


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Table 18-4: Life-of-Mine Total Operating Cost Estimate


Category	LoM Total Cost (AU$ million)	LoM Unit Cost (AU$/t-processed)	Distribution (%)
Mining	4,371	31.64	37%
Processing	3,522	25.49	29%
G&A	611	4.42	5%
Water Treatment	244	1.76	2%
Market Development	18	0.13	0%
Concentrate Shipping	1,149	8.32	10%
Other Transport and Shipping Costs	641	4.64	5%
Government Royalty	1,392	10.08	12%
Total	11,948	86.48	100%

Source: SRK, 2020

The LoM total operating cost is AU$86.48 per t processed. On a combined basis, mining and processing make up approximately 66% of total LoM total operating cost.

A discussion of the cost categories comprising the total operating cost estimate is presented below.

18.2.1Mine Operating

The LoM mine operating costs are summarized in Table 18-5.

Table 18-5: Mine Operating Costs


Category	LoM Total Cost (AU$ million)	LoM Unit Cost (AU$/t-mined)
Mining Overheads	605	1.01
Drill and Blast	923	1.55
Load and Haul	2,509	4.20
RoM Loader	243	0.41
Stockpile Rehandle	34	0.06
Grade Control Assays	12	0.02
Rockbreaking	46	0.08
Total	4,371	7.32

Source: SRK, 2020

The operating cost estimate is based on recent actual costs and the load and haul rates specified in the existing mining contract between Talison and SG Mining Pty Ltd (SGM), which include appropriate adjustments for rise and fall. Load and haul costs are variable depending on the pit bench from which the material is mined and whether the destination is the RoM pad, a long-term stockpile, or a waste dump.

The LoM unit operating cost is AU$7.32 per t mined from the open pit (AU$20.49 per bcm mined). On a total material movement basis (which includes tonnes of ore re-handled from long-term stockpiles), the LoM unit cost is AU$7.15 per t moved.

The mine operating cost profile over the life of the operation is shown in Figure 18-1.


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Source: SRK, 2021

Figure 18-1: Mine Operating Cost Profile

Mine operating costs remain in a relatively constant range until the final nine years of open pit mining (2045 to 2053) when the annual mining rate decreases, and the deepest benches of the open pit are mined. During the final two years of plant operation (2054 and 2055) the only mining costs are those associated with re-handling ore from long-term stockpiles.

18.2.2Processing Operating Costs

The LoM processing costs are summarized in Table 18-6.

Table 18-6: Process Operating Costs


Category	LoM Total Cost (AU$ million)	LoM Unit Cost (AU$/t-processed)
Crushing
Crushing Plant 1	392	6.40
Crushing Plant 2	453	5.56
Subtotal Crushing Plants	845	6.07
Technical Grade Plant
Variable Costs	139	39.89
Chemical Grade Plant 1
Variable Costs	965	16.73
Chemical Grade Plant 2
Variable Costs	1,573	19.28
Total All Plants	3,522	24.67

Source: SRK, 2021


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The average LoM crushing cost is AU$6.07/t crushed. The average LoM processing cost for the Technical Grade Plant is AU$39.89/t processed. For Chemical Grade Plant 1 and Chemical Grade Plant 2, the LoM average processing costs are AU$16.73/t-processed and AU$19.28/t-processed, respectively. The average LoM combined crushing and processing cost is AU$24.67/t processed. The estimate of processing costs is based on Talison’s recent actual costs. The processing costs exclude the crusher feed loader and the mobile rockbreaker.

18.2.3Other Operating Costs

Other operating costs consist of general and administrative costs (G&A), water treatment and marketing development as shown Table 18-7.

Table 18-7: Other Operating Costs


Category	LoM Total Cost (AU$ million)	LoM Unit Cost (AU$/t-processed)
G&A
Environmental	152	1.07
Health, Safety and Training	123	0.86
Administration	335	2.35
Subtotal G&A	611	4.28
Water Treatment	244	1.71
Market Development	18	0.13
Total Other Operating Costs	873	6.11

Source: SRK,2020

The other operating costs (G&A, water treatment and market development) are generally fixed over the life of the project and average approximately AU$24.6 million per year. The estimate of other operating costs is based on Talison’s recent actual costs.

18.2.4Shipping and Transportation Costs

Shipping and other transportation cost are shown Table 18-8.

Table 18-8: Shipping and Transportation Costs


Category	LoM Total Cost (AU$ million)	LoM Unit Cost (AU$/t-processed)
Shipping	1,149	8.05
Other Transportation Costs(1)	641	4.49
Total Other Operating Costs	1,790	12.54

(1)Includes freight, insurance, loading and storage.

Source: SRK, 2021

Costs for shipping and transportation are estimated based on Talison’s recent actual costs and rates from current contracts.

18.2.5Royalties

LoM royalty payments are estimated at AU$1,392M based on application of a 5% government royalty. The royalty is applicable to estimated LoM gross revenue from concentrate sales after deducting shipping costs to China.


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19Economic Analysis

19.1General Description

SRK prepared a cash flow model to evaluate Greenbushes’ ore reserves on a real basis. This model was prepared on an annual basis from the reserve effective date to the exhaustion of the reserves. This section presents the main assumptions used in the cash flow model and the resulting indicative economics. The model results are presented in U.S. dollars (US$ or US$), unless otherwise stated.

All results are presented in this section on a 49% basis reflective of Albemarle’s ownership unless otherwise noted. Technical and cost information is presented on a 100% basis to assist the reader in developing a clear view of the fundamentals of the operation.

As with the capital and operating cost forecasts, the economic analysis is inherently a forward-looking exercise. These estimates rely upon a range of assumptions and forecasts that are subject to change depending upon macroeconomic conditions, operating strategy and new data collected through future operations.

19.1.1Basic Model Parameters

Key criteria used in the analysis are presented throughout this section. Basic model parameters are summarized in Table 19-1.

Table 19-1: Basic Model Parameters


Description			Value
TEM Time Zero Start Date			July 1, 2021
Mine Life (first year is a partial year)			35
Discount Rate			8%

Source: SRK, Albemarle

All costs incurred prior to the model start date are considered sunk costs. The potential impact of these costs on the economics of the operation is not evaluated. This includes contributions to depreciation and working capital as these items are assumed to have a zero balance at model start.

The model continues one year beyond the mine life to incorporate closure costs in the cashflow analysis.

The selected discount rate is 8% as directed by Albemarle.

19.1.2External Factors

Exchange Rates

As the operation is located in Australia, the operating and capital costs are modeled in AU$ and converted to US$ within the model. The foreign exchange rate profile for the model was provided by Albemarle and is presented in Table 19-2.

Table 19-2: Modeled Exchange Rate Profile


Calendar Year		2021	2022	2023	2024	2025+
FX Rate	US$:AU$	1.34	1.32	1.29	1.32	1.39

Source: Albemarle


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Pricing

Modeled prices are based on the prices developed in the Market Study section of this report. The prices are modeled as US$650/t concentrate over the life of the operation. This price is a CIF price and shipping costs are applied separately within the model.

All concentrate streams produced by the operation are modeled as being subject to the price presented above.

Taxes and Royalties

As modeled, the operation is subject to a 30% income tax. All expended capital is subject to depreciation over a 20 year period. Depreciation occurs via a reducing balance method with a 2x multiplier. No existing depreciation pools are accounted for in the model.

As the operation is located within Western Australia, the operation is subject to a royalty of 5%. The amount of revenue subject to the royalty is the project’s gross revenue less deductions for shipping costs.

SRK notes that the project is being evaluated as a standalone entity for this exercise (without a corporate structure). As such, tax and royalty calculations presented here may differ significantly from actuals incurred by Albemarle.

Working Capital

The assumptions used for working capital in this analysis are as follows:

•Accounts Receivable (A/R): 30 day delay

•Accounts Payable (A/P): 30 day delay

•Zero opening balance for A/R and A/P

19.1.3Technical Factors

Mining Profile

The modeled mining profile was developed by SRK. The details of mining profile are presented previously in this report. No modifications were made to the profile for use in the economic model. The modeled profile is presented on a 100% basis in Figure 19-1.

Source: SRK

Figure 19-1: Greenbushes Mining Profile (Tabular data in Table 19-12)

A summary of the modeled life of mine mining profile is presented in Table 19-3.


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Table 19-3: Greenbushes Mining Summary


LOM Mining	Units	Value
Total Ore Mined	Mtonnes	138.1
Total Waste Mined	Mtonnes	458.7
Total Material Mined	Mtonnes	596.8
Average Mined Li2O Grade	%	2.02%
Contained Li2O Metal Mined	Mtonnes	2.8
LoM Strip Ratio	Num#	3.32x

Source: SRK

Processing Profile

The processing profile was developed by SRK and results from the application of stockpile logic to the mining profile external to the economic model. No modifications were made to the profile for use in the economic model. The modeled profile is presented on a 100% basis in Figure 19-2.

Source: SRK

Figure 19-2: Greenbushes Processing Profile (Tabular data in Table 19-12)

The production profile was developed by SRK and results from the application of processing logic to the processing profile external to the economic model. No modifications were made to the profile for use in the economic model. The modeled profile is presented on a 100% basis in Figure 19-3.

Source: SRK

Figure 19-3: Greenbushes Production Profile (Tabular data in Table 19-12)

A summary of the modeled life of mine processing profile is presented in Table 19-4.


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Table 19-4: Greenbushes Processing Summary


LOM Processing	Units	Value
TECH Plant
Plant Feed (LoM)	Mtonnes	3.5
Average Annual Feed Rate	ktpy	249
Average Feed Grade (Li2O)	%	3.99%
Average Mass Yield	%	46.18%
CGP 1 Plant
Plant Feed (LoM)	Mtonnes	5717
Average Annual Feed Rate	ktpy	1,649
Average Feed Grade (Li2O)	%	2.36%
Average Mass Yield	%	29.49%
CGP 2 Plant
Plant Feed (LoM)	Mtonnes	816
Average Annual Feed Rate	ktpy	2,330
Average Feed Grade (Li2O)	%	1.58%
Average Mass Yield	%	16.77%

Source: SRK

Operating Costs

Operating costs modeled in Australian dollars and can be categorized as mining, processing and SG&A costs. No contingency amounts have been added to the operating costs within the model. All cost information in this section is presented on a 100% basis. A summary of the operating costs over the life of the operation is presented in Figure 19-4.

Source: SRK

Figure 19-4: Life of Mine Operating Cost Summary (Tabular data in Table 19-12)

The contributions of the different operating cost segments over the life of the operation are presented in Figure 19-5.


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Source: SRK

Figure 19-5: Life-of-Mine Operating Cost Contributions

Mining

The mining cost profile was developed external to the model and was imported into the model as a fixed cost on an annual basis in Australian dollars. Within the model, the cost was converted to US$ using the exchange rate profile. The result of this approach is presented in Table 19-5 below on a 100% basis.

Table 19-5: Greenbushes Mining Cost Summary


LoM Mining Costs	Unit	Value
Mining Costs	US$M	3,163
Mining Cost	US$/t mined	5.03

Source: SRK

Processing

Processing costs were incorporated into the model as variable costs. Variable costs are applied to the tonnage processed each processing plant. Table 19-6 presents the variable cost on a per tonne basis for each plant. The CR 1 crushing facility process ore for both the TECH plant and the CGP 1 plant.


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Table 19-6: Variable Processing Costs


Processing Area	Unit	Value
Crushing (CR 1)	AU$/t	6.40
Crushing (CR 2)	AU$/t	5.56
TECH Plant	AU$/t	39.89
CGP 1	AU$/t	16.73
CGP 2	AU$/t	19.28

Source: SRK

The result of this approach is presented in Table 19-7 on a 100% basis.

Table 19-7: Greenbushes Processing Cost Summary


LOM Processing Costs	Unit	Value
Processing Costs	US$M	2,550
Processing Cost	US$/t processed	17.86

Source: SRK

SG&A

SG&A costs were incorporated into the model as annual fixed and variable costs. The fixed cost component is presented in Table 19-8.

Table 19-8: SG&A Fixed Costs


Item	Unit	Value
		Op Yr 1 (Partial)	Op Yr 2	Op Yr 3	Op Yr 4	Op Yr 5+
G&A	AU$M	8.6	17.2	17.2	17.2	17.2
Water Treatment	AU$M	2.8	6.6	6.7	7.1	6.9
Market Development	AU$M	0.3	0.5	0.5	0.5	0.5

Source: SRK

Variable SG&A costs consist of the transport and shipping costs associated with moving the operation’s product to the selling point. These costs are presented in Table 19-9.

Table 19-9: SG&A Variable Costs


Item	Unit	Value
Shipping	AU$/t concentrate	35.57
Other Transport and Shipping Costs	AU$/t concentrate	19.85

Source: SRK

The result of this approach is presented in Table 19-10 on a 100% basis.

Table 19-10: Greenbushes SG&A Cost Summary


LoM SG&A Costs	Unit	Value
SG&A Costs	US$M	1,928
SG&A Cost	US$/t concentrate	59.71

Source: SRK


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Capital Costs

As the operation is an existing mine, no initial capital has been modeled. Sustaining capital is modeled on an annual basis and is used in the model as developed in previous sections. No contingency amounts have been added to the sustaining capital within the model. Closure costs are modeled as sustaining capital and are captured as a one-time payment the year following cessation of operations. The modeled sustaining capital profile is presented in Figure 19-6.

Source: SRK

Figure 19-6: Greenbushes Sustaining Capital Profile (Tabular data in Table 19-12)

19.2Results

The economic analysis metrics are prepared on annual after-tax basis in US$. The results of the analysis are presented in Table 19-11. The results indicate that, at a concentrate price of US$650/t CIF China, the operation returns an after-tax NPV@8% of US$3.2B (US$1.6B attributable to Albemarle). Note, that because the mine is in operation and is valued on a total project basis with prior costs treated as sunk, IRR and payback period analysis are not relevant metrics. Information in this section is presented on a 49% basis (portion of the project attributable to Albemarle).

Table 19-11: Indicative Economic Results (Albemarle)


LoM Cash Flow (Unfinanced)	Units	Value
Total Revenue	US$M	10,287
Total Opex	US$M	(3,744)
Operating Margin	US$M	6,542
Operating Margin Ratio	%	64%
Taxes Paid	US$M	(1,743)
Free Cashflow	US$M	3,977
Before Tax
Free Cash Flow	US$M	5,720
NPV @ 8%	US$M	2,198
After Tax
Free Cash Flow	US$M	3,977
NPV @ 8%	US$M	1,562

Source: SRK

The economic results and back-up chart information for charts within this section are presented on an annual basis in Table 19-12 and Figure 19-7.


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Table 19-12: Greenbushes Annual Cashflow and Key Project Data

Source: SRK


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Source: SRK

Figure 19-7: Annual Cashflow Summary (Tabular data in Table 19-12)

19.3Sensitivity Analysis

SRK performed a sensitivity analysis to determine the relative sensitivity of the operation’s NPV to a number of key parameters. This is accomplished by flexing each parameter upwards and downwards by 10%. Within the constraints of this analysis, the operation appears to be most sensitive to, mined lithium grades, commodity prices and recovery or mass yield assumptions within the processing plant.

SRK cautions that this sensitivity analysis is for information only and notes that these parameters were flexed in isolation within the model and are assumed to be uncorrelated with one another which may not be reflective of reality. Additionally, the amount of flex in the selected parameters may violate physical or environmental constraints present at the operation.

Source: SRK

Figure 19-8: Greenbushes NPV Sensitivity Analysis


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20Adjacent Properties

SRK notes that no adjacent properties are relevant or material to the study or understanding of the Greenbushes property. Other exploration areas exist on the same property discussed herein, and there is potential for disclosure of additional materials from these areas as they are developed. Of note is the Kapanga area, contained on the same mineral tenements as the Greenbushes Lithium Operations, which has been the subject of recent exploration drilling in 2019-2021. As of the effective date of this report, the data collection and technical work for supporting a mineral resource and reserve statement for Kapanga has not been completed.


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21Other Relevant Data and Information

SRK includes the following information as it involves future expansion options at the Greenbushes site and the reader should be aware that they could have an impact on the overall production, economics, and roll on impact of permitting.

21.1.1Technical Grade Plant (TGP)

The TGP plant operation is discussed in detail in Section 14.1. The TGP has operated historically for many years. The material feeding the plant is identified in the geologic model, then detailed grade control drilling is conducted in the pit. The results of the grade control assays are then used by Talison to assign which material is processed through the TGP. Feed to TGP is defined primarily by Li2O grade and the iron grade that will achieve the final product iron quality specification for SC7.2. The iron grade for the plant feed is governed by mineralogy and is modelled using oxides of manganese, calcium, potassium, sodium and lithium in plant feed.

21.1.2Tailings Retreatment Plant (TRP)

Greenbushes has developed and installed a Tailings Reprocessing Plant (TRP) to reprocess tailings at a rate of 2 Mt per year from Tailings Storage Facility 1 (TSF1). The TRP is planned to process approximately 10 Mt of tailings. The TRP processing facilities will be an oxide flotation plant capable of processing 2.0 Mtpa of reclaimed tailings, nominally grading 1.4% Li2O at a design feed rate of 250 tph, to produce 285 ktpa of Spodumene concentrate grading 6.0% Li2O. Feed to the TRP will be from a dedicated mining fleet operated by a Mining Contractor with experience in tailings reclamation. Feed will be directly loaded into the plant by a fleet of mining trucks or stored on a RoM stockpile adjacent to the feed bin. Mining will be conducted on a day shift only basis, with the processing plant fed by front end loader from the RoM during night shift. The TRP is located adjacent to and west of the planned TSF4. Operation of the facility has not been formally scheduled to date due to market demand.

21.1.3Chemical Grade Plants (CGP3/CGP4)

Greenbushes has developed cost estimates and designs for the expansion of chemical grade spodumene production. These expansion plans are in the form of CGP3 and CGP4. The CGP3 and CGP4 facilities will each include a single crusher plant (4.8 Mtpa) that will feed both plants and will each process 2.4 Mtpa of 1.7% Li2O at a nominal rate of 300t/h to produce 475,974tpa of SC6.0 concentrate grading 6% Li2O. The process, design, and layout of CGP3 and CGP4 is the same as CGP2. The crusher system will be located near and just south of CGP2. The CGP3/CGP4 location is on the west side of Maranup Ford Road.


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22Interpretation and Conclusions

22.1Geology and Resources

Geology and mineralization are well understood through decades of active mining, and SRK has used relevant available data sources to integrate into the modeling effort at the scale of a long term resource for public reporting. Additional data likely exists which could potentially be used to drive very small scale interpretation but would make very little impact on overall mineral resources.

Mineral resources have been estimated by SRK Consulting (U.S.) Inc. SRK generated a 3D geological model informed by various data types (primarily drilling and pit mapping) to constrain and control the shapes of the pegmatite bodies which host the Li2O. Drilling data from the exploration data set was composited within relevant geological wireframes, and Li2O grades were interpolated into a block model using ordinary kriging methods. Results were validated visually, via various statistical comparisons, and against recent reconciliation data. The estimate was depleted for current production, categorized in a manner consistent with industry standards, and reviewed with Talison site personnel. Mineral resources have been reported using an optimized pit shape, based on economic and mining assumptions to support the reasonable potential for eventual economic extraction of the resource. A cut-off grade has been derived from these economic parameters, and the resource has been reported above this cut-off.

In SRK’s is of the opinion, that the mineral resources stated herein are appropriate for public disclosure and meet the definitions of Indicated and Inferred resources established by SEC guidelines and industry standards.

22.2Reserves and Mining Methods

22.2.1Reserves and Mine Planning

SRK has reported mineral reserves that, in our opinion as QP, are appropriate for public disclosure. The mine plan, which is based on the mineral reserves, spans approximately 32 years (or approximately 35 years when including the processing of low-grade stockpiles at the end of the mine life). Annual material movement requirements are reasonable, with a peak annual material movement of approximately 24 Mt. Over the life of the project, approximately 465 Mt of waste will be mined from the open pit. A feasible waste dump design exists to accommodate the LoM waste quantity; however, a portion of the footprint of the designed waste dump extends over the Kapanga lithium exploration target. SRK recommends that Greenbushes review its waste dump design to determine whether it will be possible to move the waste dump design to a location other than the area over the Kapanga target.

22.2.2Geotechnical

The overall pit has been designed such that it meets the minimum acceptable stability criteria. Even under reduced strength conditions the slopes are predicted to remain stable. The 2021 pit has been adjusted to minimize the bullnose geometry between Cornwall and Central Lode pits to enhance stability. This is an area to watch for local stability issues, but it is not anticipated to present a major stability problem.


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There remains uncertainty in hydrogeological conditions, particularly in regard to bench face stability due to local pore pressures and the need to dewatering benches.

The character and orientation of the interpreted geologic structures in the east wall of the Central Lode have a high degree of uncertainty. Given the conservative FOS of the east wall, this uncertainty is not expected to have significant impact of predicted stability unless geologic structures locally intersect such that unstable wedges are formed. Additional structural data should be collected to mitigate this potential ahead of any local instabilities.

The thickness and strength properties of the waste dump material at the crest of the west wall of the Central Lode are uncertain. Given the adequate stability analysis results this should not be a major issue unless the assumed properties are vastly different. This can be mitigated by conducting a geotechnical investigation of the waste dump nearest the pit crest.

Local bench-scale failures and rockfalls in the west wall of the Central Lode present a safety risk. Greenbushes is aware of this need which can be mitigated via the slope monitoring program and use of safety protocols when approaching the face, including annual/semiannual bench face scaling and real-time movement monitoring.

22.3Mineral Processing and Metallurgical Testing

As part of the process design for CGP2, Greenbushes conducted an evaluation of the use of HPGR as an alternative to the ball mill grinding circuit currently used in CGP1.

Greenbushes used a combination of size distributions, Li2O analysis of size fractions and liberation data to estimate the yield and lithium recovery. Greenbushes’ HPGR yield model developed for CGP2 predicts about 5% higher overall lithium recovery than the CGP1 yield model.

CGP2 plant commissioning has not been completed and the lithium recovery benefit associated with HPGR comminution has not yet been demonstrated.

22.4Processing and Recovery Methods

Greenbushes currently has two chemical grade processing plants (CGP1 and CGP2). Commissioning of CGP2 was initiated during September 2019 and continued through April 2020 when it was shut down and placed on care and maintenance due to market considerations. The process flowsheets utilized by both CGP1 and CGP2 are similar, however, CGP2 was designed with a number of modifications based on HPGR comminution studies and CGP1 operational experience. The most notable modification included the replacement of the ball mill grinding circuit with HPGRs.

Greenbushes has developed mass yield models for both CGP1 and CGP2 which are used to predict concentrate mass yield %, based on ore grade, into concentrates containing 6% Li2O. A comparison of the CGP1 yield model with actual CGP1 plant performance shows that the CGP1 yield model is generally a good predictor of CGP1 plant performance.

However, a comparison of the CGP2 yield model with actual CGP2 plant performance during commissioning shows that CGP2 has significantly underperformed the CGP2 yield model. Greenbushes metallurgical staff have developed a new yield equation for CGP2 based on actual performance during the period 2019 to 2021. For purposes of financial modeling SRK has assumed


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that this updated yield equation will represent CGP2 production during the period 2023 to 2024 while Greenbushes works to resolve process issues related to CGP2.

SRK notes that that CGP2 and CGP1 flowsheets for are similar and both plants process ore from the same mining operation, as such, SRK believes that it is reasonable to expect that CGP2 will eventually achieve design product targets but cautions that at this point design performance of CGP2 remains to be demonstrated and has not yet been confirmed.

22.5Infrastructure

The infrastructure at Greenbushes is installed and functional. Expansion projects have been identified and are at the appropriate level of design depending on their expected timing of the future expansion. Tailings and waste rock are flagged as risks due to the potential for future expansion and location of future resources that are in development. A detailed review of long-term storage options for both tailings and waste rock will allow timely planning and identification of alternative storage options for future accelerated expansion if needed.

22.6Environmental/Social

•No Threatened Ecological Communities, Priority Ecological Communities or threatened flora have been reported in the vicinity of the mine site

•There have been seven conservation significant fauna species recorded in the mine development area

•Surface water drains through tributaries of the Blackwood River which is registered as a significant Aboriginal site that must be protected under the Aboriginal Heritage Act 1972

•Groundwater is not a resource in the local area due to the low permeability of the basement rock

•Background groundwater quality data are limited due to a lack of monitoring wells upgradient of the mine, and as monitoring wells are located close to the TSFs and/or in the historically dredged channels; some of these wells have been impacted by seepage, and is under investigation and remediation efforts


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•Studies into the potential for radionuclides has consistently returned results that are below trigger values

•There are no other cultural sites listed within the mining development area

The Project has contaminated five sites listed which encompass the entire mine area due to known or suspected contaminated sites due to hydrocarbons and metals in soil, and elevated concentrations of metals in groundwater and surface water. These sites are classified as “Contaminated – Restricted use” and only permit commercial and industrial uses. This will need to be reviewed for final land use options for closure.

Talison has agreements in place with two local groups.

22.7Closure

SRK cannot validate the current closure cost estimate because there is no information on how the unit rates used in the model were derived. Furthermore, because the model uses standard rates rather than site specific ones, and Greenbushes only overrode those rates for a few items, such as revegetation.

22.8Costs

The Greenbushes cost forecasts are based on mature mine budgets that have historical accounting data to support the cost basis and forward looking mine plans as a basis for future operating costs as well as forward looking capital estimates based on engineered estimates for expansion capital and historically driven sustaining capital costs. In SRK’s opinion, the estimates are reasonable in the context of the current reserve and mine plan.

22.9Economics

The Greenbushes operation consists of an open pit mine and several processing facilities fed primarily by the open pit mine. The operation is expected to have a 35 year life with the first modeled year of operation being a partial year to align with the effective date of the reserves. Under the forward-looking assumptions modeled and documented in this report, the operation is forecast to generate positive cashflow.


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As modeled for this analysis, the operation is forecast to produce 32.3 Mt of concentrate to be sold at a spodumene price of US$650/t CIF China. This results in a forecast after-tax project NPV@8% of US$3.2B, of which, US$1.6B is attributable to Albemarle.

The analysis performed for this report indicates that the operation’s NPV is most sensitive to variations in the grade of ore mined, the commodity price received and processing plant performance.


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23Recommendations

23.1Recommended Work Programs

23.1.1Geology and Mineral Resources

SRK recommends development of a detailed structural model to provide further support to geologic modeling of the deposit.

23.1.2Geotechnical Program

Recommendations for future geotechnical work includes the following:

•Field mapping to ground truth interpreted geologic structures and update structural model

•Conduct numerical modelling of the east wall to check for interaction with the proposed Kapanga pit

•Assess stability of each short-term pit stage for opportunities to steepen interim wall angles

•Review any additional geotechnical data from drilling in the Pegmatite Shear Zone (PSZ) to reduce uncertainties in effective rock mass properties

•Update the hydrogeological conceptual model considering VWP data and asses the benefits of dewatering on bench stability

•Conduct rock fall trials and perform a rock fall risk assessment towards developing rockfall hazard maps with focus on ramp and active pit safety

23.9.3Environmental and Closure

23.2Recommended Work Program Costs

Table 23-1 summarizes the costs for recommended work programs.


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Table 23-1: Summary of Costs for Recommended Work


Discipline	Program Description	Cost (US$)
Geology and Mineralization	Detailed structural model development	50,000
Mineral Resource Estimates	Revise mineral resource estimates using detailed structural model, incorporate higher levels of detail for geological modeling supporting short range planning.	100,000
Mineral Reserves and Mining	Review the waste dump design to determine whether it will be possible to move the waste dump to a location other than the area over the Kapanga deposit.	100,000
Geotechnical	Structural mapping, hydrogeological model update, pit phase stability assessments, rock fall assessment	90,000
Process	Conduct ongoing performance assessment on CGP2 to determine modifications/adjustments to the flow sheet to improve the performance to design levels. (estimated at (1.32US$:AU$))	56,820,000
Infrastructure	Life of Mine Tailings Disposal study, Studies required for further characterization of TSF1 and advancement of the expansion design, Comprehensive 3rd party dam safety review.	2,500,000
Environmental Studies, Permitting, and Plans, Negotiations, or Agreements with Local Individuals or Groups	Conduct comprehensive geochemical predictive modeling of the post-closure pit lakes, as this could have significant bearing on possible long-term water treatment requirements. A site-wide assessment of water quality should be completed including diffuse and point sources, and predictions of long-term water quality. This would inform closure planning and determine if long-term, post-closure water management or treatment is required.	375,000
Closure Costs	The closure cost estimate should be updated to reflect current industry best practice. The update should use standard calculating methods, site specific data, and include all costs that could be reasonably incurred. It is possible that the closure plan may require additional such as predicting the need for long term water treatment.	75,000
Total US$		$60,110,000

Source: SRK, 2020


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24References

Australian Government (2012). IBRA version 7, co-operative efforts of the Department of the Environment & Energy and State/Territory land management agencies. Topographic Data - Australia - 1:10 million (c) Geoscience Australia, 1994. All rights reserved. Caveats: Data used are assumed to be correct as received from the data suppliers. (c) Commonwealth of Australia 2012 Map produced by ERIN, Australian Government Department of the Environment and Energy, Canberra, October 2016.

Baker D. (2014). Memorandum – Historical waste mining central lode, dated February 12, 2014.

Behre Dolbear (BDA), (2012). Greenbushes Lithium Operations. NI 43-101 Technical Report prepared for Talison Lithium Limited, 104 pp., December 2012

Biologic (2011). Greenbushes Level 1 Fauna Survey, Talison Lithium Australia Pty Ltd, November 2011.

Biologic (2018a). Greenbushes Vertebrate, SRE and Subterranean Fauna Desktop Assessment, Talison Lithium Limited, 10 July 2018.

Biologic (2018b). Greenbushes Targeted Vertebrate and SRE Invertebrate Fauna Survey, Talison Lithium Limited, 10 July 2018

Brad Goode & Associates (2018). Report of an Aboriginal Heritage Survey for the Talison Lithium Mine Expansion M01/2, M01/3, M01/6, M01/7 & L01/1 Greenbushes, Western Australia, May 2018.

Bureau Veritas (2020). Management System Certification Audit Report for the Recertification Audit of TALISON LITHIUM LTD and GLOBAL ADVANCED METALS PTY LTD, Rev 16 (04/12/19).

Centre of Excellence in Natural Resource Management (2004). Ecological Water Requirements of the Blackwood River and tributaries – Nannup to Hut Pool. Report CENRM 11/04. Centre of Excellence in Natural Resource Management, the University of Western Australia. February 2005.

Department of Water and Environmental Regulation [DWER] (2020). Decision report for Works Approval Number W6283/2019/1, DWER File Number DER2019/000216.

Department of Mines and Petroleum (W. Australia), 2020. Public land tenure data as taken from Mineral Titles Online (MTO) Database, November 30, 2020.

Economic Geology and the Bulletin of the Society of Economic Geologists, 1990. Environment and Structural Controls on the Intrusion of the Giant Rare Metal Greenbushes Pegmatite, Western Australia, G. A. Partington

Environmental Protection Authority [EPA] (2020). Environmental Factor Guideline: Greenhouse Gas Emissions, EPA, Western Australia.

GCA (1994). Greenbushes Mine Geochemical Characterization Of Process Tailings Produced By The Tantalum Plant, Implications for Tailings Management, DECEMBER 1994.

GCA (2014). Memorandum - Greenbushes Mine: Appraisal of Drainage-water Quality from Floyd's Dump and Implications for Future Minewaste Management, dated 17th February 2014.


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GHD (2014). Stage 3, Integrated Geophysics and Hydrogeological Investigation, Interpretation of Geochemical data, March 2014.

GHD (2016). Talison Lithium Mine, Green Bushes, WA. Characterization of Acid Metalliferous Drainage potential from Tailings Storage Facility 2 (TSF2), September 2016.

GHD (2018). Talison Lithium Australia Pty Ltd., Greenbushes Proposed Mine Expansion Water Balance Model Update, August 2018.

GHD (2019a). Greenbushes Lithium Mine Expansion, Hydrogeological Investigation 2018, Site-wide Hydrogeological Report, January 2019.

GHD (2019b). Talison Lithium Australia Pty Ltd, Greenbushes Lithium Mine Expansion, Works Approval Application 1 Supporting Document, March 2019.

GHD (2019c). Talison Lithium Limited, Talison compliance monitoring report 2019, Surface water and groundwater, September 2019.

GHD (2019d) Talison leaching study Stage 2 AMD testing results. Unpublished report prepared for Talison Lithium Australia Pty Ltd.

GHD (2020). Talison Lithium Australia Pty Ltd, Greenbushes Lithium Mine - Dewatering Update and Pit Lake Assessment, March 2020.

Greenbase Environmental Accountants 2018, Letter - Greenhouse Gas Estimates For Greenbushes Expansion Project, dated 29 November 2018.

Greenbase Environmental Accountants )2019). Section 19 National Greenhouse and Energy Report for Windfield Holdings Pty Ltd, 2019 Financial Year

Harwood G (2018). Greenbushes Black Cockatoo Tree Hollow Review, Talison Lithium Pty Ltd, July 2018, Version 2.

Herring Storer Acoustics (2018). Proposed Expansion Greenbushes – Acoustic Assessment. Unpublished report prepared for Talison Lithium Ltd.

IT Environmental (1999). Environmental Investigation for Gwalia Consolidated Ltd, Marinup Road, Greenbushes.

Onshore Environmental (2012). Flora & Vegetation Survey, Greenbushes Mining Leases, February 2012.

Onshore Environmental (2018a). Greenbushes Mining Operations Detailed Flora and Vegetation Survey, prepared for Talison Lithium, July 2018.

Onshore Environmental (2018b). Greenbushes Infrastructure Corridors Detailed Flora and Vegetation Survey, prepared for Talison Lithium, 3 December 2018.

Onshore Environmental (2018c). Visual Impact Assessment, Greenbushes Lithium Mine Expansion, Prepared for Talison Lithium, 28 September 2018.

Pells Sullivan Meynink (2020). Central Mine Life of Mine Feasibility Slope Design, PSM2193-059R.pdf, January 15, 2020.


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Sons of Gwalia Ltd. (2004). Greenbushes Operations, Tailings Management New Cell, Notice Of Intent, Reg ID 4870.

SRK Consulting (2020). Greenbushes Slope Stability Analysis, December 8, 2020.

Talison (2011). Talison Lithium Australia Pty Ltd, Greenbushes Mine Site, Project 640, 2011 Lithium Processing Plant Upgrade, Version 3 - June 2011.

Talison (2016). Greenbushes Operations Mine Closure Plan 2016. Reg ID 60857.

Talison (2017). Site Management Plan, Environmental ENV 1001 Surface Water Management Plan, Version 5A, August 2017.

Talison (2018). Greenbushes Central Lode Pegmatite; Li2O Estimate – Resource Report, March 31, 2018

Talison (2019a). Mining Proposal, Version 1.0, 23rd July 2019, Reg ID 80328.

Talison (2019b). Annual Environmental Report, Talison Lithium Australia Pty Ltd L4247/1991/13, 1 July 2018 to 30 June 2019.

Talison (2020a). Water Management Plan. Site Management Plan: ENV-MP-1001, version 7, dated 28 July 2020.

Talison (2020*). Multiple internal reports or files provided by Talison to SRK over the course of this review.


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25Reliance on Information Provided by the Registrant

The Consultant’s opinion contained herein is based on information provided to the Consultants by Albemarle throughout the course of the investigations. Table 25 1 of this section of the Technical Report Summary will:

(i) Identify the categories of information provided by the registrant;

(ii) Identify the particular portions of the Technical Report Summary that were prepared in reliance on information provided by the registrant pursuant to Subpart 1302 (f)(1), and the extent of that reliance; and

(iii) Disclose why the qualified person considers it reasonable to rely upon the registrant for any of the information specified in Subpart 1302 (f)(1).

Table 25-1: Reliance on Information Provided by the Registrant


Category	Report Item/ Portion	Portion of Technical Report Summary	Disclose why the Qualified Person considers it reasonable to rely upon the registrant
Discount Rates	19	19 Economic Analysis	Albemarle provided discount rates based on the company’s Weighted Average Cost of Capital (WACC). While this discount rate is higher than what SRK typically applied to mining projects (ranging from 5% to 12% dependent upon commodity), SRK ultimately views the higher discount rate as a more conservative approach to project valuation.
Foreign Exchange Rates	19	19 Economic Analysis	SRK was provided with exchange rates from a well-recognized financial firm. These rates are broadly in-line with the current spot exchange rates. As such, it is SRK’s opinion that the rates provided are appropriate.
Tax rates and government royalties	19	19 Economic Analysis	SRK was provided with tax rates and government royalties for application within the model. These rates are in line with SRK’s understanding of the tax regime at the project location.
Environmental Studies	17	17.1 Environmental Studies	SRK was provided various environmental studies conducted on site. These studies were of a vintage that independent validation could not be completed.
Environmental Compliance	17	17.3.4 Environmental Compliance	Registrant provided regulatory compliance audit results. SRK did not conduct an independent regulatory compliance audit as part of the scope.
Local Agreements	17	17.4 Local Individuals and Groups	Registrant provided agreements with local stakeholders. SRK was unable to query all project stakeholders on issue of agreements.


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Signature Page

This report titled “SEC Technical Report Summary, Pre-Feasibility Study, Greenbushes Mine, Western Australia” with an effective date of June 30, 2021, was prepared and signed by:

SRK Consulting (U.S.) Inc. (Signed) SRK Consulting (U.S.) Inc.

Dated at Denver, Colorado

December 16, 2022


Greenbushes_SEC_Report_515800.040			December 2022

Exhibit 96.2


SEC Technical Report Summary Initial Assessment Wodgina Western Australia Effective Date: September 30, 2020 Report Date: December 31, 2021 Amended Date: December 16, 2022
Report Prepared for Albemarle Corporation 4250 Congress Street Suite 700 Charlotte, North Carolina 28209
Report Prepared by SRK Consulting (U.S.), Inc. 1125 Seventeenth Street, Suite 600 Denver, CO 80202 SRK Project Number: 515800.040

SRK Consulting (U.S.), Inc.


SEC Technical Report Summary – Wodgina			Page ii

Table of Contents


1 Executive Summary			9
1.1 Property Description (Including Mineral Rights) and Ownership			9
1.2 Geology and Mineralization			9
1.3 Status of Exploration, Development and Operations			9
1.4 Mineral Resource and Mineral Reserve Estimates			10
1.5 Conclusions and Recommendations			10
2 Introduction			12
2.1 Registrant for Whom the Technical Report Summary was Prepared			12
2.2 Terms of Reference and Purpose of the Report			12
2.3 Sources of Information			12
2.4 Details of Inspection			12
2.5 Qualified Person			12
2.6 Report Version Update			13
3 Property Description			14
3.1 Property Location			14
3.2 Property Area			16
3.3 Mineral Title, Claim, Mineral Right, Lease or Option Disclosure			16
3.4 Mineral Rights Description and How They Were Obtained			19
3.5 Encumbrances			19
3.6 Other Significant Factors and Risks			19
3.7 Royalties or Similar Interest			19
4 Accessibility, Climate, Local Resources, Infrastructure and Physiography			20
4.1 Topography, Elevation and Vegetation			20
4.2 Means of Access			20
4.3 Climate and Length of Operating Season			21
4.4 Infrastructure Availability and Sources			21
4.4.1 Water			22
4.4.2 Electricity			22
4.4.3 Personnel			22
4.4.4 Supplies			22
5 History			23
5.1 Previous Operations			23
5.2 Exploration and Development of Previous Owners or Operators			24
6 Geological Setting, Mineralization, and Deposit			25
6.1 Regional, Local and Property Geology			25
6.1.1 Regional Geology			25
6.1.2 Local Geology			26
6.1.3 Property Geology			29


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6.2 Mineral Deposit			33
6.3 Stratigraphic Column and Local Geology Cross-Section			35
7 Exploration			38
7.1 Exploration Work (Other Than Drilling)			38
7.2 Exploration Drilling			38
7.2.1 Drilling Type and Extent			38
7.2.2 Drilling, Sampling, or Recovery Factors			42
7.2.3 Drilling Results and Interpretation			46
7.3 Hydrogeology			46
7.4 Geotechnical Data, Testing and Analysis			51
7.5 Property Plan View			51
7.6 Exploration Target			52
8 Sample Preparation, Analysis and Security			53
8.1 Sample Preparation, Assaying and Analytical Procedures			53
8.2 Quality Control Procedures/Quality Assurance			54
8.3 Opinion on Adequacy			57
8.4 Non-Conventional Industry Practice			58
9 Data Verification			59
9.1 Data Verification Procedures			59
9.2 Limitations			59
9.3 Opinion on Data Adequacy			59
10 Mineral Processing and Metallurgical Testing			60
11 Mineral Resource Estimates			61
11.1 Geological Modelling			61
11.2 Adequacy of Data and Non-Conventional Industry Practice			62
11.2.1 Structural Interpretation and Modeling			62
11.3 Key Assumptions, Parameters, and Methods Used			67
11.3.1 Compositing			68
11.3.2 Capping			68
11.3.3 Exploratory Data Analysis			69
11.3.4 Spatial Continuity			72
11.3.5 Estimation and Search Neighborhood			75
11.4 Reasonable Prospects for Economic Extraction			77
11.5 Resource Classification and Criteria			78
11.6 Uncertainty			78
11.7 Multiple Commodity Resource			80
11.8 Mineral Resource Statement			80
11.9 Mineral Resource Sensitivity			80
11.10 Opinion on Influence for Economic Extraction			82


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12 Mineral Reserve Estimates			83
13 Mining Methods			84
14 Processing and Recovery Methods			85
15 Infrastructure			86
15.1 Power, Water and Pipelines			86
16 Market Studies			87
17 Environmental Studies, Permitting, and Plans, Negotiations, or Agreements with Local Individuals or Groups			88
18 Capital and Operating Costs			89
19 Economic Analysis			90
20 Adjacent Properties			91
21 Other Relevant Data and Information			92
22 Interpretation and Conclusions			93
23 Recommendations			94
23.1 Recommended Work Programs			94
24 References			95
25 Reliance on Information Provided by the Registrant			96
Signature Page			97

List of Tables


Table 1-1: Wodgina Summary Mineral Resources at End of Fiscal Year Ended December 31, 2021 SRK Consulting (U.S.), Inc.			10
Table 3-1: Land Tenure Table			17
Table 3-2: Summary Royalty and Liabilities.			19
Table 5-1: Ownership History of the Wodgina Property			24
Table 7-1: Recent Drilling Campaigns on the Wodgina Property			41
Table 8-1: Elements, Units and Detection Limits for Analyses Conducted by NAGROM Laboratory			53
Table 11-1: Summary Descriptive Statistics by Logged Lithology Type			70
Table 11-2: Variography Parameters for the 2020 Resource Block Model.			76
Table 11-3: Assigned Bulk Density in Resource Block Model			77
Table 11-4: Wodgina Summary Mineral Resources at End of Fiscal Year Ended December 31, 2021 SRK Consulting (U.S.), Inc.			80
Table 11-5: Summary Mineral Resource Comparison Between October 2018 and September 2020 Resource Models			81


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Table 11-6: Grade x Tonnage Chart			82
Table 25-1: Reliance on Information Provided by the Registrant			96

List of Figures


Figure 3-1: Location Map of the Wodgina Property, Western Australia, Australia			14
Figure 3-2: Wodgina Property Tenure Map			15
Figure 4-1: Oblique Aerial View of the Wodgina Camp Looking South to the Minesite			20
Figure 4-2: Regional Road and Rail Infrastructure			21
Figure 6-1: Regional Geology Map			26
Figure 6-2: Local Geology Map of the Wodgina Pegmatite District			28
Figure 6-3: Wodgina Property Geology Map			30
Figure 6-4: Wodgina Outcropping Pegmatite Example, Visible Spodumene Crystals			34
Figure 6-5: Wodgina Pegmatite Grey White Spodumene Crystals (Specimen Around 30 cm Long)			35
Figure 6-6: Long-Section from Northeast to Southwest across the Main Portion of the Deposit			35
Figure 6-7: Generalized Stratigraphic Column from the Mt. Cassiterite Pit			36
Figure 6-8: Generalized Stratigraphic Column Through Mt. Cassiterite Pegmatite Dyke			37
Figure 7-1: Mt. Magnet Drilling Hydro 150 Drilling RC in the Mt. Cassiterite Pit (During 2008)			40
Figure 7-2: Atlas Copco D65 Drill Rig			41
Figure 7-3: GAM Sample Preparation Flow Sheet.			45
Figure 7-4: Eastward Looking Longitudinal Section of the Cassiterite Deposit Showing Classification.			46
Figure 7-5: Drillhole Locations of Noted Groundwater			48
Figure 7-6: Groundwater Monitoring Locations.			50
Figure 7-7: Pit Geotechnical Hazards			51
Figure 7-8: Plan Map of the Wodgina Property Showing All Drillhole Traces			52
Figure 8-1: CRM AMISO339 Control Performance Chart - Li2O (%)			55
Figure 8-2: CRM AMISO340 Control Performance Chart - Li2O (%)			56
Figure 8-3: CRM AMISO343 Control Performance Chart - Li2O (%)			57
Figure 11-1: Plan View Map of the Wodgina Lithology Model (Overburden and Fill Removed)			62
Figure 11-2: Regional Structural Geology Interpretation			63
Figure 11-3: Schematic Structural Cross Section in the Wodgina Area			64
Figure 11-4: Mt. Cassiterite Pit Structural Interpretation			65
Figure 11-5: Cross Section of Wodgina Geological Model			66
Figure 11-6: Differing Elemental Behavior between the Mt. Cassiterite and North Hill Areas			67
Figure 11-7: Histograms of (L) Log Raw Sample Length and (R) Composite Length			68
Figure 11-8: Log Probability for Li2O in Pegmatites			69
Figure 11-9: Box and Whisker Plots for Li2O for (L) all Lithologies and (R) Pegmatite Domains			71


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Figure 11-10: Histogram of Li2O Distribution for (L) Schist-Hosted and (R) Metasediment-Hosted Pegmatites			72
Figure 11-11: Modelled Semi-Variogram for Li2O in the Metasedimentary Domain			73
Figure 11-12: Modelled Semi-Variogram for Li2O in the Schist Domain			73
Figure 11-13: Modelled Semi-Variogram for Fe in the Metasedimentary Domain			74
Figure 11-14: Modelled Semi-Variogram for Fe in the Schist Domain			74
Figure 20-1: Adjacent Mining to the Wodgina Property			91


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SEC Technical Report Summary – Wodgina			Page vii

List of Abbreviations

The metric system has been used throughout this report. Tonnes are metric of 1,000 kg, or 2,204.6 lb. All currency is in U.S. dollars (US$) unless otherwise stated.


Abbreviation			Unit or Term
A			ampere
AA			atomic absorption
A/m2			amperes per square meter
°C			degrees Centigrade
CoG			cut-off grade
cm			centimeter
cm2			square centimeter
cm3			cubic centimeter
cfm			cubic feet per minute
ConfC			confidence code
CRec			core recovery
°			degree (degrees)
dia.			diameter
g			gram
g/t			grams per tonne
ha			hectares
ICP			induced couple plasma
IDW2			inverse-distance squared
IDW3			inverse-distance cubed
kg			kilograms
km			kilometer
km2			square kilometer
kt			thousand tonnes
kt/d			thousand tonnes per day
kt/y			thousand tonnes per year
kV			kilovolt
kW			kilowatt
kWh			kilowatt-hour
kWh/t			kilowatt-hour per metric tonne
L			liter
L/sec			liters per second
L/sec/m			liters per second per meter
LOI			Loss On Ignition
LoM			Life-of-Mine
m			meter
m2			square meter
m3			cubic meter
masl			meters above sea level
mg/L			milligrams/liter
mm			millimeter
mm2			square millimeter
mm3			cubic millimeter
Mt			million tonnes
MTW			measured true width
MW			million watts


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m.y.			million years
%			percent
ppm			parts per million
QA/QC			Quality Assurance/Quality Control
RC			rotary circulation drilling
RoM			Run-of-Mine
RQD			Rock Quality Description
SEC			U.S. Securities & Exchange Commission
sec			second
SG			specific gravity
t			tonne (metric ton) (2,204.6 pounds)
t/h			tonnes per hour
t/d			tonnes per day
t/y			tonnes per year
TSF			tailings storage facility
V			volts
VFD			variable frequency drive
W			watt
XRD			x-ray diffraction
y			year


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SEC Technical Report Summary – Wodgina			Page 9

1Executive Summary

This report was prepared as an Initial Assessment-level (IA) Technical Report Summary in accordance with the Securities and Exchange Commission (SEC) S-K regulations (Title 17, Part 229, Items 601 and 1300 until 1305) for Albemarle Corporation (Albemarle) by SRK Consulting (U.S.), Inc. (SRK) on the Wodgina Mine asset (Wodgina).

The report was amended to include additional clarifying information in December 2022. The basis of the report is unchanged. The summary of the changes and location in document are summarized in Chapter 2.2.

1.1Property Description (Including Mineral Rights) and Ownership

The Wodgina property lies approximately 110 kilometers (km) south-southeast (S-SE) of Port Hedland, Western Australia between the Turner and Yule Rivers. The area includes multiple prominent ridges up to 180 m above mean sea level (mamsl) surrounded by plains and lowlands. The center of the property is located at Mount Cassiterite - 21° 11' 25"S, 118° 40' 25"E (World Geodetic System [WGS] 1984).

The property tenure is held under the joint venture of Albemarle Wodgina Pty Ltd. and Wodgina Lithium Pty Ltd. with ownership structure of 60% Albemarle Corporation and 40% Mineral Resources Ltd. (MRL). The operating joint venture entity is known as MARBL.

1.2Geology and Mineralization

The Wodgina pegmatite deposits (including the historic Wodgina, Mt. Cassiterite, and Tinstone pits) are hosted within the Paleoarchean East Strelley Greenstone Belt in the Pilbara Craton of Western Australia, Australia.

The property is located within the Wodgina Pegmatite District. This pegmatite district is entirely hosted in the eastern limb of the Wodgina greenstone belt along the southern portion of the Wodgina-Strelley lineament. This greenstone belt is a north-northeast (N-NE) plunging synform separating the Yule and Carlindi granitoid complexes within Central zone of the Pilbara Craton.

The Mt. Cassiterite pegmatite group is classified as a rare element albite-spodumene type pegmatite. Spodumene (LiAlSi2O6) is the primary lithium-bearing mineral. It is massive to weakly layered pegmatite with comb-textured megacrystic microcline and spodumene with aplitic layers often displaying pseudo gneissic banding. Unlike many other Pilbara Craton pegmatite bodies, the Mt. Cassiterite pegmatites tend to not display internal structure such as mineralogical layering or banding. Lithium minerals are predominantly spodumene and lepidolite. Prior to focusing on lithium production, the Mt. Cassiterite deposit was exploited for tantalum-bearing wodginite and cassiterite with subordinate maganocolumbite and manganotantalite with associated microcline alteration (Huston, et al., 2001). Other significant minerals include spessartine (Mn aluminosilicate garnet), elbaite (Na-Li alumino-boro-silicate tourmaline) and native Bi.

1.3Status of Exploration, Development and Operations

The Wodgina property is currently on care and maintenance by MARBL. The site has experienced intermittent production since the early twentieth century. The Mt. Cassiterite pit, the primary focus of


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this TRS, is an open pit with maintained infrastructure on-site and access to regional roads and ports.

1.4Mineral Resource and Mineral Reserve Estimates

Mineral Resources were updated in September 2020 by SRK as summarized in Table 1-1.

Table 1-1: Wodgina Summary Mineral Resources at End of Fiscal Year Ended December 31, 2021 SRK Consulting (U.S.), Inc.


Category	100%	Attributable	Li2O (%)	Cut-Off (% Li2O)	Mass Yield (%)
	Tonnes	Tonnes
	(Mt)	(Mt)
Indicated	22.3	13.4	1.39	0.50	15.06%
Inferred	164.2	98.5	1.15	0.50	12.46%

Source: SRK, 2020

Notes:

• The Summary Mineral Resources attributable tonnes reflects Albemarle’s 60% ownership percentage in the Wodgina project.

The effective date for this Mineral Resource is September 30, 2020. All significant figures are rounded to reflect the relative accuracy of the estimates.

• Tonnages are presented as million tonnes (Mt) with lithium oxide (Li2O) grades presented as percentages.

• The Mineral Resource estimate has been classified in accordance with SEC S-K 1300 guidelines and definitions.

• The Cassiterite Deposit comprises the historically mined Mt. Cassiterite pit and undeveloped North Hill areas.

• Metallurgical recovery of lithium has been estimated on a block basis at a consistent 65% based on documentation from historical plant production.

• To demonstrate reasonable prospects for eventual economic extraction of Mineral Resources, a cut-off grade of 0.5% Li2O based on metal recoverability assumptions, long-term lithium price assumptions of US$584 per tonne (t), variable mining costs averaging $3.40/t, processing costs and G&A costs totaling $23/t.

As the project-level is current at Initial Assessment-level, the property contains no Mineral Reserves.

1.5Conclusions and Recommendations

Wodgina is a large spodumene pegmatite deposit that features existing infrastructure for spodumene concentrate production, but which currently sits in care and maintenance. The geology of the site is relatively complex and features a number of challenges due to variations in morphology and mineralogy of the pegmatites. Such variability is common in spodumene pegmatites and is generally related to inherent structural complexity of host rocks, rheology of host rocks and the characteristics of various phases of pegmatite intrusion which commonly accompany lithium mineralization. SRK has considered all provided and relevant data in developing a more robust structural and lithological interpretation to constrain and control the mineral resource estimation (MRE). The lack of sufficient data to adequately characterize these aspects of certain areas of the project has been incorporated in the mineral resource classification process. It is expected that risks in the geological interpretation and MRE are likely to remain until extensive additional geological work has been done across the deposit, and that ongoing de-risking through closely spaced drilling is likely to be a part of downstream mining development.

Wodgina is a previously mined project with an extensive operational background in elements other than lithium. Despite this, lithium production is a relatively recent addition to Wodgina (effectively post-2016), with the majority of the lithium information being generated or characterized from remnant historic tin/tantalum drilling. All data supporting the current MRE was provided to SRK by MARBL, and exploration and development of Wodgina continues.


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While Wodgina features extensive drilling and previous production, significant uncertainty around the deposit remains. SRK has accounted for these risks in the MRE process and classification, and notes that the following additional work is recommended for the project going forward:

•Characterize the mineralogy and process recoverability of both the Mt. Cassiterite and North Hill areas of Wodgina. SRK understands this to be ongoing in new drilling on the project at this time.

•Refine the structural model for Wodgina utilizing core drilling to collect accurate structural measurements and provide influence in updated geological modeling and MRE.

•Characterize the recoverability and process for the existing tin/tantalum operation tailings, which have been noted to contain significant quantities of lithium.

•If production is to be advanced at Wodgina, closely spaced grade control drilling and short-term planning should be considered to de-risk areas.

•The project should advance to pre-feasibility study (PFS) levels of development with accompanying technical study of relevant modifying factors of the mineral resource.


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2Introduction

2.1Registrant for Whom the Technical Report Summary was Prepared

This Technical Report Summary was prepared in accordance with the SEC S-K regulations (Title 17, Part 229, Items 601 and 1300 through 1305) for Albemarle by SRK on the Wodgina property located in Western Australia, Australia. Albemarle has a 60% ownership in Wodgina with MRL retaining the remaining 40%. The joint venture operating entity is titled MARBL.

2.2Terms of Reference and Purpose of the Report

The quality of information, conclusions, and estimates contained herein are consistent with the level of effort involved in SRK’s services, based on i) information available at the time of preparation and ii) the assumptions, conditions, and qualifications set forth in this report. This report is intended for use by Albemarle, and is subject to the terms and conditions of its contract with SRK and relevant securities legislation. The contract permits Albemarle to file this report as a Technical Report Summary with American securities regulatory authorities pursuant to the SEC S-K regulations, more specifically Title 17, Subpart 229.600, item 601(b)(96) - Technical Report Summary and Title 17, Subpart 229.1300 - Disclosure by Registrants Engaged in Mining Operations. Except for the purposes legislated under securities law, any other uses of this report by any third party are at that party’s sole risk. The responsibility for this disclosure remains with Albemarle.

The purpose of this Technical Report Summary is to report mineral resources as part of an initial assessment. The IA is preliminary in nature, it includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the IA will be realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

The report was revised to include additional clarifying information in December 2022. The basis of the report is unchanged. The changes and location in document are summarized as follows:

•Amended date of report on title page

•Resource totals adjusted to reflect Albemarle 60% ownership (Chapter 1.4 and 11.8)

•Additional QP comment on adequacy of metallurgical testing (Chapter 8.3, 10, 14)

2.3Sources of Information

This report is based, in part on internal Company technical reports, previous studies, maps, published government reports, Company letters and memoranda, and public information as cited throughout this report and listed in the References Section 24.

Reliance upon information provided by the registrant is listed in the Section 25, when applicable.

2.4Details of Inspection

Due to the global pandemic, no site inspection has been conducted on the property by Qualified Persons (QP). Site visits are in-plan by QPs once travel restrictions and health and safety are considered acceptable for travel.


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2.5Qualified Person

2.6Report Version Update

This TRS is not an update of a previously filed Technical Report Summary. This report represents an IA as defined by SEC S-K 1300 definitions.


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3Property Description

3.1Property Location

The Wodgina property lies approximately 110 km S-SE of Port Hedland, Western Australia between the Turner and Yule Rivers. The area includes multiple prominent greenstone ridges up to 180 mamsl surrounded by granitic plains and lowlands. The center of the property is located at Mount Cassiterite - 21° 11' 25"S, 118° 40' 25"E (WGS, 1984).

The property tenure is held under the joint venture of Albemarle Wodgina Pty Ltd. and Wodgina Lithium Pty Ltd. with ownership structure of 60% Albemarle and 40% MRL. The joint company is known as MARBL. A location map of the Wodgina property is shown in Figure 3-1 and Figure 3-2.

Source: Modified after Google

Figure 3-1: Location Map of the Wodgina Property, Western Australia, Australia


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Source: MARBL, 2021

Figure 3-2: Wodgina Property Tenure Map


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3.2Property Area

The total area of leases covering the Wodgina property cover a total of 111.4 square kilometers (km2) (43 square miles [mi]) (DMP, 2021). This includes various tenement types of general purpose and mining leases along with retention and miscellaneous licenses.

3.3Mineral Title, Claim, Mineral Right, Lease or Option Disclosure

The Wodgina property is located on Mining Lease M45/50, M45/353, and M45/887. These tenements are located within the Karriyarra native title claim and are subject to the Land Use Agreement dated March 2001 between the Karriyarra People and Gwalia Tantalum Ltd. (now the joint venture partners of Albemarle and MRL). All tenements are in good standing with no known impediments as of the effective date of this report (DMP, 2021).

Payment associated with tenement renewal to the State of Western Australia are:

•Mining Lease – AU$100 per hectare (ha), minimum AU$5,000

•General Purpose Lease – AU$17.90 per ha rent payment per annum

•Miscellaneous License – AU$17.90 per ha rent payment per annum


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Table 3-1: Land Tenure Table

Tenement ID

Tenement Type

Survey Status

Status

Holders

Grant Date (DD/MM/YYYY)

End Date (DD/MM/YYYY)

Fmt_Tenid

Legal Area (Ha)

Special_

Ind

Extract_

Date

G4500029

General purpose lease

Surveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

18/07/1990

25/07/2032

G45/29

9.6505

11/05/2021

12:00:00 AM

G4500269

General purpose lease

Surveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

27/01/2005

28/01/2026

G45/269

9.612

11/05/2021

12:00:00 AM

G4500270

General purpose lease

Surveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

27/01/2005

28/01/2026

G45/270

9.043

11/05/2021

12:00:00 AM

G4500271

General purpose lease

Surveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

27/01/2005

28/01/2026

G45/271

9.3595

11/05/2021

12:00:00 AM

L4500093

Miscellaneous license

Unsurveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

25/03/1998

24/03/2023

L45/93

134.9

11/05/2021

12:00:00 AM

4500058

Miscellaneous license

Unsurveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

09/12/1988

08/12/2023

L45/58

11/05/2021

12:00:00 AM

L4500064

Miscellaneous license

Unsurveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

18/05/1990

17/05/2025

L45/64

11/05/2021

12:00:00 AM

L4500105

Miscellaneous license

Unsurveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

01/06/2001

31/05/2022

L45/105

1682

11/05/2021

12:00:00 AM

L4500009

Miscellaneous license

Unsurveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

19/10/1984

03/07/2026

L45/9

12.5

11/05/2021

12:00:00 AM

L4500108

Miscellaneous license

Unsurveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

29/06/2001

28/06/2022

L45/108

1560

11/05/2021

12:00:00 AM

M4500050

Mining lease

Surveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

28/06/1984

03/07/2026

M45/50-I

364.5

11/05/2021

12:00:00 AM

M4500382

Mining lease

Surveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

05/07/1988

11/07/2030

M45/382

58.24

11/05/2021

12:00:00 AM

M4500886

Mining lease

Surveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

22/03/2001

21/03/2022

M45/886

6.81

11/05/2021

12:00:00 AM

M4500887

Mining lease

Surveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

22/03/2001

21/03/2022

M45/887-I

30.575

11/05/2021

12:00:00 AM

M4500049

Mining lease

Surveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

28/06/1984

03/07/2026

M45/49

85.95

11/05/2021

12:00:00 AM

M4500924

Mining lease

Surveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

26/03/2001

25/03/2022

M45/924-I

520.1

11/05/2021

12:00:00 AM

M4500383

Mining lease

Surveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

05/07/1988

11/07/2030

M45/383-I

110.6

11/05/2021

12:00:00 AM

M4500925

Mining lease

Surveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

26/03/2001

25/03/2022

M45/925-I

612.55

11/05/2021

12:00:00 AM

M4500950

Mining lease

Surveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

11/07/2001

10/07/2022

M45/950-I

677.8

11/05/2021

12:00:00 AM

M4500949

Mining lease

Surveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

11/07/2001

10/07/2022

M45/949

804.15

11/05/2021

12:00:00 AM

M4500254

Mining lease

Surveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

19/10/1987

28/10/2029

M45/254

77.97

11/05/2021

12:00:00 AM


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M4500353

Mining lease

Surveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

15/05/1988

18/05/2030

M45/353

35.395

11/05/2021

12:00:00 AM

M4500381

Mining lease

Surveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

05/07/1988

11/07/2030

M45/381

287.65

11/05/2021

12:00:00 AM

M4500365

Mining lease

Surveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

02/10/1988

09/10/2030

M45/365-I

206.6

11/05/2021

12:00:00 AM

M4500888

Mining lease

Surveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

22/03/2001

21/03/2022

M45/888

12.755

11/05/2021

12:00:00 AM

G4500290

General purpose lease

Surveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

22/01/2010

21/01/2031

G45/290

9.945

11/05/2021

12:00:00 AM

G4500291

General purpose lease

Surveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

22/01/2010

21/01/2031

G45/291

9.677

11/05/2021

12:00:00 AM

G4500321

General purpose lease

Surveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

05/10/2011

04/10/2032

G45/321

296.55

11/05/2021

12:00:00 AM

L4500443

Miscellaneous license

Unsurveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

05/11/2018

04/11/2039

L45/443

196.405

11/05/2021

12:00:00 AM

L4500451

Miscellaneous license

Unsurveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

05/02/2019

04/02/2040

L45/451

1.674

11/05/2021

12:00:00 AM

R4500004

Retention license

Unsurveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

21/07/2017

20/07/2022

R45/4

2469

11/05/2021

12:00:00 AM

L4500452

Miscellaneous license

Unsurveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

05/02/2019

04/02/2040

L45/452

5.992

11/05/2021

12:00:00 AM

L4500437

Miscellaneous license

Unsurveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

11/04/2018

10/04/2039

L45/437

733.23

11/05/2021

12:00:00 AM

L4500441

Miscellaneous license

Unsurveyed

Live

Albemarle Wodgina Pty Ltd; Wodgina Lithium Pty Ltd

21/11/2018

20/11/2039

L45/441

0.82

11/05/2021

12:00:00 AM

Source: DMP, 2021


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1.4Mineral Rights Description and How They Were Obtained

Mineral rights were obtained by the registrant through a joint venture agreement (JV) in 2018 between Albemarle Corporation and Mineral Resources Ltd when the registrant acquired a 60% interest in the Wodgina property to form the JV MARBL.

The mining lease tenements are retained through meeting the requirements set forth by the State of Western Australia, Department of Mines and Petroleum (DMP). Renewal applications are met for 12-month periods by providing justification to the DMP for reasons of renewal with accompanying rent payments.

1.5Encumbrances

SRK has relied upon the legal information regarding title provided by Albemarle as noted in section 25, and is unaware of any encumbrances upon the Wodgina property.

1.6Other Significant Factors and Risks

SRK is unaware of any significant factors or risks that may affect property access, title or the right to perform work on the Wodgina property.

1.7Royalties or Similar Interest

Table 3-2 represents the royalty and liabilities in-place for the Wodgina property.

Table 3-2: Summary Royalty and Liabilities.


Royalties/Liability			Details of Amounts Payable
Mine Rehabilitation Fund (MRF) Funding for Closure including payment offset obligations			Annual MRF levy $ 157,093.76 (1% of the Liability according to the MRF) Based on 653.46Ha Disturbance and 242.32Ha Rehabbed
Royalties payable under Pastoral and Native Title Agreements			$450,000 per annum payment owed to the Kariyarra People’s Trust (pursuant to Land Use Agreement for Wodgina Mine between the Karriyarra People and Gwalia Tantalum Pty Ltd dated 8 March 2001) We did not identify a royalty fee for the Wallareenya Pastoral Lease.
Royalties payable under Global Advanced Metals (GAM) Agreement			Royalties owed by Wodgina Lithium Pty Ltd (WLPL) to GAM: M 45/381 (WLPL to pay 1.75% royalty to GAM). M 45/382 M 45/383 M 45/886 (WLPL to pay 1.75% royalty to GAMG). Clause 2 of the Lithium Royalty Deed dated 8 September 2016 between Global Advanced Metals Wodgina Pty Ltd (GAMW), GAMG and Global Advanced Metals (GAM) provides that the Royalty payable by the Grantor (GAMW) to the Grantee (GAMG) will be 1.75% on Gross Revenue (in relation to Lithium extracted and recovered from processing the Tailings extracted from the Tailings Dam situated on the dam or reservoir situated on the area the subject of the Tenements) in respect of each Royalty Period (30/6, 30/9, 31/12, 31/3).

Source: Personal Communication – MRL, 2021


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4Accessibility, Climate, Local Resources, Infrastructure and Physiography

The Wodgina property lies approximately 110 km south-southeast of Port Hedland, Western Australia between the Turner and Yule Rivers. The area includes multiple prominent greenstone ridges up to 180 mamsl surrounded by granitic plains and lowlands. The center of the open cut mine at Mount Cassiterite is located at the latitude and longitude of -21° 11' 25"S, 118° 40' 25"E.

4.1Topography, Elevation and Vegetation

The topography onsite varies between 150 mamsl and 330 mamsl (500 ft and 1,100 ft) and is described as rolling hills and valleys. The vegetation onsite is considered a combination of grassland with spare shrubs with predominant species being Triodia basedowii and Triodia schinzii. The general topography and site elevation is demonstrated in Figure 4-1.

Source: Atlas Iron Ore, 2021

Figure 4-1: Oblique Aerial View of the Wodgina Camp Looking South to the Minesite

4.2Means of Access

The property is accessible via National Highway 1 to National highway 95 to the Wodgina camp road. All roads to site are sealed bitumen. The nearest large regional airport is in Port Hedland which also hosts an international deep-water port facility. A site dedicated all-weather airstrip is located onsite capable of landing A320 jet aircrafts.


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Source: Modified after MRL, 2018

Figure 4-2: Regional Road and Rail Infrastructure

4.3Climate and Length of Operating Season

The climate of the Wodgina property is categorized as a hot desert climate characterized by hot summers (average 40 to 45º Celsius [C]) and mild winters (average 20ºC). The majority of precipitation occurs during the summer months with annual averages around 300 millimeters (mm) per year (DPIRG, 2021).

Due to the hot to mild climate of the area, the Wodgina property maintains a year-round operating season.

4.4Infrastructure Availability and Sources

The Wodgina property has year-round availability of infrastructure; a water bore field, a natural gas pipeline, an accommodation camp, sealed road access, and a dedicated airstrip able to service A320 jets.

The property is currently in care and maintenance with site infrastructure available but not currently in-use. Equipment, infrastructure, and assets at the Wodgina property including the following:

•Three stage crushing plant capable of sustaining 5.65 million tonnes per annum (Mt/a) of ore feed to the Spodumene concentration plant


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•Administrative and office buildings

•750-room accommodation camp on the property

•81 km long, 10-inch gas pipeline to site

•32 each 2-megawatt (MW) gas gensets for a total power station size of 64 MW

•Three mature and reliable water bore fields with minimal contaminant removal required

•All weather airstrip capable of landing A320 jet aircraft

•Extension of TSF3 for future tailing storage

4.4.1Water

Water is obtained from three dedicated water bore fields located on the property.

A series of monitoring bores are installed around the toe of the Eastern Waste Landform (EWL). These monitoring bores require monthly reporting on water levels and quarterly reporting on ambient groundwater quality and will continue to be monitored for any analytical signs that acid production is occurring within the waste landform.

Groundwater data for the EWL monitoring bores is only in its infancy for WLPL, monitoring was conducted from September 2017 through closure of the operation in November 2019. Data collected from these monitoring bores in the last year of the operation has been compared against Australian and New Zealand Environment and Conservation Council’s (ANZECC) livestock drinking water guideline. The only exceedance reported was for total dissolved solids (TDS), which is consistent with the natural variation in the area.

4.4.2Electricity

The Wodgina property has a dedicated 10-inch natural gas pipeline which runs from the Pilbara Energy pipeline to the property. The pipeline feeds the site power station which consists of 32 generator sets sized at 2 MW each with a total capacity of 64 MW. The natural gas pipeline was upgraded from 4-inch to 10-inch pipe in 2019.

4.4.3Personnel

The Wodgina property maintains a 750-room accommodation camp located on-site. Personnel access the camp via sealed highway or the on-site airstrip servicing a fly-in fly-out (FIFO) workforce based in a larger population area such as Perth.

4.4.4Supplies

The Wodgina property is supplied via road access well-maintained roadways or via the on-site airstrip.


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5History

The Wodgina pegmatite deposits were discovered in 1902. Since then, the pegmatite-hosted deposits have been mined for tin, tantalum, beryl, and lithium. Tantalum production began in 1905, with most early production sourced from alluvial and eluvial deposits.

Tantalite was discovered at the location in 1901 by Francis and William Michell, who subsequently mined 70 t of ore between 1905 and 1909. In the early part of the twentieth century, Tantalite was a rare commodity, and despite its remoteness, Wodgina supplied most of the world's Tantalite. In the early years of mining, the ore was carted by camel to the coast for export. Tantalite Ltd was formed by Lady Deborah V. Hackett-Moulden and N.S. Young. Tantalite Ltd mined the site between 1925 to 1943, exporting tantalite ore concentrate mainly to the United States.

In 1943, the mine was taken over by the Australian Government as part of its wartime effort. Tantalite concentrate continued to be exported to the United States, and in addition, during this period beryl was exported. In 1927, geologist E.S Simpson had identified large masses of cesium bearing white beryl at the northern end of the pegmatite.

After World War II, Tantalite Ltd, continued to operate the mine, however, by 1953 it had run out of funds, and the mine was sold to Northwest Tantalum Ltd. This company found its new purchase to be uneconomic and relinquished the lease by 1957. Between 1957 to 1963 the mine was operated by prospector L.J. Wilson. In 1963, the mine was purchased by J.A. Johnson and Sons Pty Ltd, by Avela in 1967, and by Goldrim Mining in 1968. Goldrim formed a partnership with Goldfield Corp (New York) and Chemalloy Minerals Ltd (Toronto).

The investigations into the pegmatite by this last JV discovered the new species Wodginite. Mining occurred sporadically until Goldrim formed a new partnership with Pan West Tantalum Pty Ltd, who began open pit mining at the site in 1989. By 1994, most of the pegmatite had been removed and mining ceased from the Wodgina Pit.

The Mount Cassiterite pit operations were established in 1989 and progressively expanded during the 1990s. A major expansion in 2002 increased the mine's capacity to 635 t of tantalum pentoxide (Ta2O5) per annum. The mining operation extracted tantalum bearing pegmatite ores from the Mount Cassiterite and Tinstone open pits. The ores were crushed, milled and fed into the Wodgina plant's advanced gravity separation. A primary tantalum concentrate is produced at Wodgina, and then sent to the Greenbushes mining operation for secondary processing to produce on-specification, saleable tantalum products. The mine was placed on care and maintenance in 2008, 2012, and most recently in 2019. The current owners of the Wodgina property are the JV MARBL. There is no active mining on the property at the time of this report.

5.1Previous Operations

The ownership of the Wodgina property has changed multiple time since initial mineralization discovery in 1902. Details of past owners have been compiled from various sources but remain incomplete and vague in terms of the details around ownership (Table 5-1).


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Table 5-1: Ownership History of the Wodgina Property


Years			Owners
1901 - 1909			Francis and William Michell
1925 - 1943			Tantalite Ltd.
1943 - 1945			Australian Commonwealth government
1945 - 1953			Tantalite Ltd.
1953 - 1957			Northwest Tantalum Ltd.
1957 - 1963			L. J. Wilson
1963 - 1967			J.A. Johnson and Sons Pty Ltd.
1967			Avela
1968 - 1989			Goldrim Mining/Goldfield Corp
1989 - 2001			Goldrim and Pan West Tantalum Pty Ltd. JV
2001 - 2005			Sons of Gwalia
2005 - 2009			Talison Minerals
2009 - 2016			Global Advanced Metals (previously known as Talison Tantalum)
2016 - 2019			Mineral Resource Ltd.
2019			MARBL (JV between Mineral Resource Ltd. and Albemarle Corp.)

Source: SRK, 2020 compiled from multiple publications.

5.2Exploration and Development of Previous Owners or Operators

There is no known documentation available related to historic exploration work on the Property. There have been numerous governmental and academic studies on the occurrences of pegmatite, variable mineralogy, and mineralization in the Wodgina pegmatite district. Work has included regional scale mapping by the Geological Survey of Western Australia (GSWA, 2001), scientific publications from Geoscience Australia, and various technical studies by the multitude of operating companies.

Exploration and development history for the property includes a variety of owners with sporadic production of multiple products over the life of the Wodgina property. Due to the complex nature of production and limited historic data available, the following represents a high-level account of production history on the property:

•Pre-1945: Various Producers: The Wodgina main load produced 85 t of beryl

•Pre-1984: Various Producers: The Wodgina main load produced 269 t of tantalum and an inferred 44 t of niobium

•Global Advanced Metals (GAM)/Talison: Mining was focused on in the Mt. Cassiterite Pit area

◦Prior to 1988: The Mt. Cassiterite pit area produced an estimated 308 t of tantalum, 193 t of tin, and 39 t of niobium

◦1988 to 1994: Wodgina main load pit ceased operation

◦Late 1990s into early 2000s: The Tinstone Pit commenced production

◦2001 to 2002: FY production of 442 t of Ta2O5 concentrate

◦2008: Mine placed in care and maintenance

◦2010 to 2011: Mining restarted

◦2012: Mine placed in care and maintenance

•Mineral Resources Ltd. operated the Mt. Cassiterite pit from April 2017 until November 2019

•MARBL was formed in late 2019 with the property immediately placed in care and maintenance after closure of the JV agreement.


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6Geological Setting, Mineralization, and Deposit

6.1Regional, Local and Property Geology

6.1.1Regional Geology

The Wodgina pegmatite deposits (including the historic Wodgina, Mount Cassiterite, and Tinstone pits) are hosted within the Paleoarchean East Strelley Greenstone Belt in the Pilbara Craton of Western Australia, located approximately 100 km S-SE of Port Hedland (Mount Cassiterite Pit at 21° 11' 25"S, 118° 40' 25"E).

The Archean Pilbara Craton consists of large, domal, multiphase granitoid-gneiss complexes bordered by sinuous synformal to monoclinal greenstone belts (Hickman, 1983; Griffin, 1990; Barley, 1997). The greenstone belts range in age from approximately 3.56 to approximately 2.94 giga-annum (Ga), with the granitoids emplaced over a similar but slightly younger time span (e.g., Champion and Smithies, 1998). Although, the supracrustal rocks are structurally complex, the primary stratigraphic units may be correlated between greenstone belts (Hickman, 1983, 1990). The granitoid-greenstone terrane of the Pilbara Craton has been subdivided into tectonostratigraphic domains with boundaries defined by north northeast, south southwest (NNE-SSW) to northeast southwest (NE-SW) trending structural lineaments that regionally have a sinistral shear sense. The following lithotectonic units have been identified:

•East Pilbara granite-greenstone terrane

•Central Pilbara tectonic zone

•West Pilbara granite-greenstone terrane

At least seven episodes of granitic magmatism have been identified between 3.47 and 2.80 Ga. During this period, granitic magmatism became increasingly potassic and large ion lithophile element enriched, with increased compositional variability from tonalite-trondhjemite granodiorite to calc-alkaline and alkaline granite compositions due to cyclic crustal reworking and growth (Champion and Smithies, 1998). Most of the granitoid-gneiss complexes have tectonic margins, with little evidence of contact metamorphism of adjacent supracrustal sequences (Hickman, 1983). Granitic magmatism culminated with emplacement of a suite of 2.89 to 2.83 Ga granite plutons at (e.g., Blockley, 1980; Pidgeon, 1984; Bickle, et al., 1989; Smithies and Champion, 1998, 2001) and a 2.76 Ga suite of small A-type granites and stocks of tourmaline rich S-type peraluminous granites (Smithies and Champion, 1998). There is good spatial, geochemical, and geochronological evidence to link rare metal pegmatites in the Pilbara Craton with emplacement of the younger granite suite (e.g., Blockley, 1980; Kennedy, 1998; Kinny, 2000; Sweetapple, et al., 2000). Figure 6-1 shows the regional geology map.


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Source: Sweetapple, 2000

Figure 6-1: Regional Geology Map

6.1.2Local Geology

The property is located within the Wodgina Pegmatite District. This pegmatite district is entirely hosted in the eastern limb of the Wodgina greenstone belt along the southern portion of the Wodgina-Strelly lineament. This greenstone belt is a north-northeast plunging synform separating the Yule and Carlindi granitoid complexes within Central zone of the Pilbara Craton (Figure 6-1).

The Wodgina greenstone belt consists of mafic-ultramafic volcanics, sedimentary, and intrusive rocks, including ultramafic komatiites, mafic basalt, clastic sedimentary rocks, banded iron formation (BIF), and cherts. All rocks within the belt have undergone greenschist to lower amphibolite facies metamorphism at relatively low pressures (Sweetapple and Collins, 2002). A younger leucocratic granitoid of the Numbana Monzogranite is present on the eastern margins of the Wodgina greenstone belt.

Structurally, the Wodgina greenstone belt forms the core of a north-plunging synform. The Wodgina and Mt. Cassiterite deposits are located near the axis of the synform and near a left-lateral (sinistral) shear zone adjacent to the marginal leucocratic phase of the Numbana Monzogranite. It is


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composed principally of interlayered mafic and ultramafic schists and amphibolite, with subordinate komatiite, clastic sediments, BIF and chert. The komatiitic and metasedimentary units within the Wodgina area are tentatively correlated to the Kunagunarrina and Leilira Formations respectively.

Archean volcanic activity and sedimentation was followed by the intrusion of Archean granitic batholiths with consequent deformation and metamorphism of the sequence. Late-stage granitic intrusions resulted in the emplacement of simple and complex pegmatite sills and barren quartz veins.

A major regional shear zone separates the two main pegmatite groups at Wodgina and Mt. Cassiterite. Both pegmatite groups have been emplaced syntectonically into fault/shear zones, with a predominantly reverse sense of movement. This emplacement has been related to a semi-concordant control of pegmatite distribution in both areas by F2 fold hinges and limbs. The Wodgina main lode pegmatite appears to be related to a major inclined fold hinge, while the pegmatites of the Mt. Cassiterite group appear to be sheets joined by a number of parasitic fold hinges.


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Source: Sweetapple and Collins, 2002

Figure 6-2: Local Geology Map of the Wodgina Pegmatite District


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6.1.3Property Geology

The property geology has been broken into two primary areas:

•The Cassiterite area containing the Mineral Resources of the Mt. Cassiterite Pit and the North Hill area

•The historic production area of the Wodgina pit located in the northern portion of the property.

There are distinct differences in whole rock geochemistry between the two different pegmatite suites (Sweetapple and Collins, 1998) (Figure 6-2). The Wodgina pegmatite has a higher niobium: tantalum ratio than Mt. Cassiterite, which has a higher tin: tantalum ratio. These differences are reflected in the two different tantalum mineral suites in each pegmatite group. Significant differences were also noted in the gallium and beryllium contents, which were enriched and depleted respectively, in the Wodgina main lode pegmatite relative to the Mt. Cassiterite pegmatite group. The mineral assemblages in both pegmatite groups have undergone a significant degree of subsolidus recrystallisation (Sweetapple and Collins, 1998).


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Source: Sweetapple, 2001

Figure 6-3: Wodgina Property Geology Map

Mt. Cassiterite Pegmatite Group

These pegmatites lie directly to the south of the Wodgina group and cover an area of approximately 1.1 by 0.8 km (Figure 6-4). They comprise a series of interlinked pegmatite sheets, dikes and irregular offshoot structures, and in contrast to the Wodgina group, have been emplaced within a thick formation of metasedimentary rocks, mostly composed of fine-grained psammite and thinly interbedded pelite with minor quartzite and chert (Sweetapple et al., 2001). Immediately north of the


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Mt. Cassiterite pit, pegmatites have been intercepted from drilling hosted in amphibolite schist and generally display thicker individual pegmatite dikes with different chemistries than those observed and previously mined in the metasediments-hosted pegmatite sheets of the Mt. Cassiterite pit.

Within the Mt. Cassiterite pit, multiple sets of stacked pegmatite sheets occur, mostly 5 to 12 m thick, but ranging from 2 to 100 m and generally dipping 20 to 25°SE with localized 'roll-overs' dipping at 15 to 20°W to SW. These sheets are interconnected by near-vertical dikes that trend NW-SE and NE-SW, by irregular keel-like structures, and by thin stringers of pegmatite, all of which were emplaced at the same time. These pegmatite sheets were apparently syntectonically emplaced into a series of thrust faults that postdate at least two earlier deformation events identified by prominent cleavages and folding in the host metasedimentary rocks (Sweetapple and Collins, 2002).

Mount Cassiterite pegmatite appear to have a primary mineralogy and texture characteristic of albite-spodumene-type pegmatites, including an abundance of albite and primary spodumene with subordinate K feldspar and minor muscovite in near homogeneous sheeted bodies. The pegmatite sheets display a massive to comb-textured internal structure which Sweetapple and Collins (2002) regard as also being characteristic of albite-spodumene type pegmatites (Ginzburg and Lugovski, 1977; Cerny, 1992), with minor aplitic and K feldspar-rich layering.

These sheets are mostly unzoned, with a mineralogy dominated by megacrystic spodumene and perthitic microcline in a matrix of fine- to medium-grained quartz, albite and muscovite. Spodumene crystals are mostly aligned nearly perpendicular to the pegmatite contacts, typically exhibiting distinctive 'pull apart' structures. A weak zonation is evident as the development of finer grained border units, and occasional areas rich in microcline crystals.

Secondary assemblages, dominantly composed of fine-grained albite, variably overprint the assemblage outlined above in most areas of the pegmatite sheets. This alteration developed an accompanying pseudo-gneissic textured banding and syn-tectonic deformational textures. Cataclastic and proto-mylonitic textures are evident in places in the pegmatites. However, the micaceous minerals of the banding do not display a true schistosity, suggesting final crystallization of the pegmatite took place under hydrostatic stress conditions, after the termination of deformation association with emplacement (Sweetapple, 2000).

North Hill Pegmatite Group

These pegmatites lie directly to the north of the Mt. Cassiterite group under the area known locally as North Hill. Details on the mineralogy, chemistry, and association of these pegmatites is largely unknown but may represent a continuum of pegmatite emplacement between Mt. Cassiterite and the Wodgina Pegmatite Group to the north. This group has been identified through drilling in the North Hill area with various interpretations of the geometry and continuity over the years. Because no structural data to date has been collected in the area, the orientation is largely speculative.

The North Hill Pegmatite Group is hosted in a primary schist lithology, though logging varies greatly in the area. It is unknown whether the host lithology is complex, or the historic data is merely unreliable. This pegmatite group generally exhibits lower Li2O grades than in the Mt. Cassiterite area, along with displaying materially larger thicknesses than observed in the Mt. Cassiterite Pit. Internal pegmatite banding and mineralogy is largely unknown as evaluation and exploration activities in this Group have been conducted by reverse circulation (RC) drilling methods with analyses focused on chemistry and not mineralogy. Trace geochemistry of the North Hill Pegmatite Group varies from the


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Mt. Cassiterite deposit located immediately to the south. It is inferred by MARBL that the primary Li mineralogy is spodumene. Although the general geochemistry of the area can be characterized by the current RC dominant drilling, deficiencies in the mineralogical characterization, metallurgical testwork, and other factors relevant to economic evaluations remain risks to the understanding of the viability of the pegmatites to support mining and processing in the North Hill area.

Wodgina Pegmatite Group

This group includes the Wodgina main lode pegmatite, plus several smaller pegmatites that are mostly subparallel to the main structure (Figure 6-3). They are characterized by an abundance of cleavelandite and/or sugary albite and are almost entirely hosted by variably foliated metakomatite. The Wodgina pit has historically exploited the Wodgina Main Lode pegmatite and associated secondary pegmatites for tantalum. The current economic focus on the property is for Li resources, whereas the Wodgina pegmatite group hosted Li as minor lepidolite and associated Li-bearing micaceous minerals.

The Wodgina main lode pegmatite is a sheeted dike that trends north-south, dips at 20 to 50° east (E), and cuts across the foliation of the host rock, which strikes north-south to NE-SW, and dips to the west. This pegmatite has a total strike length of approximately 1 km and varies from 5 to 40 m in thickness. However, most mining has been confined to the northern 500 m, where the pegmatite segments are thickest. Small offshoots of the pegmatite are subparallel to the foliation of the metakomatite host rocks.

The pegmatite postdates most of the deformation of the Wodgina greenstone belt and was apparently partially controlled by pre-existing folding and faulting. It is cut by late steeply dipping normal faults, while the northern end was disaggregated by later dip-slip faulting and late strike-slip shearing (Sweetapple et al., 2001). The northern portion of the pegmatite body has also been observed to be intruded around the hinge zone of an asymmetric fold, and its associated long limb (Sweetapple, 2000). While the pegmatite has a general easterly dip, it varies from a dike in the south, to a large bulbous mass with a saddle shape that pinches out rapidly into thin angular sheets in the north.

Although pegmatite zonation typical of highly fractionated pegmatites is not well developed in the Wodgina main lode, the zonation that is developed, takes the form of two main compositional assemblages in primary layers that subparallel contacts, as: i). layers of massive cleavelandite (a variety of albite) with rare quartz, spessartine and muscovite on both the footwall and hanging wall of the dike, and ii). a broad central unit of banded aplitic to granitic-textured medium to coarse grained albite-quartz-muscovite ±megacrystic perthitic microcline.

These assemblages are less regularly distributed on the northern end of the dike. The central bulbous section of the main dike contained a large irregular segregation of massive quartz up to 50 m wide and 60 m long. Ellis (1950) noted that the cleavelandite units appear to locally intrude the aplitic/granitic textured unit.

The marginal cleavelandite assemblage zones in the hanging wall and footwall are partially overprinted by a secondary fine-grained sugar-textured albite ±muscovite assemblage, and by lepidolite ±albite alteration of the micaceous aplitic-granitic textured unit. An intense 5 to 30 centimeter (cm) thick concentration of exomorphic mica was developed on the contacts with the wall


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rocks (Sweetapple, 2000). Hall (1988) notes discrete units rich in beryl, spodumene and fluorite associated with these secondary overprints.

This tantalum mineralization is almost always within the massive cleavelandite units, commonly occurring in the core of radial aggregates of cleavelandite, and frequently as coarse skeletal-textured manganotantalite crystals clustered at the base of the hanging wall massive cleavelandite unit, suggesting precipitation and gravitational settling from that massive unit (Sweetapple, 2000).

The Wodgina main lode pegmatite is characterized by high-grade tantalum mineralization, and the presence of secondary lepidolite, or lithian muscovite, is consistent with it being an extremely fractionated pegmatite (Sweetapple et al., 2001). The primary cleavelandite and secondary albite units constitute approximately 78 vol.% of the pegmatite. The bulk composition of the pegmatite is more sodic and less silicic than most other rare metal pegmatites, consistent with the albite type of Cerny (1993). Other albite-enriched pegmatites close to the Wodgina main lode pegmatite are also considered to be of the albite type, as they have similar internal structure and modal mineralogy. Sweetapple and Collins (2002) suggest the low contents of rare alkali elements and volatile elements such as boron (B), Phosphorus (P), fluorine (F), and higher magnesium (Mg) and iron (Fe) values than other rare metal pegmatites are most likely to be the result of extensive ion exchange with the metakomatite wall rock. The same authors suggest it provide field evidence for the separation of a residual sodic melt enriched in lithophile elements escaping from crystallizing semi-consolidated albite-spodumene pegmatite sheets at Mount Cassiterite and appear to represent a regional zonation relationship.

6.2Mineral Deposit

The Mt. Cassiterite pegmatite group is classified as a rare element albite-spodumene type pegmatite. Spodumene (LiAlSi2O6) is the primary lithium-bearing mineral. It is massive to weakly layered pegmatite with comb-textured megacrystic microcline and spodumene with aplitic layers often displaying pseudo gneissic banding. Unlike many other Pilbara Craton pegmatite bodies, the Wodgina and Mt. Cassiterite pegmatites tend to not display internal structure such as mineralogical layering or banding. Lithium minerals are predominantly spodumene and lepidolite with secondary tin (Sn) in microlite, and manganese (Mn) in tantalite and columbite calciotantite. Other significant minerals include spessartine (Mn aluminosilicate garnet), elbaite (Na-Li alumino-boro-silicate tourmaline) and native Bi.

Geochronological work at the Wodgina deposit using various dating techniques (Rb-Sr, K-Ar, and Pb/Pb SHRIMP) provide pegmatite emplacement dates around 2,800 mega annum (Ma). This timing and other relationships suggest the likely source for the Wodgina pegmatites to be the Numbana Monzogranite.

The pegmatites at Wodgina have a semi concordant relationship to regional-scale parasitic folding (Sweetapple and Collins, 2002). Differences between the emplacement nature of the Wodgina and Mt. Cassiterite dykes appear to be controlled largely by the host rocks. The large discrete Wodgina “main lode” pegmatite is hosted in mafic-ultramafic sequence (metakomatite) compared to the smaller dike swarm at Mt. Cassiterite which is hosted within a metasedimentary (meta-arenite/psammite) sequence (Sweetapple, 2000). In addition to the main spodumene pegmatite dikes, smaller (less than 0.5 m thickness) veins and/or alternation of wall rock contain pegmatite-related


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mineralogy of quartz-tourmaline-mica-albite-cassiterite. These secondary features often occupy parallel fractures adjacent to the main dike swarms.

At this time, individual pegmatites vary in strike length from approximately 200 m to 400 m. The thinner near surface pegmatites vary from 10 m to 30 m in thickness but vary locally from less than 2 m to up to 35 m thick. The massive basal pegmatite varies from 120 m to 200 m thick. The pegmatites intrude the mafic volcanic and meta-sedimentary host rocks of the surrounding greenstone belt.

The lithium in the Cassiterite Pit and shallower pegmatites occurs as 10 to 30 cm long grey, white spodumene crystals within medium grained pegmatites comprising primarily of quartz, feldspar, spodumene and muscovite (Figure 6-4 and Figure 6-5). Typically, the spodumene crystals are oriented orthogonal to the pegmatite contacts. Some zoning of the pegmatites parallel to the contacts is observed, with higher concentrations of spodumene occurring close to the upper contact. In the massive basal pegmatite, the spodumene is distributed within fine-grained quartz, feldspar, spodumene and muscovite matrix.

Source: MRL, 2018

Figure 6-4: Wodgina Outcropping Pegmatite Example, Visible Spodumene Crystals


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Source: MRL, 2018

Figure 6-5: Wodgina Pegmatite Grey White Spodumene Crystals (Specimen Around 30 cm Long)

6.3Stratigraphic Column and Local Geology Cross-Section

Figure 6-6 shows a generalized long-section of the North Hill - Mt. Cassiterite area containing the extents of Mineral Resources on the property. The long section shows the transition from amphibolite schist-hosted Li-pegmatites to metasedimentary-hosted Li-pegmatites in the Mt. Cassiterite Pit area.

Source: SRK, 2020

Figure 6-6: Long-Section from Northeast to Southwest across the Main Portion of the Deposit

Figure 6-7 and Figure 6-8 illustrate a typical stratigraphic column through the Mt. Cassiterite pit area and an individual pegmatite dike respectively.


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Source: Sweetapple, 2001

Figure 6-7: Generalized Stratigraphic Column from the Mt. Cassiterite Pit


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Source: Sweetapple, et al., 2017

Figure 6-8: Generalized Stratigraphic Column Through Mt. Cassiterite Pegmatite Dyke


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7Exploration

7.1Exploration Work (Other Than Drilling)

All exploration work is currently performed via drilling. SRK is not aware of additional surveys (geochemical, geophysical, etc.) which have been performed over the Wodgina site by or on behalf of the registrant.

7.2Exploration Drilling

Exploration drilling which is utilized in the geological interpretation and MRE is summarized in the sub-sections below. Considering the history of exploration on the property, there are numerous drillholes pre-1990 that are not utilized as part of any Mineral Resource determination and lack detailed descriptions or documentation, which have been excluded from this report.

7.2.1Drilling Type and Extent

Drilling at the Wodgina property has historically been dominated by RC drilling methods. In addition to RC, both diamond drilling (DDH) and rotary air-blast (RAB) methods have been utilized in a limited capacity for specific purposes such as preliminary exploration, metallurgical, or geotechnical data collections.

Drilling in the Mt. Cassiterite area has been carried out by a number of drilling contractors and by a variety of different methods over the years. Drilling carried out by the Pan West JV included 3,825 m of air track: 1,145 m of RC drilling and 204 m of DDH.

Under GAM, who operated the property in the late 1990s, six development-drilling programs have been completed at the Mt. Cassiterite pit. The first, in 1996, involved a track mounted RC rig completing a 3,464 m drilling program, a resource extension program during 1998 to 99 comprised 17,586 m of RC drilling and 2,225 m of DDH, a further resource extension program in 2001 comprised 18,694 m of RC drilling, A RC infill-drilling program in Mt. Tinstone area commenced in February 2002 and totaled 5,432 m, further resource drilling was conducted in 2002/03 consisting of 12,805 m of RC drilling. As a result of this program, an infill-drilling program was carried out which targeted the East Ridge mining area, totaling 2,948 m.

Additional resource drilling, completed in March 2004, consisted of 3,866 m of RC drilling and later infill drilling for a total of 12,930 m. The 2004 drill campaign was designed to extend the resource to the south of Mt Tinstone, as well as determine the extent of the pegmatite sheets adjacent to the old Wodgina Pit, north of the Mt. Cassiterite mining area. This drilling was conducted by a track-mounted RC drill rig and consisted of 3,866 m. The drilling to the south of Mt Tinstone highlighted a significant extension of the Mt Tinstone pegmatite sheets and was subsequently infill-drilled by two drill rigs (wheel and track-mounted) for a total of 12,930 m.

Concurrent with this drilling, an infill-drilling program was also being carried out in the Mt. Cassiterite area aimed at better defining the nature of the pegmatite sheets. This drilling consisted of 8,984 m.

In 2005, further RC drilling was undertaken to determine the limits of the South Tinstone pegmatite to the south, as well as systematically infill the main Mt. Cassiterite area to achieve at least a 25 m by 25 m pattern. Selected areas within the Mt. Cassiterite area were drilled to 25 m by 12.5 m to provide data for an assessment of the effects of closer spaced drilling. This drilling included 8,458 m of


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wheel-mounted RC drilling in Mt. Cassiterite and 2,220 m in South Tinstone. In addition to this, 1,017.5 m and 382.7 m of DDH was conducted in the Mt. Cassiterite and Tinstone areas respectively. The drilling allowed further detail to be placed on the pegmatite physical geology model. The resultant model was used as the basis of an optimization study to allow a revised pit design and schedule to be produced.

A two-staged RC drilling program was undertaken between July and October of 2006. The first stage was aimed at completing the 25 by 25 m grid-based grade control drilling, targeting the deeper portions of the resources that lay within the pit designs associated with the 2006 optimization study. The second stage involved scout resource evaluation of the known extensions to resources outside and down dip of the resources inside the pit design. A total of 7,898 m was drilled from 86 holes. The drilling allowed for the updating and refinement of the 2006 physical geology model of the deposit, as well as further spatial grade definition within the pegmatite sequence. The refinement was the basis of the 2007 MRE. The second stage exploratory RC drilling program consisted of 1,138 m drilled from five holes.

A small metallurgical and geotechnical focused DDH program was completed in 2006 in the Mt. Cassiterite and Mt Tinstone pits and totalled 1,518.7 m of HQ3 core.

In 2008, an infill RC drilling program was carried out in the Mt Tinstone and Mt. Cassiterite pits. The total program involved 1,914 m of drilling for 47 holes and was planned to target gaps in geological understanding at relatively shallow depths (less than 80 m) relevant to the pit floor level development, up until the mine was placed on care and maintenance. The program was based within the resource models of the Mt Tinstone and Mt. Cassiterite areas.


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Source: GAM, 2010

Figure 7-1: Mt. Magnet Drilling Hydro 150 Drilling RC in the Mt. Cassiterite Pit (During 2008)

August and September of 2010 saw the completion of a further RC infill drilling program, with the intent of improving the understanding of the spatial dispersion and grades of the pegmatites in the resource model between the mine grid sections 20400N to 20800N of the Mt. Cassiterite pit. The general strategy of the program is to provide an improved reconciliation of tonnes and grade for future mining in this area. In all, 27 RC holes were drilled for a total of 2,024 m.

After the property was acquired by MARBL, a RC drilling program of 245 holes was conducted between September 2016 and July 2017 for a total of 61,825 m. MRL directed RC drilling was carried out using a face sampling hammer and a 142 mm diameter bit. Blast hole drilling was carried out with Atlas Copco BH rigs using a 140 mm diameter bit. No additional resource drilling has been completed on the property since 2018.

During 2018, MRL conducted a shallow drill program to assess potential resources in the tailings storage facilities (TSF). The TSF’s have been drilled on a nominal 50 m by 50 m pattern with an Open Hole Percussion Atlas Copco D65 drill rig (Figure 7-2). Hole diameter is nominally 165 mm. While this program has previously been utilized in disclosing Mineral Resources in the TSF (MRL, 2019), SRK notes that the lack of metallurgical testwork provided precludes definition of this material as a Mineral Resource herein.


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Source: Widenbar and Associates, 2018

Figure 7-2: Atlas Copco D65 Drill Rig

Table 7-1: Recent Drilling Campaigns on the Wodgina Property


Year	Type	Length (m)	Areas
1996	RC	3,464	Mt. Cassiterite
1998	RC	17,586	Mt. Cassiterite
1998	DDH	2,225	Mt. Cassiterite
2002	RC	5,432	Tinstone
2002	RC	12,805	Tinstone and Mt. Cassiterite
2002	RC	2,948	Mt. Cassiterite
2004	RC	3,866	Mt. Cassiterite
2006	RC	7,898	Mt. Cassiterite
2008	RC	1,914	Tinstone and Mt. Cassiterite
2010	RC	2,024	Mt. Cassiterite
2016	RC	61,825	Mt. Cassiterite

Source: Widenbar, 2018


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Collar and Downhole Survey

Historic collar locations were surveyed by a differential global positioning system (dGPS) which achieves an accuracy of ± 0.01 m. All down-hole survey data was converted to Wodgina Mine Grid and corrected for magnetic declination. The grid system is MGA Zone 51 (GDA94) for horizontal data and AHD (based on AusGeoid09) for vertical data.

For pre-2008 RC drilling programs, down-hole surveying was conducted using a single shot Eastman down-hole camera, equipped with a “high-dip‟ compass for all vertical holes. For diamond holes, survey shots were taken every 20 m and at the end of hole. The RC holes had camera shots taken at either 40 m or 50 m intervals, as well as at the end of hole. All camera shots were taken inside the 6 m stainless steel starter rod.

For the 2010 and 2012 RC drilling, all except for a few collapsed holes were gyro surveyed to compare the data. Gyro-derived data was recorded at the surface and 5 m intervals down-hole to the end of the hole. Ultimately, the gyro-surveyed data was accepted as the most-accurate of the down-hole surveys and this data was adopted into the database to project the drillhole strings.

During the 2017 and 2018 drilling program, all except for a few collapsed holes were surveyed using a north-seeking gyro survey tool. Gyro-derived data was recorded at the surface and random intervals down-hole to the end of the hole. Reflex North seeking (NS) gyros were used to survey both vertical and inclined drillholes. Ultimately, the NS gyro-surveyed data was accepted as the most-accurate of the down-hole surveys and this data was adopted into the database. Drillhole collars were surveyed by MRL Wodgina mine surveyor on a campaign basis using RTK dGPS.

7.2.2Drilling, Sampling, or Recovery Factors

Pre-2016, Li2O data on the Wodgina property was obtained from re-analysis of historic samples and rejects stored onsite. Drilling, sampling, and analyses were originally focused on tantalum resources prior to 2016.

Prior to 2008, RC chip samples were collected at 1 m intervals and split with a riffle splitter. RC samples were split with a cone splitter after 2008, to produce a sub-sample of 3 to 5 kilograms (kg) for analysis. Sieved chips from the RC drilling were logged geologically at 1 m intervals, with information recorded including lithology, color, mineralogy, grain size, texture, alteration, structure, weathering and hardness. Sample condition and recovery also were noted for each metre. Chips were collected in pre-numbered chip trays and after logging, stored in exploration sea container at Wodgina mine site.

Similar to RC chips, diamond core was logged geologically at 1 m intervals except the lithological boundaries. Lithology, color, mineralogy, grain size, texture, alteration, structure, weathering and hardness were noted, furthermore diamond core was orientated and logged for geotechnical qualities, core recovery, RQD, fractures count per m, and structures were recorded. Sampled core was photographed (dry and wet) and weighted for density calculation.

Samples have also been collected from the MRL drilling campaign conducted between July 2016 and August 2018. An RC rig-mounted cone splitter was used, with samples falling through an inverted cone splitter, splitting the sample into a 90/10 ratio. A 10% off-split is retained in a calico bag. The 90% split residue is stored on ground. All pegmatite intercepts were sampled at 1 m intervals plus 2 m of adjacent waste was sent for laboratory analysis.


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Historic sample recoveries are near 100% in the pegmatite, sample loss mainly occurs in shear zones and occasionally on contacts. Most loss is recorded at the start of holes, near collars. MRL recoveries are almost all logged as 80%. There is a low probability of preferential loss of sample having an effect on the grade of pegmatites. RC recoveries are recorded as a percentage based on visual and weight estimates of the sample.

When moist or wet ground conditions were experienced in historic drilling, the cyclone was washed out between each sample and run further to ensure no inter-sample contamination. The rig had a dust collection system that involved the injection of water into the sample pipe before the sample reached the cyclone. This water injection prevented fines from being lost out of the top of the cyclone. This system was employed to minimize dust fines being released into the atmosphere in the work area and to minimize the possibility of the sample being positively biased by the loss of the lighter minerals such as quartz, feldspar, and mica, thus effectively concentrating the heavier ore minerals such as tantalite.

RC chips were dried at 100°C. All samples below approximately 4 kg were totally pulverized in LM5’s to nominally 85% passing a 75-micron (μm) screen. The few samples generated above 4 kg were crushed to less than 6 mm and riffle split first prior to pulverization.

All HQ3 core pegmatite intercepts were quartered lengthwise using a diamond core-saw, with one quarter of the core for the pegmatite intercepts sent for XRF analysis. Selected intervals of most of the pegmatite intercepts (in the HQ3 core) were then sampled (as half-core) for metallurgical analysis.

All NQ2 core was geologically logged and split lengthwise into half core using a diamond core-saw, with half core samples sent for XRF analysis.

All diamond drill core assay samples were taken at regular 1 m intervals or at smaller intervals to conform to logged pegmatite contacts.

Commercially prepared certified reference materials (CRM) were inserted amongst the drill samples.

MRL 2018 Drill report:

A nominal 2 kg to 3 kg RC sample was collected for each metre. Samples were collected using a static cone splitter mounted below the cyclone; the material falling through the cone splitter was split in 90/10 ratio. 10% off-split was retained in a pre-numbered calico bag with the remaining residue collected in buckets and dumped on the ground in sequence adjacent to the hole.

All pegmatite intercepts were sampled at 1m intervals along with 2 m into the footwall and hangingwall of adjacent waste and delivered to the NAGROM Laboratory in Perth for analysis; samples outside the pegmatite except adjacent waste were not assayed.

After geological login of a NQ core a sample spread sheet was created with the sample intervals. 1m intervals in pegmatite zones adjusted by lithological contacts on footwall and hanging wall plus approximately 2 m of waste on each side were sampled. The core was cut in half, put in pre-


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numbered calico bags and delivered to the NAGROM Laboratory in Perth for analysis; samples outside the pegmatite except adjacent waste were not assayed.

Widenbar 2017

In March-April 2016, a program was instituted to retrieve as many RC pulp samples as possible from storage at Wodgina and re-assay the pegmatite zones for Li2O%. Li2O has been assayed by ICP005 at Nagrom Laboratories.

GAM 2013

Sample preparation is routinely undertaken at the Wodgina onsite laboratory. Received samples less than 2 kg are rejected and extra sample material (if available) is routinely requested.

Samples are oven dried, weighed, crushed to -5 mm, with a rotary split 1 kg then pulverized to -100 micron and a final 100 g split passed to assay preparation (Figure 7-3).

A 3 g sample measured by electronic scale is submitted using LODIL protocol with high grade samples (0.75 g) rerun using PEAKA protocol.

As far as can be determined since 2006, all samples have been assayed by XRF for a consistent 36 elements at either the Wodgina or Greenbushes laboratory.


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Source: Dolbear, 2012

Figure 7-3: GAM Sample Preparation Flow Sheet.


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7.2.3Drilling Results and Interpretation

Individual drilling results are not presented herein in tabulated format. Extensive drilling exists across the property. Summary Mineral Resources are disclosed, which represent the overall deposit interpretation and are entirely informed on the basis of the drilling.

Source: SRK, 2021

Figure 7-4: Eastward Looking Longitudinal Section of the Cassiterite Deposit Showing Classification.

7.3Hydrogeology

SRK has summarized the current perspective on hydrogeology from MRL’s provided reports on the Wodgina area.

The Wodgina area is a fractured rock environment, with groundwater resources being associated with bedrock aquifers including major fault systems, fractured rocks and well-developed weathering profiles (Burton, 2018).

Zones of brittle deformation develop enhanced porosity and permeability, and can receive, store and transmit water. Areas of relatively unfractured bedrock dominate the sub-surface and form boundaries to the water resources stored in fractured zones.

Minor aquifers also occur in localized alluvium and colluvium in drainage lines and, in some areas, may support groundwater dependent vegetation (e.g., along the Turner River). These aquifers are thin, readily drained and have limited storage capacity. they host the water table near the drainage lines and drain vertically into underlying fractured rock aquifers.

The retention of runoff water in the alluvial aquifers from intense rainfall events forms an important recharge mechanism for the fractured rock aquifers as the hydroperiod (i.e., the period of saturation) for the streams and alluvial aquifers is likely to directly affect the quantity of recharge available to the fractured rock aquifer (Burton, 2018).


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Borefields used for water supply at Wodgina target fractured quartz veins (Old and North borefields) and contact zones between ultramafics, quartzites and conglomerate (Breccia borefield) (Burton, 2018). All three borefields develop fractured rock aquifers and the most reliably and higher yielding bores are associated with deeper fractured zone intersections (Burton, 2018).

Various hydrogeological studies and groundwater monitoring have been undertaken in the Wodgina area over the past two decades:

Hydrogeological studies to date have focused on the identification and management of either: (a) groundwater resources to support mining operations; or (b) groundwater levels to inform decisions on potential dewatering of iron ore deposits.

Groundwater monitoring has been undertaken in accordance with Western Australian Department of Water and Environmental Regulation (DWER) license conditions e.g., TSFs (most recently TSF3), the eastern waste landform (EWL), borefields (Old, North and Breccia) and the wastewater treatment plant.

Depth to groundwater varies considerably across the Wodgina area as a result of major faulting and fractured rock aquifers being interspersed with impermeable bedrock. This is evidenced by recent exploration drilling undertaken by MARBL within and adjacent to Cassiterite Pit.

The locations of holes where water was recorded during recent drilling activities are shown in Figure 7-5.


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Source: MRL, 2018

Figure 7-5: Drillhole Locations of Noted Groundwater


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Five of these holes (WLRC0002, WLRC0003, WLRC00010, WLRC00011, WLRC00016) shown in Figure 7-5, are located within the active mining area, and the recorded depth to water varies from 3 to 142 meters below ground level (mBGL). This places the water table elevation between 197 mAHD and 93.5 mAHD.

Two of these holes (WRLC0081, WRLC0060) are located to the northeast of the active mining area, and the recorded depths of water in these holes are 70 mBGL and 254 mBGL, respectively. These holes are 200 m apart with water table elevations varying between 200 mAHD and 35m AHD.

The current pit floor elevation of Cassiterite Pit is 140 mAHD. The pit floor is dry except for a small area of water accumulation at the eastern end of the pit floor. Where groundwater has been found in the pit, the relatively minor quantities of water are easily removed by the installation of a sump and pumping of water ex-pit. Currently this water is stored in the Tinstone pit where it is evaporated.

To the southwest of Cassiterite Pit, Tinstone and South Tinstone pits contain pit lakes that are understood to be associated with interflow rather than groundwater inflow (AECOM, 2011). The bases of these two pits are both approximately 210 mAHD.

To the north of TSF3, data from monitoring bores indicates that the water table occurs at approximately 13 m below ground level. The corresponding water table elevation in this area is approximately 217 mAHD.

Groundwater monitoring is undertaken at Wodgina in association with the borefields, TSFs, EWL, and wastewater treatment plant (WWTP).

A series of monitoring bores were previously installed around the toe of the Eastern Waste Landform. These monitoring bores, similarly, to the TSF bores, require monthly reporting on water levels and quarterly reporting on ambient groundwater quality, and will continue to be monitored for any analytical signs that acid production is occurring within the waste landform.

Groundwater data for the EWL monitoring bores is only in its infancy for WLPL, monitoring has only taken place since September 2017. Locations of groundwater monitoring bores are shown in Figure 7-6.


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Source: MRL, 2018

Figure 7-6: Groundwater Monitoring Locations.


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7.4Geotechnical Data, Testing and Analysis

As the majority of drilling at Wodgina is conducted using RC methods, geotechnical data and analyses have been primarily conducted based on the existing open pit via pit mapping and observations by third party consultants. Two geotechnical drillholes have been completed: DGET0604 and -0605 in the Mt. Cassiterite pit though their positions are considered sub-optimal for rock mass conditions and intersecting major structures. Numerous geotechnical mapping and structural data collection campaigns haven been completed in the 2000s. Data collected and utilized in pit design analyses include stereo plot and pit structural data.

Pells Sullivan Meynink (PSM), engineering consultants out of West Perth, WA have provided a recent geotechnical review which is summarized in this section. The PSM report summarized observations from pit inspections including key pit hazards as illustrated in Figure 7-7.

SRK notes all geotechnical data is based on pit mapping with no drilling, analytical or laboratory tests due to the general use of RC drilling methods on the property.

Source: PSM, 2017

Figure 7-7: Pit Geotechnical Hazards

7.5Property Plan View

The plan view of the property is presented in Figure 7-8. This figure illustrates the Property topography and locations of drillholes.


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Source: SRK, 2020

Figure 7-8: Plan Map of the Wodgina Property Showing All Drillhole Traces

7.6Exploration Target

Exploration potential exists withing the Wodgina deposit as defined. These have been drill-tested as previously described. SRK is not aware of additional exploration targets that are relevant to the Wodgina deposit.


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8Sample Preparation, Analysis and Security

8.1Sample Preparation, Assaying and Analytical Procedures

Sample preparation is completed at the Wodgina site. RC drill chips were dried at 100°C. All samples below approximately 4 kg were totally pulverised in LM5’s to nominally 85% passing a 75 μm screen. Samples generated above 4 kg were crushed to less than 6 mm and riffle split first prior to pulverization. Samples are then dried at 105°C, crushing and splitting through a riffle splitter for samples greater than 2.5 kg. In this case, samples are all approximately 200 g, so samples are simply sorted, dried, and pulverized to P80 at 75 µm.

Analytical testing is performed using a combination of inductively coupled plasma (ICP) and X-ray fluorescence (XRF) by Nagrom Laboratories of Kelmscott, WA. Nagrom Labs is an independent laboratory with no affiliation with the Wodgina property or MARBL Table 8-1 below presents analyzed elements, units, and detection limits.

Table 8-1: Elements, Units and Detection Limits for Analyses Conducted by NAGROM Laboratory


Element	Method	Units	Detection Limit
Li2O	ICP005	ppm	10
Al2O3	XRF007	%	0.001
CaO	XRF007	%	0.001
Cr2O3	XRF007	%	0.001
Fe	XRF007	%	0.001
K2O	XRF007	%	0.001
MgO	XRF007	%	0.001
MnO	XRF007	%	0.001
Na2O	XRF007	%	0.001
P	XRF007	%	0.001
S	XRF007	%	0.001
SiO2	XRF007	%	0.001
TiO2	XRF007	%	0.001
V2O5	XRF007	%	0.001
Ta2O5	XRF007	%	0.001
Nb2O5	XRF007	%	0.001
Sn	XRF007	%	0.001
LOI1000	TGA002	%	0.01
Rb	ICP005	ppm	1
Cs	ICP005	ppm	1

Source: MRL, 2018

Lithium had not been analyzed for the Wodgina site prior to 2016, as the operation was previously focused on the production of tantalum. The majority of Li2O data that is used in the Mineral Resource calculation has been obtained from the re-assay of historic pulps supplemented with RC and DDH drilling in 2018. SRK notes the potential for sample degradation of historic pulps. Despite this risk, any hydration or alteration of pulps is considered minimal due to the pulps being stored in watertight sea containers onsite. SRK has not inspected the sample storage or monitored the sample submission process.


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The site is security-controlled by MRL with all samples stored on-site. Digital data is maintained by MRL.

8.2Quality Control Procedures/Quality Assurance

Field duplicates from RC drilling were collected from the second sample port of the cone splitter, for diamond tails another half of the sampled core was used, at a rate of 1:20; (sample numbers ending in 00, 20, 40, 60, and 80 were assigned as duplicates) however, only field duplicates within the interval determined to be sampled at 1 m intervals (nominally the pegmatite intersection plus 2 m either side) were submitted for assaying. The vast majority of field duplicates, which were assayed, are from within the pegmatite intervals. Certified standard samples were inserted for RC/DDH by the supervising geologist at the rate of two standards per 100 samples (2%). SRK notes duplicates are inserted at a frequency consistent with industry standards while insertion of CRMs is considered well below acceptable QC standards along with no blanks used as part of the overall QA/QC program.

Widenbar (2018) described the QA/QC program as follows:

The original RC pulps were subject to stringent QA/QC and laboratory preparation procedures and are considered reliable for the purposes for which they are being used.

Two standards were initially submitted at the rate of approximately 1 in 11 samples, and internal laboratory repeats, and splits have been assayed at a rate of 1 in 10. Recent MRL QA/QC protocols used for the RC drill samples included the insertion of one of three types of CRMs at an incidence of 1 in 36, and the repeat analysis of field duplicate samples at an incidence of 1 in 20. Lab protocols included duplicate analysis at an incidence of 1 in 20 and pulp repeat analysis at an incidence of 1 in 20.

Five CRM standards were utilized as part of the QC program in 2018. Performance charts are provided for key elements. CRM performance varied summarized at:

•High grade AMISO339 showed a high bias for Li2O (%) and minor increasing trend for Fe2O3 from analyses

•Moderate grade AMISO340 showed a low bias for Li2O (%) and high bias for Fe2O3 (%) from analyses


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Source: MRL, 2021

Figure 8-1: CRM AMISO339 Control Performance Chart - Li2O (%)


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Source: MRL, 2021

Figure 8-2: CRM AMISO340 Control Performance Chart - Li2O (%)


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Source: MRL, 2021

Figure 8-3: CRM AMISO343 Control Performance Chart - Li2O (%)

Prior to MARBL taking ownership of the property in 2016, all analyses and QC were conducted using a combination of the Wodgina and Greenbushes laboratories with QC samples incorporating standards, repeats, duplicates and split samples but no blanks. One in twenty samples are riffle split in the laboratory and a split created which is analyzed along with the original sample.

As an extension of the quality control procedures, when operational, the Wodgina laboratory periodically participate in "round robin" exercises whereby samples are randomly selected and assayed by the Wodgina laboratory, Greenbushes laboratory and one or two other commercial laboratories. The results from each laboratory are compiled and compared.

SRK notes that QA/QC documentation does not exist prior to 2013. Therefore, all analytical data obtained prior to 2013 is considered to have a lower confidence due to the inability to track, manage, and mitigate potential issues and errors associated with preparation and analysis.

8.3Opinion on Adequacy

It is the opinion of SRK that, based on documentation, the original sampling was performed in a reasonable manner consistent with industry standards. The analytical data that forms the basis of the Mineral Resource was primarily sourced from sample rejects collected during tin/tantalum exploration drilling across the property, further supported by focused lithium drilling in 2018. Based on a review of the data and historic documentation, it is the opinion of SRK that the fundamental data is adequate for the reporting of Mineral Resources with the various factors related to data confidence being considered during classification.


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It is SRK’s opinion that utilizing historic metallurgical recovery data (as discussed in Section 10) from production is adequate for the disclosure of Mineral Resources in the Mt. Cassiterite area. However, the lack of metallurgical testing, mineralogy, and analyses on the property increases the risk of predictive recovery which is key for Mineral Reserve estimation. Further work is required before confidence in this modifying factor is adequate for disclosure of Mineral Reserves.

8.4Non-Conventional Industry Practice

The analytical data for the assessment of the Wodgina property’s Mineral Resources does not include any non-conventional testing. All analyses were performed using industry standard procedures and testing by a combination of independent laboratory for Li2O and an internal + external labs for historic data.


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9Data Verification

9.1Data Verification Procedures

SRK performed a variety of data validation and verification procedures to assess the quality of underlying data associated with the Wodgina property. Procedures include:

•Check of database against assay certificates

•Visual validation of logging and analytical data in relation to historic models

•Statistical validation of analytical data

9.2Limitations

SRK reviewed 37,534 unique samples from laboratory assay certificates from MRL during August 2020 for comparison to the drillhole database. The following items represent findings from the validation of all received assay certificates.

•There are 34,552 unique samples in the drillhole assay database compared to 37,534 in the laboratory certificates. The discrepancy is due to drilling data outside the Mt. Cassiterite block model area of interest.

•SRK was able to successfully match 28,640 assay certificates to the drillhole assay database.

•5,912 samples in the drillhole assay database do not have certificates.

•Each sample in the assay database has 18 values (columns or elements) resulting in a total of 515,520 (18 x 28,640) possible value matches between the certificate files and the assay database. SRK was able to match 513,363 values between the certificate files representing an error rate of 0.4%.

•No collar or downhole survey verification was conducted.

•No independent duplicate analytical work was conducted.

SRK notes use of historic drilling data in the Mineral Resource calculation which contain a variety of uncertainties. These related to a lack of QA/QC on historic analytical data, lack of collar and downhole survey on historic drilling, a variety of logging, and a historic lack of focus on Li2O requiring pulp re-assay for a portion of the database.

9.3Opinion on Data Adequacy

It is SRK’s opinion that the database is acceptable for use in determining Mineral Resources with the variety of identified potential concerns being accounted for in resource classification. Further recommendations on future drilling and analyses are presented in section 23 under Recommendations.


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10Mineral Processing and Metallurgical Testing

There are limited metallurgical analyses from drilling in the Mt. Cassiterite pit and there is no data in the North Hill area of the Wodgina property. SRK notes that MARBL operated the Mt. Cassiterite pit for lithium production from 2016 through 2019 thus demonstrating metallurgical recovery from mining areas. For the purposes of this report, a 65% metallurgical recovery has been applied based on historic processing averages from mining in the Mt. Cassiterite pit (pers. comm, MRL, 2020).

The lack of mineral processing and metallurgical testing in the North Hill area is accounted for in Mineral Resource classification. There is no metallurgical testing from samples obtained from the TSF, and SRK has not conducted a MRE for this disclosure. MRL has previously disclosed mineral resources for the TSF in their JORC code disclosure.

It is SRK’s opinion that utilizing historic metallurgical recovery data from production is adequate for the disclosure of Mineral Resources in the Mt. Cassiterite area. However, the lack of metallurgical testing, mineralogy, and analyses on the property increases the risk of predictive recovery, which is key for Mineral Reserve estimation. Further work is required before confidence in this modifying factor is adequate for disclosure of Mineral Reserves.


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11Mineral Resource Estimates

11.1Geological Modelling

SRK completed an updated geological model based on general lithology and structural data obtained from MARBL in September 2020, supplemented with publicly available reports and maps. The previous geological model was completed by Widenbar & Associates in October 2018 (Widenbar, 2018) and included 3D wireframe modeling of pegmatite based on drilling interpretation and historic sheet-like dike assumptions.

The 2020 SRK geological model incorporated regional and local lithology with historic structural mapping to provide an updated interpretation of the pegmatite geometry and include pegmatite dike host lithology which is believed to materially affect the mineralogy, chemistry, and rheology of the dikes. The MARBL-provided drilling database was reviewed with logging codes grouped into broad lithotypes for modeling purposes. The large variety of recent and historic drilling was grouped into the following lithology codes:

•Overburden and fill material

•TSF – tailings storage facility fills from historic processing

•Saprolite

•Mafic dikes

•Pegmatite dike

•Metasedimentary units

•Schist

•Mafic volcanics

•Banded iron formation (BIF)

•Granitoid intrusives

SRK noted that historic drilling and logging showed inconsistency in both codes and interpretation requiring the broad grouping of lithotypes. SRK grouped logging codes based on documentation to provide a reasonable basis for 3D modeling, but it is possible that these could be refined or reinterpreted. It is SRK’s opinion that additional work should be performed to improve the lithotype grouping and domaining that may require re-interpretation of historic logging.

Using Leapfrog Geo software, the grouped lithologies were modeled in 3D accounting for mapped regional faulting and folding. The interpretation is primarily based on regional and local geological mapping by the GSWA and internal documents of previous operators. Multiple fault-bound geological sub-models were generated incorporating the Tinstone Pit, Mt. Cassiterite Pit, and North Hill areas due to the distinct individual nature of rock types and structural boundaries. A plan view of the lithostratigraphic model is shown in Figure 11-1.


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Source: SRK, 2020

Figure 11-1: Plan View Map of the Wodgina Lithology Model (Overburden and Fill Removed)

11.2Adequacy of Data and Non-Conventional Industry Practice

11.2.1Structural Interpretation and Modeling

The structural interpretation of the Wodgina area was updated as part of the 2020 modelling process due to a general lack of structural modeling in previous work. Historically, a shallowly dipping pegmatite swarm was interpreted in the Mt. Cassiterite area based on limited historic pit mapping. Reviewing historic GSWA mapping (Figure 11-2), the presence of drag folding, thrust faulting, and the regional synclinal form was largely ignored in this interpretation. Therefore, an updated conceptual model (Figure 11-3) was required to account for local in-pit complexity, offsetting mapped dikes, and the changing geometry of dikes hosted within the schist domain of North Hill compared to the metasedimentary host observed in the Mt. Cassiterite Pit. Based on the various data provided by


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MARBL and public information, SRK generated an updated structural interpretation (Figure 11-4) for use in the 2020 geological model update. A simplified cross section from NNE to SSW (Figure 11-5) shows how the nature of pegmatite emplacement and geometry is affected based on host lithology between the North Hill area and the Mt. Cassiterite pit.

Source: Blockely, 1980 – annotated by SRK, 2020

Figure 11-2: Regional Structural Geology Interpretation


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Source: SRK, 2020

Figure 11-3: Schematic Structural Cross Section in the Wodgina Area


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Source: SRK, 2020

Figure 11-4: Mt. Cassiterite Pit Structural Interpretation


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Source: SRK, 2020

Figure 11-5: Cross Section of Wodgina Geological Model


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SRK modeled the pegmatite dike domains as separate volumes based on geological interpretations and the differing nature of the pegmatite geometry between the metasedimentary and schist hosted dikes. The differences between the metasedimentary and schist hosted includes the following observations:

•Thin and consistently high Li2O grades within metasedimentary hosted dikes compared to thicker and more variable Li2O grades in schist-hosted dikes.

•Variable chemistries noted in the pegmatites between the two host rocks.

The differences in chemical variability are illustrated in Figure 11-6. Reviewing key elements of Li, Fe, Ta, and Sn show material differences in mean and population distributions suggesting chemical interaction and influence of the host rocks in relation to the pegmatite dyke chemistry. SRK notes that traditional trace chemistry used for pegmatite characterization include Be, Cs, and Rb are absent from the MARBL database.

Source: SRK, 2020

Figure 11-6: Differing Elemental Behavior between the Mt. Cassiterite and North Hill Areas

11.3Key Assumptions, Parameters, and Methods Used

The Key assumptions, parameters and methods used to estimate the quality and quantity of Mineral Resources are outlined in the following sections. SRK utilized industry standard techniques including data compositing, reviewed the potential for capping of high yield samples, performed exploratory data analysis (EDA) including determining spatial continuity of key economic variables to provide insight into search and estimation parameters.


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11.3.1Compositing

A composite length analysis (CLA) was performed to evaluate implications for various compositing methods and lengths. Due to the mean and median sample length for RC and DDH being approximately 1 m, a 1 m composite using run-length methodology was selected. Composited samples were broken by major lithology including the two dominant pegmatite domains of PEG_schist and PEG_metased. Figure 11-7 shows original and composited data lengths.

Source: SRK, 2020

Figure 11-7: Histograms of (L) Log Raw Sample Length and (R) Composite Length

11.3.2Capping

A high yield capping analysis was performed on Li2O values within intervals logged as pegmatite. Though minor lithium-bearing minerals are known to be present in the host rock as an alteration halo associated with the emplaced pegmatite dikes, the mineralogy is unknown, and from personal communications with Albemarle staff familiar with the deposit, these altered zones do not contain mineralization of interest. Therefore, no other domains of potential lithium-bearing minerals were analyzed for capping.

With the logged pegmatite units, SRK reviewed potential capping in both the PEG_metased and PEG_schist domains to understand potential differences in high-yield or outlier values. Both domains appear equivalent in regard to potential outliers with the highest composited pegmatite lithium values being 6.19%. The highest yield values between 5.1 and 6.19% Li2O have been capped at 5.1% Li2O to reduce the influence for these high-yield samples. High yield caps applied by domain are shown in Table 11-2.


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Source: SRK, 2020

Figure 11-8: Log Probability for Li2O in Pegmatites

11.3.3Exploratory Data Analysis

EDA was calculated for the major mineralized domains and for primary and secondary variables with economic interest. Summary descriptive statistics were calculated by domain including a variety of graphics including box & whisker plots, histograms, and bivariate statistics.


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Table 11-1: Summary Descriptive Statistics by Logged Lithology Type

Source: SRK, 2020


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Source: SRK, 2020

Figure 11-9: Box and Whisker Plots for Li2O for (L) all Lithologies and (R) Pegmatite Domains


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Source: SRK, 2020

Figure 11-10: Histogram of Li2O Distribution for (L) Schist-Hosted and (R) Metasediment-Hosted Pegmatites

11.3.4Spatial Continuity

The spatial continuity was determined by calculating semi-variograms for key economic variables by domain. Variograms were calculated per domain for the metasedimentary and schist domains which contain the majority of Li2O mineralization on the property. The west mafic volcanic block utilized the spatial continuity data from the schist domain while Tinstone domain used variography from the metasedimentary domain. These two domains are deemed of secondary importance and contain limited data to generate reliable variograms.

The following figures provide the modeled variography for Li2O and Fe as the primary economic variables in the Wodgina deposit.


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Source: SRK, 2020

Figure 11-11: Modelled Semi-Variogram for Li2O in the Metasedimentary Domain

Source: SRK, 2020

Figure 11-12: Modelled Semi-Variogram for Li2O in the Schist Domain


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Source: SRK, 2020

Figure 11-13: Modelled Semi-Variogram for Fe in the Metasedimentary Domain

Source: SRK, 2020

Figure 11-14: Modelled Semi-Variogram for Fe in the Schist Domain

The interpretations of spatial continuity between the two major domains show similar nugget effects but materially different ranges for Li2O between the two separate host rock types of the pegmatite dykes. The metasedimentary hosted pegmatites show longer ranges with more gradual variance when compared to the schist-hosted pegmatites in the North Hill area.

Iron variability shows similar yet inverse ranges in pegmatites hosted in the two primary rock types. In the metasedimentary hosted pegmatites of the Mount Cassiterite area show near omni-directional behavior with relatively short ranges of continuity while Fe in the schist-hosted pegmatites of the North Hill area show materially longer ranges of continuity. The Fe nugget effect in the schist domain is relatively higher compared to the metasedimentary-hosted pegmatites.


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11.3.5Estimation and Search Neighborhood

Resource estimation was performed in Leapfrog Geo and Maptek’s Vulcan software. Grade interpolation is based on hard boundaries within the pegmatite lithology broken down into two separate domains based on host lithology type. Estimation methodology is a combination of Ordinary Kriging (OK) and inverse distance weighting (IDW). Additionally, a nearest neighbor (NN) estimate was performed for validation purposes only.

A multi-pass method of estimation was utilized to aid in classification determination with each pass increasing the search size while reducing the limitations on number of samples and drillholes. The result has each block coded by which pass was used for estimation thus aiding in visualizing block volumes of increased confidence in the first and second passes compared to the larger and more relaxed criteria of the third pass.

The search neighborhood was selected based on modeled variogram interpretations, iterative processes of search criteria variation, and the resulting output OK quality estimates for Kriging efficiency (KE) and slope of regression (SoR).


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Table 11-2: Variography Parameters for the 2020 Resource Block Model.


Variable	Domain	Pass	Variable Orientation	Estimation Method	Ellipsoid			Samples			Octants	Outlier Restrictions	Block Discretization
					Major	Semi-Major	Minor	Min	Max	Max per DH
Li2O	Metased	1	yes	OK	80	70	20	4	10	3	No	None	5,5,5
Li2O	Metased	2	yes	OK	150	150	40	3	10	2	No	None	5,5,5
Li2O	Metased	3	yes	IDW2	300	300	50	3	8	2	No	None	5,5,5
Li2O	Schist	1	yes	OK	100	100	20	4	10	3	No	5.1	5,5,5
Li2O	Schist	2	yes	OK	175	175	40	3	10	2	No	5.1	5,5,5
Li2O	Schist	3	yes	IDW2	300	300	50	3	10	2	No	None	5,5,5
Li2O	Tinstone	1	yes	OK	100	100	20	4	10	2	No	None	5,5,5
Li2O	Tinstone	2	yes	OK	200	200	40	3	10	2	No	None	5,5,5
Li2O	Tinstone	3	no	OK	300	300	60	3	8	2	No	None	5,5,5
Li2O	West Mafic	1	yes	OK	100	100	20	4	10	3	No	5.1	5,5,5
Li2O	West Mafic	2	yes	OK	175	175	40	3	10	2	No	5.1	5,5,5
Li2O	West Mafic	3	yes	IDW2	300	300	50	3	8	2	No	None	5,5,5

Source: SRK, 2020


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Secondary elements were estimated in the pegmatite domain but not used for the economic evaluation of the project. These secondary elements include: As, K2O, Na2O, S, and Ta2O5. Though not directly utilized for Mineral Resource determination, these elements may be considered useful for other aspects of the Wodgina operation.

Each secondary element was estimated using composited drilling data in the same manner as Li2O and Fe. Estimation was into the hard domain of pegmatite by host lithology. The estimation criteria for each secondary element are the same:

•IDW squared was used as the estimation method

•A search ellipsoid of 300 m by 300 m by 75 m was used

•A minimum of four samples and a maximum of eight samples with a maximum of two composites per drillhole was used

•SRK used variable anisotropy based on the same pegmatite sub-domain as Li2O and Fe

Bulk density was coded into the resource block model based on host lithology of the domain. Table 11-3 provides the bulk density value assigned to each lithology.

Table 11-3: Assigned Bulk Density in Resource Block Model


Lithology Type	Sub-Domain	Bulk Density
pegmatite	Mt. Cassiterite area	2.73
pegmatite	North Hill area	2.80
pegmatite	Mafic volcanics	2.73
schist	n/a	2.96
metasediments	n/a	2.96
mafic volcanics	n/a	2.96

Source: SRK, 2021

11.4Reasonable Prospects for Economic Extraction

The CoG used is 0.5% Li2O, which is based on historic CoG assumptions.

An economic pit shell was used to constrain Mineral Resource classification. The parameters used for construction of the economic pit shell include:

•Price: US$583.85/t of 6% concentrate

•Processing and G&A Costs: US$23/t of processed mineralized material

•Mining Cost: US$2.85/t moved base mining cost (from elevation 300) and US$0.03/t moved incremental cost per 10m bench

•Mass Yield Equation: (Li2O% * met recov) / 6

◦Li2O% lithium grade

◦Metallurgical recovery = 65%

◦Concentrate grade: 6%

SRK notes that economic assumptions used in the determination of the CoG and economic pit shell are based on a combination of historic data provided by MARBL and current trends in the lithium market. A more detailed market study and contractual pricing is planned for future refinements to the economic assumptions at Wodgina.


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11.5Resource Classification and Criteria

The Mineral Resources have been classified as Indicated and Inferred based on the SEC S-K 1300 definitions for Mineral Resource classification. The following criteria were used by SRK for classification:

Indicated Mineral Resources

The criteria used to determine Indicated Mineral Resource includes:

•Pegmatite material hosted within the metasedimentary domain.

•Mean distance between drillholes is less than 100 m

•Drillholes geologically logged

•Li2O data meets minimum requirements for internal QA/QC

•Located in the historically mined Mt. Cassiterite area

•Located within the economic pit shell of 0.7% Li2O

•Above the 0.5% Li2O economic cut-off grade

Inferred Mineral Resources

The criteria used to determine Inferred Mineral Resources includes:

•Pegmatite material hosted within either the metasedimentary or schist domain

•Mean distance between drillholes is less than 100 m

•Drillholes geological logged

•Li2O data meets minimum requirements for internal QA/QC

•Located within the economic pit shell of 0.7% Li2O

•Above the 0.5% Li2O economic CoG

SRK notes the Mineral Resource classification is assigned accounting for geological understanding of the deposit, drilling data and spacing, continuity of mineralization, the general lack of metallurgical and mineralogical data, predominant use of RC drilling that may result in smearing of grades and poorly logged geology, a lack of a detailed structural model in a deposit largely controlled by structure, the nature of pulp re-assay being the primary source of lithium geochemical data, analytical quality control, and uncertainty associated with bulk density determination.

11.6Uncertainty

The Mineral Resources have been classified to account for the assessed risk and uncertainty associated with the site geology, structure, grade continuity, fundamental data, and tonnage conversion factors. SRK has identified the areas of key uncertainty as follows:

Metallurgical Recovery of Li2O from Pegmatites in the North Hill Area

Due to the general lack of mineralogical and metallurgical data in the North Hill area, there is uncertainly related to the ability to process and recover Li2O from the pegmatite dikes in this area. No historical mining or processing has occurred in North Hill. The host rock type is different from the Mt. Cassiterite area, the dikes show a different geometry, and the limited trace geochemical data show differences suggesting different mineralogy. Therefore, Mineral Resource in this area has been classified as Inferred to reflect this uncertainty.


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Lack of Detailed Structural Model

The pegmatites at the Wodgina property are largely thought to be structurally controlled, yet no structural model exists to aid in predicting dike location. Historic drilling has failed to generate sufficient structural data and therefore all current interpretations are based on regional mapping, historic pit mapping, and a generalized structural assumption. A deposit featuring structurally hosted mineralization with poor understanding of structure represents uncertainty in accurately predicting tonnages and grade on the Wodgina property. This has been a feature of previous Wodgina estimates, which incorporated limited information and made more generalized assumptions on continuity, thereby resulting in a different interpretation.

Lack of Confidence in Lithology Logging

RC drilling has largely been used to characterize the Wodgina deposit. The RC drilling method is occasionally problematic as it may dilute or smear grades when sampling if diligence is not taken during regular sampling procedures. Additionally, samples are ground chips which are notoriously difficult to log for detailed lithology and no structural information can be measured. In reviews of data, geological logging shows inconsistencies across the property. This lack of robust geological logging data and potential for sample dilution and/or smearing represents a minor risk and introduces uncertainly in fundamental data used to determine Mineral Resources.

Reliance on Historic Sample Pulps for Lithium Assays

Historically, the Wodgina property was operated for tantalum while lithium was not directly assayed. Starting in the mid-2010s, MARBL initiated a program of re-assay of historic lab rejects/pulps to gather Li2O data. It is this data that makes up the majority of analytical data for Mineral Resource. There is uncertainty as to the condition of historic pulps, potential degradation of minerals, and other items based on long-term site storage. SRK considers this risk to be relatively minor but is still accounted for in the overall assessment of uncertainly in Mineral Resources.

Complex Nature of the Deposit

Lithium-bearing pegmatite dikes at the Wodgina property are highly variable in grade, thickness, and continuity. With limited DDH drilling, poor structural understanding, and logging from RC chips, the ability to predict grades and volumes of continuous pegmatite dikes is considered challenging and uncertain. Additionally, based on historic production at the Tinstone Pit, Mt. Cassiterite Pit, and Wodgina Pits across the Wodgina property, the mineralogy and chemistry are materially different within the pegmatite dikes in each pit area suggesting the potential for material differences in pegmatite chemistry over short distances. This variability of pegmatite dike chemistry/mineralogy represents uncertainly in the deposit when detailed geological characterization is not conducted.

Lack of Robust Bulk Density Measurements

Bulk density is poorly measured across lithologies on the Wodgina site, thus resulting in uncertainly associated with tonnage determination.

Variable QA/QC from Historic Data

The majority of pre-2016 analytical data was tested at either the on-site Wodgina laboratory or the internal Greenbushes laboratory, both considered internal laboratories. Limited data is available for the preparation and internal QA/QC on analytical data during this timeframe. As this data is utilized in


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the MRE for the Wodgina Property, this represents uncertainly in sample collection, preparation and storage of this data. These historic sample pulps were used for all historic Li2O analytical data.

Lack of Metallurgical Data from the TSF Deposit

The TSF represents tailings from historic tantalum operations on the Wodgina property. These materials have been drilled and assayed for Li2O but feature no metallurgical/processing testwork. Tailings represent post-processed material that is finely ground, saturated, and typically exposed at surface for extended periods of time. The ability to recover Li2O from the TSF is not demonstrated and therefore precludes disclosure as a Mineral Resource.

11.7Multiple Commodity Resource

Lithium is the only economic material that is the focus of the Wodgina property. No other commodities are reported.

11.8Mineral Resource Statement

Mineral Resources at the Wodgina property have been determined by SRK during 2020 using the updated geological model and resource block model based on data current as of September 30, 2020. Figure 11-6 provides the summary Mineral Resource statement for the Wodgina property.

Table 11-4: Wodgina Summary Mineral Resources at End of Fiscal Year Ended December 31, 2021 SRK Consulting (U.S.), Inc.


Category	100% Tonnes (Mt)	Attributable Tonnes (Mt)	Li2O (%)	Cut-Off (% Li2O)	Mass Yield
Indicated	22.3	13.4	1.39	0.50	15.06%
Inferred	164.2	98.5	1.15	0.50	12.46%

Source: SRK, 2020

Notes:

• The Summary Mineral Resources attributable tonnes reflects Albemarle’s 60% ownership percentage in the Wodgina project.

The effective date for this Mineral Resource is September 30, 2020. All significant figures are rounded to reflect the relative accuracy of the estimates.

• Tonnages are presented as million tonnes (Mt) with lithium oxide (Li2O) grades presented as percentages.

• The Mineral Resource estimate has been classified in accordance with SEC S-K 1300 guidelines and definitions.

• The Cassiterite Deposit comprises the historically mined Mt. Cassiterite pit and undeveloped North Hill areas.

• Metallurgical recovery of lithium has been estimated on a block basis at a consistent 65% based on documentation from historical plant production.

• To demonstrate reasonable prospects for eventual economic extraction of Mineral Resources, a cut-off grade of 0.5% Li2O based on metal recoverability assumptions, long-term lithium price assumptions of US$584 per tonne (t), variable mining costs averaging $3.40/t, processing costs and G&A costs totaling $23/t.

11.9Mineral Resource Sensitivity

SRK performed quality estimates for Li2O. Comparing the 2020 to the October 2018 model shows material differences in classification, impacting the mineral resource statement comparison to previous MRL disclosure (Table 11-5). SRK notes material shifts in the nature of the estimate are related primarily to the following factors:

•SRK took the approach of modeling the geological features from a first principals approach (i.e. based on geological logging, structural information, pit mapping, etc.). The previous


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model was based on an indicator model which converted pegmatite logging to a numerical code and modeled the probability of the resulting indicator to define continuity of the pegmatites.

◦While this indicator tool has been successfully used in many other deposits to model complex geological features, SRK notes that the morphology of the resulting pegmatite model was generalized to a trend and degree of continuity which was not supported by the geological observations in the pit and in the drill core.

•SRK categorized the resource considering more than simple sample spacing and numbers of samples used in the estimate. Additional factors such as inherent local variability of grade and metallurgical recovery assumptions were also incorporated. On this basis, a significant portion of the resource was shifted to an Inferred classification.

•SRK reported the mineral resource internal to an optimized pit shell using economic and technical parameters assumed based on previous studies or operational data. The previous resource was not reported within a pit shell.

Table 11-5: Summary Mineral Resource Comparison Between October 2018 and September 2020 Resource Models


Oct 2018 JORC Mineral Resources (in situ)
Classification	Cutoff	Mt	Li2O (%)	Fe (%)
Indicated	0.5	177	1.2	1.6
Inferred	0.5	60	1.2	1.6
Sep 2020 SEC Mineral Resources (in situ)
Classification	Cutoff	Mt	Li2O (%)	Fe (%)
Indicated	0.5	22	1.4	2.0
Inferred	0.5	164	1.1	1.6

Note: Mineral Resources as disclosed under the code of the Joint Ore Reserve Committee (JORC), excluding TSF

Source: SRK, 2020

The Wodgina resource is sensitive to a variety of factors. To demonstrate this, SRK has prepared a grade (Li2O) vs. tonnage chart (Table 11-6). Adjusting the CoG of Li2O reflects potential impacts to economics that would require or permit higher or lower Li2O grades to compensate for changing conditions over time.


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Table 11-6: Grade x Tonnage Chart


Cut-off grade (%)	Tonnes ≥ cut-off (millions)	Average grade ≥ cut-off (%)
0.10	221.1	1.05
0.20	216.6	1.06
0.30	208.7	1.10
0.40	198.4	1.13
0.50	186.4	1.18
0.60	172.1	1.23
0.70	156.9	1.29
0.80	141.5	1.35
0.90	125.2	1.41
1.00	109.5	1.48
1.10	94.1	1.55
1.20	79.5	1.62
1.30	65.7	1.69
1.40	53.4	1.77
1.50	42.4	1.86
1.60	33.0	1.95
1.70	25.7	2.03
1.80	19.5	2.12
1.90	14.7	2.21
2.00	10.8	2.30

Note: Reported within an optimized pit shell, with all categories included.

Source: SRK, 2020

11.10Opinion on Influence for Economic Extraction

It is SRK’s opinion that all identified technical and economic uncertainly related to the Wodgina property can be improved with additional work programs by MARBL. Additional geological and metallurgical characterization is required to address multiple identified uncertainties which are outlined in the Recommendations section of this TRS.

Given the geological complexity of the site and known variability associated with pegmatite deposits, even with completed geological characterization studies, there will likely continue to be an intrinsic degree of uncertainty on the property. It SRKs opinion that this inherent uncertainty can be best managed at the short-term production scale through rigorous programs in blast hole and pit geological characterization.


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12Mineral Reserve Estimates

Mineral reserves have not been prepared for the Wodina property at this time.


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13Mining Methods

The Wodgina property is currently not operational. Preliminary plans for mining suggest the mining method will be open pit with traditional drill-blast-shovel-haul operation.


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14Processing and Recovery Methods

The project is currently at an IA level, no details are provided on assumed processing and recovery. It is SRK’s opinion that utilizing historic metallurgical recovery data from production is adequate for the disclosure of Mineral Resources in the Mt. Cassiterite area. However, the lack of metallurgical testing, mineralogy, and analyses on the property increases the risk of predictive recovery, which is key for Mineral Reserve estimation. Further work is required before confidence in this modifying factor is adequate for disclosure of Mineral Reserves.


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15Infrastructure

The Property hosts a variety of historic infrastructure from previous mining operations. The following information outlines a high-level summary of site infrastructure. The site is currently in care and maintenance since operations ceased in November 2018.

Equipment, infrastructure, and assets at the Wodgina property include the following:

•Three stage crushing plant capable of sustaining 5.65 Mt/a of ore feed to the Spodumene concentration plant

•Administrative and office buildings

•750-room accommodation camp on the property

•81 km, 10-inch gas pipeline to site

•A power station containing 32 2 MW gas gensets totaling 64 MW

•Three mature and reliable water bore fields with minimal contaminant removal required

•All weather airstrip capable of landing an A320 jet aircraft

•Extension of TSF3 for future tailing storage

•The Property is accessible via sealed, all-weather roads. Roads onsite are maintained dirt roads.

15.1Power, Water and Pipelines

The Wodgina property has a dedicated 10-inch natural gas pipeline which runs from the Pilbara Energy pipeline to the property. The pipeline feeds the site power station consisting of 32 generator sets of 2 MW each for a total capacity of 64 MW. The natural gas pipeline was upgraded from a 4-inch to a 10-inch pipe in 2019.

Water is obtained from three dedicated water bore fields located on the property.

A series of monitoring bores are installed around the toe of the EWL. These monitoring bores require monthly reporting on water levels and quarterly reporting on ambient groundwater quality and will continue to be monitored for any analytical signs that acid production is occurring within the waste landform.

Groundwater data for the EWL monitoring bores is only in its infancy for WLPL, monitoring was conducted from September 2017 through closure of the operation in November 2019. Data collected for these bores in the last year of operation has been compared against ANZECC livestock drinking water guideline, the only exceedance reported was for TDS, which is consistent with the natural variation in the area.


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16Market Studies

There is currently no market study on the Property.


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17Environmental Studies, Permitting, and Plans, Negotiations, or Agreements with Local Individuals or Groups

The property is at an IA level, no environmental studies, permits or details are available.


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18Capital and Operating Costs

The property is at an IA level, no capital or operating cost estimates are available.


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19Economic Analysis

The property is at an IA level, no economic analyses are available.


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20Adjacent Properties

The Wodgina property is adjacent to several historic and current mining operations exploited for a variety of elements and commodities. These include properties which have been previously exploited for iron ore and tantalum.

Source: SRK, 2021

Figure 20-1: Adjacent Mining to the Wodgina Property


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21Other Relevant Data and Information

The Wodgina property is currently in care and maintenance by MARBL. The site infrastructure is maintained adequately based on communications with the registrant and future mining operations are able to commence in the Mt. Cassiterite Pit with minimal start-up required.


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22Interpretation and Conclusions

Summary interpretations and conclusions by SRK include:

•The Wodgina property represents a large spodumene pegmatite deposit with existing infrastructure that has been placed in care and maintenance by the registrant.

•The geology of the site is complex with documented uncertainty related to interpretated lithology, structure, and pegmatite characterization across the property.

•The North Hill area represents a relatively large tonnage and moderate grade resource with potential for future development, but is currently poorly characterized with no metallurgical, mineralogical, structural, or detailed geological characterization completed.

•Historic mine planning has been performed on outdated geological and structural interpretation for the property.

•There is insufficient metallurgical testing to support disclosure of Mineral Resources in the TSF.

Material risks and uncertainties associated with the Wodgina property are disclosed in detail in section 11.7. These uncertainties directly affect confidence in the stated Mineral Resources. SRK notes that there have been significant adjustments to the publicly disclosed MREs on the basis of revisions to the geological model, the assessment of reasonable potential for eventual economic extraction, and uncertainty addressed through amended classification.


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23Recommendations

23.1Recommended Work Programs

Based on the documented uncertainties associated with the geology and metallurgical recovery, SRK recommends the following work programs:

•Diamond drilling across the North Hill and Mt. Cassiterite deposits including detailed structural measurements, mineralogy, and geochemical assay.

•Detailed mineralogical and metallurgical testing program focused on the North Hill area to confirm recovery assumptions.

•Detailed structural measurements compiled into a 3D structural model of the property to aid in interpretation.

•Re-logging of historic drilling for improved geological data confidence.

•Determination and modeling of potentially deleterious materials including Fe and sulphides.

•Updated geological modeling, resource estimation, and reporting of updated Mineral Resources accounting for all findings from drilling and other studies.

•Updated economic assumptions and input parameters for CoG determination and an economic pit shell update.

•Conduct metallurgical testwork of tailings materials to ensure recoverability and inform process plant design.

•Conduct testing or commence twin drilling of previous holes to demonstrate the reliability of the historic pulp data supporting the Li assays.

•The project should advance to PFS levels of development with accompanying technical study of relevant modifying factors of the mineral resource.

SRK notes that MARBL is currently planning an extensive drilling program to address some of these issues on the Wodgina property. Ongoing drilling and technical study should be considered mandatory for future Wodgina project development.


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24References

Department of Mines and Petroleum (DMP), 2021, Government of Western Australia – Dept. of Mines and Petroleum – Tenement and land database. Digital download on 11 May 2021 at https://geoview.dmp.wa.gov.au/geoview/?Viewer=GeoView.

Department of Primary Industries and Regional Development (DPIRG), 2021. Government of Western Australia, information obtained from website: https://www.wa.gov.au/organisation/department-of-primary-industries-and-regional-development.

Geological Survey of Western Australia (GSWA), 2001, Wodgina Geological Mapping at 1:100,000, Geological Survey of Western Australia, Sheet 2655.

Global Advanced Metals, 2010, Wodgina Mineral Resource Estimate – December 2010, Wodgina Tantalum Operations. Internal GAM company report, December 2010, report by G. Oakley and the Quantitative Group.

Huston, D.L., Blewett, R.S., Sweetapple, M., Brauhart, C., Cornelius, H, and Collins, P.L., 2001, Metallogenesis of the North Pilbara Granite-Greenstones, Western Australia – A Field Guide. 4th International Archaean Symposium, Geological Survey of Western Australia, Record 2001/11..

MARBL, 2021, MARBL Lithium Operations – License Amendment Supporting Documentation, prepared under Part V of the Environmental Protection Act 1986. Report Reference: ENV-TS-RP-0338, dated 15 November 2021.

Mineral Resources Ltd., 2019, Wodgina Lithium Project, Wodgina Resource Development Drilling Report, May-August 2018. Internal MRL company report, February 2019, report by D. Wojciecheowicz.

Sons of Gwalia, 2007, Mt. Cassiterite Resource Estimate – January 2007, Wodgina Tantalum Operations. Internal SOG company report, March 2007, report by C. Arthur.

Sweetapple, M.T., 2000, Characteristics of Sn-Ta-Be-Li-Industrial Mineral Deposits of the Archaean Pilbara Craton, Western Australia. Geoscience Australia, Australian Geological Survey Organization Record 2000/44,

Widenbar and Associates., 2018, Wodgina Pegmatites Resource Estimate, October 2018. Report prepared for MRL.


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25Reliance on Information Provided by the Registrant

SRK’s opinion contained within this Technical Report Summary is based upon data and communications provided by the registrant which was validated and deemed appropriate for use. SRK did not collect or analyze any information as part of this TRS but relied entirely on historical records, documentation, and data as provided. SRK used it’s expertise and experience to determine if public, historic, and provided data was suitable for inclusion in this TRS and made unique interpretations based on this information.

SRK is reliant upon the registrant for all items related to the legality of mineral rights, claims, and approval to mine on the property. SRK are not legal experts and therefore relied entirely on information provided by the registrant to be current and accurate. Additionally, all items disclosed in this TRS related to encumbrances, royalties, or other agreements have been directly provided by the registrant and not validated by SRK.

Table 25-1: Reliance on Information Provided by the Registrant


Category	Report Item/ Portion	Portion of Technical Report Summary	Disclose why the Qualified Person considers it reasonable to rely upon the registrant
Legal Opinion	(Sub-Chapters 3.3 through 3.7: Mineral Title, Claim, Mineral Rights, Lease, or Option Disclosure	Chapter 3	The registrant provided documentation summarizing the legal access and rights associated with all leased surface and mineral rights for the property. This information was reviewed by the registrant’s legal representatives. The Qualified Person is not qualified to offer a legal perspective on MARBL’s surface and title rights but has summarziaed this document and has had the registrant’s peronnel review and confirm statements contained herein.


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Signature Page

This report titled “SEC Technical Report Summary, Initial Assessment, Wodgina, Western Australia" with an effective date of September 30, 2020, was prepared and signed by:

SRK Consulting (U.S.) Inc. (Signed) SRK Consulting (U.S.) Inc.

Dated at Denver, Colorado

December 16, 2022


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Exhibit 96.3


SEC Technical Report Summary Pre-Feasibility Study Salar de Atacama Región II, Chile Effective Date: August 31, 2021 Report Date: January 28, 2022 Amended Date: December 16, 2022
Report Prepared for Albemarle Corporation 4350 Congress Street Suite 700 Charlotte, North Carolina 28209
Report Prepared by SRK Consulting (U.S.), Inc. 1125 Seventeenth Street, Suite 600 Denver, CO 80202 SRK Project Number: 515800.040

SRK Consulting (U.S.), Inc.


SEC Technical Report Summary – Salar de Atacama			Page ii

Table of Contents


1 Executive Summary			16
1.1 Property Description and Ownership			16
1.2 Geology and Mineralization			17
1.3 Mineral Resource			17
1.4 Mining Methods and Mineral Reserve Estimates			21
1.5 Mineral Processing and Metallurgical Testing			24
1.6 Infrastructure			25
1.7 Environmental, Social, and Closure			25
1.8 Capital and Operating Costs			27
1.9 Economics			28
1.10 Recommendations and Conclusions			29
1.10.1 Geology			29
1.10.2 Mineral Resource Estimate			29
1.10.3 Mineral Reserves			29
1.10.4 Infrastructure			30
1.10.5 Environmental, Social, and Closure			30
1.10.6 Mineral Processing and Metallurgical Testing			31
1.10.7 Capital and Operating Costs			31
1.10.8 Economics			32
2 Introduction			33
2.1 Terms of Reference and Purpose			33
2.2 Sources of Information			33
2.3 Details of Inspection			33
2.4 Report Version Update			34
2.5 Qualified Person			34
3 Property Description			35
3.1 Property Area			35
3.2 Mineral Title			36
3.3 Royalties			39
4 Accessibility, Climate and Infrastructure			41
4.1 Infrastructure			41
5 History			44
6 Geological Setting, Mineralization, and Deposit			46
6.1 Regional, Local and Property Geology			46
6.1.1 Regional Geology			46
6.1.2 Local Geology			48
6.1.3 Property Geology			48
6.2 Mineral Deposit			51


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6.3 Stratigraphic Column and Local Geology Cross-Section			52
7 Exploration			56
7.1 Exploration Work (Other Than Drilling)			56
7.1.1 Transient Electromagnetic Survey (TEM)			57
7.1.2 Seismic Reflection			58
7.1.3 Borehole Geophysics			58
7.1.4 Nuclear Magnetic Resistance (NMR)			60
7.1.5 Significant Results and Interpretation			60
7.2 Exploration Drilling			60
7.2.1 Drilling Type and Extent			60
7.2.2 Historical Drilling			61
7.2.3 Drilling Results and Interpretation			63
7.3 Hydrogeology			64
7.3.1 2016 Campaign			64
7.3.2 2018 - 2019 Testing Campaign			67
7.3.3 Packer Testing Campaign			68
7.3.4 Pumping Test Re-Analysis by SRK in 2020			69
7.3.5 Data Summary			69
7.4 Brine Sampling			70
8 Sample Preparation, Analysis, and Security			73
8.1 Sampling Events			73
8.1.1 2018 and 2019 Campaign			73
8.1.2 Historical Sampling			75
8.2 Sample Preparation, Assaying, and Analytical Procedures			76
8.2.1 Historical Sampling			76
8.2.2 2018-2019 Campaign			76
8.3 Quality Control/Quality Assurance Procedures			82
8.3.1 Control Laboratories			82
8.3.2 Correlation Between Lithium Grades of Different Invariant Laboratories of the Sampling Type			82
8.4 Opinion on Adequacy			85
9 Data Verification			87
9.1 Data Verification Procedures			87
9.2 Limitations			88
9.3 Opinion on Data Adequacy			88
10 Mineral Processing and Metallurgical Testing			90
10.1 Salar Yield Improvement Program Testing			90
10.1.1 Bischofite Treatment Testing			90
10.1.2 Lithium-Carnallite Treatment Testing			91
10.1.3 Salar Yield Improvement Program Test Commentary			92


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11 Mineral Resource Estimates			93
11.1 Key Assumptions, Parameters, and Methods Used			93
11.1.1 Geological Model			93
11.1.2 Exploratory Data Analysis			98
11.1.3 Drainable Porosity			101
11.2 Mineral Resources Estimates			102
11.2.1 Compositing and Capping			102
11.2.2 Spatial Continuity Analysis			105
11.3 Neighborhood Analysis			106
11.3.1 Block Model			108
11.3.2 Estimation Methodology			109
11.3.3 De-Clustering			113
11.3.4 Estimate Validation			115
11.4 Cut-Off Grade Estimates			118
11.5 Resource Classification and Criteria			119
11.6 Uncertainty			120
11.7 Summary Mineral Resources			120
11.8 Recommendations and Opinion			124
12 Mineral Reserve Estimates			125
12.1 Numerical Groundwater Model			125
12.1.1 Model Domain and Grid			125
12.1.2 Flow Boundary Conditions			126
12.1.3 Hydraulic and Solute Transport Properties			133
12.1.4 Calibration and Predictive Simulations Simulated Pre-Development Conditions			136
12.1.5 Simulated Historical Operations			138
12.1.6 Predictive Simulations			147
12.2 Mineral Reserves Estimates			155
12.3 Cut-Off Grades Estimates			158
12.4 Reserves Classification and Criteria			158
12.5 Summary Mineral Reserves			159
13 Mining Methods			164
13.1 Wellfield Design			166
13.2 Production Schedule			168
14 Processing and Recovery Methods			171
14.1 Salar de Atacama Processing			172
14.1.1 Solar Evaporation			173
14.1.2 Salar Yield Improvement Program			175
14.2 La Negra Plant			176
14.2.1 Boron Removal			178


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14.2.2 Calcium and Magnesium Removal			180
14.2.3 Lithium Carbonate Precipitation and Packaging			182
14.3 Process Design Assumptions			184
14.3.1 Process Consumables			185
15 Infrastructure			187
15.1 Access, Roads, and Local Communities			187
15.1.1 Access			187
15.1.2 Airport			188
15.1.3 Rail			188
15.1.4 Port Facilities			188
15.1.5 Local Communities			189
15.2 Facilities			191
15.2.1 Salar Plant			191
15.2.2 La Negra Plant			192
15.3 Energy			193
15.3.1 Power			193
15.3.2 Natural Gas			194
15.3.3 Fuel			195
15.4 Water and Pipelines			195
16 Market Studies			197
16.1 Market Information			197
16.1.1 Lithium Market Introduction			197
16.1.2 Lithium Demand			198
16.1.3 Lithium Supply			201
16.1.4 Pricing Forecast			203
16.2 Product Sales			204
16.3 Contracts			206
16.3.1 CCHEN and CORFO Agreements			207
17 Environmental Studies, Permitting, Social Factors			210
17.1 Environmental Studies			210
17.1.1 General Background			210
17.1.2 La Negra			211
17.1.3 Salar de Atacama			213
17.1.4 Known Environmental Issues			217
17.2 Environmental Management Planning			217
17.2.1 Tailing Disposal			218
17.2.2 Waste Management			219
17.2.3 Water Management			220
17.2.4 Monitoring			221
17.2.5 Air Quality			224


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17.2.6 Human, Health and Safety			225
17.3 Project Permitting			225
17.3.1 Environmental Permits			225
17.3.2 Operating Permits			230
17.3.3 Water Rights			232
17.4 Plans, Negotiations, or Agreements			232
17.5 Mine Reclamation and Closure			232
17.5.1 Closure Planning			232
17.5.2 Closure Cost Estimate			234
17.5.3 Performance or Reclamation Bonding			235
17.5.4 Limitations on the Cost Estimate			236
17.6 Plan Adequacy			237
17.7 Local Procurement			237
18 Capital and Operating Costs			238
18.1 Capital Cost Estimates			238
18.2 Operating Cost Estimates			241
19 Economic Analysis			245
19.1 General Description			245
19.1.1 Basic Model Parameters			245
19.1.2 External Factors			245
19.1.3 Technical Factors			246
19.1.4 Results			251
19.2 Sensitivity Analysis			254
20 Adjacent Properties			256
20.1 Adjacent Production			256
20.1.1 SQM Reserves			259
20.2 Water Rights of Other Companies			259
21 Other Relevant Data and Information			263
22 Interpretation and Conclusions			264
22.1 Geology and Resources			264
22.2 Mining and Mineral Reserves			264
22.3 Metallurgy and Mineral Processing			264
22.4 Infrastructure			265
22.5 Environmental/Social/Closure			265
22.5.1 Environmental Studies			265
22.5.2 Environmental Management Planning			265
22.5.3 Environmental Monitoring			265
22.5.4 Permitting			266
22.5.5 Closure			266
22.6 Capital and Operating Costs			266
22.7 Economic Analysis			267


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23 Recommendations			268
23.1 Recommended Work Programs			268
23.1.1 Geology, Resources and Reserves			268
23.1.2 Mineral Processing and Metallurgical Testing			268
23.1.3 Environmental/Closure			269
23.2 Recommended Work Program Costs			269
24 References			270
25 Reliance on Information Provided by the Registrant			274
Signature Page			275

List of Tables


Table 1-1: Salar de Atacama Mineral Resource Estimate, Exclusive of Mineral Reserves (Effective August 31, 2021)			19
Table 1-2: Salar de Atacama Mineral Resource Estimate, Inclusive of Mineral Reserves (Effective August 31, 2021)			20
Table 1-3: Salar de Atacama Mineral Reserves, Effective August 31, 2021			22
Table 1-4: Capital Cost Forecast ($M Real 2020)			27
Table 1-5: Indicative Economic Results			28
Table 2-1: Site Visits			34
Table 3-1: OMA Mining Concessions			37
Table 3-2: Albemarle Mining Concessions			38
Table 3-3: CORFO Royalty Scheme for Albemarle in Atacama			40
Table 7-1: Summary of Exploration Work			56
Table 7-2: 2017 through 2019 Drilling Types and Meters			62
Table 7-3: Summary of Measured Hydraulic Parameters within the Albemarle Property			70
Table 7-4: Summary of Hydraulic Properties Outside of the Albemarle Property			70
Table 8-1: List and Coordinates of Production Wells Sampled for the Study			74
Table 8-2: Analytical Methods by Laboratory			78
Table 8-3: List of Samples Used for this Study			79
Table 11-1: Drainable Porosity (Sy) Raw Data - Upper Halite and Volcanic Units			102
Table 11-2: Drainable Porosity (Sy) Values Used for Other Lithological Units			102
Table 11-3: Comparison Raw vs Composite Statistics			104
Table 11-4: Modeled Omnidirectional Semi-Variogram for Lithium			106
Table 11-5: Summary Search Neighborhood Parameters for Lithium			108
Table 11-6: Summary Atacama Block Model Parameters			109
Table 11-7: Summary of Validation Statistics Composites Versus Estimation Methods (Lithium - Aquifer Data)			116
Table 11-8: Salar de Atacama Mineral Resource Estimate, Exclusive of Mineral Reserves (Effective August 31, 2021)			122
Table 11-9: Salar de Atacama Mineral Resource Estimate, Inclusive of Mineral Reserves (Effective June 30, 2020)			123


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Table 12-1: Recharge Rates and Lateral Inflows Under Natural Conditions			128
Table 12-2: Conceptual Rates of Groundwater Discharges into the Lagoon/Stream Systems			130
Table 12-3: Hydraulic Conductivity Values Used in the Numerical Model Compared with Measured Data			134
Table 12-4: Specific Yield and Effective Porosity Values Used in the Numerical Model Compared with Measured Data			135
Table 12-5: Simulated Other Solute Transport Properties			136
Table 12-6: Simulated Hydrologic Fluxes for Steady-State Conditions			137
Table 12-7: Statistics of Transient Model Calibration to Observed Water Levels, 2018 Average			141
Table 12-8: Water Balance at End of Transient Calibration (Sep 2018)			143
Table 12-9: Statistics of Transient Model Calibration to Lithium Concentrations, 2018 Average			145
Table 12-10: Average Lithium Mass Transfer Rate for Calibration Period			146
Table 12-11: Simulated Predictive Freshwater Withdrawals			150
Table 12-12: Groundwater Balance Summary			150
Table 12-13: Predicted Lithium and Brine Extractions			157
Table 12-14: Salar de Atacama Mineral Reserves, Effective August 31, 2021			160
Table 13-1: Wellfield Development Schedule			167
Table 14-1: La Negra Mass Balance			178
Table 14-2: Current Process Consumables			185
Table 15-1: Regional Community Information for the Salar Plant			190
Table 15-2: Salar Plant Electricity Consumption by Load Center			194
Table 15-3: La Negra Primary Electrical Loads			194
Table 15-4: Primary Natural Gas Loads			195
Table 16-1: Technical Grade Lithium Carbonate Specifications			205
Table 16-2: Technical Grade Lithium Chloride Specifications			205
Table 16-3: Battery Grade Lithium Carbonate Specifications			205
Table 16-4: Historic La Negra Annual Production Rates (Metric Tonnes)			206
Table 16-5: Current and Forecast La Negra Production Capacity by Product			206
Table 16-6: Historic Salar de Atacama Product Consumption			206
Table 16-7: Updated CORFO Royalty/Commission Rates			208
Table 16-8: Product Pricing Forecast			209
Table 17-1: La Negra Water Monitoring Parameters			221
Table 17-2: Salar de Atacama Environmental Monitoring Points			222
Table 17-3: Salar de Atacama Biodiversity Monitoring Plan			224
Table 17-4: Albemarle Projects in the Antofagasta Region with Environmental License			227
Table 17-5: Operational Permits for La Negra and Salar de Atacama Albemarle Facilities			230
Table 17-6: La Negra and Salar de Atacama Closure Costs1			234
Table 18-1: Capital Expenditure (Nominal US$M for 2015-2019, Real 2020 US$M for 2020/2021)			239
Table 18-2: Capital Cost Forecast ($M Real 2020)			241
Table 18-3: Historic Operating Costs ($M, Nominal)			242
Table 18-4: Key Assumptions, Variable Cost Model			243


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Table 18-5: Operating Cost Model Calibration Results ($M)			244
Table 19-1: Basic Model Parameters			245
Table 19-2: Corfo Royalty Scale			246
Table 19-3: Modeled Life of Operation Pumping Profile			247
Table 19-4: Life of Operation Processing Summary			248
Table 19-5: Operating Cost Summary			248
Table 19-6: Variable Processing Costs			250
Table 19-7: R&D Costs			250
Table 19-8: Indicative Economic Results			251
Table 19-9: Annual Cashflow			253
Table 20-1: Operational Balance of Lithium in the Salar de Atacama by SQM			259
Table 20-2: SQM Lithium Reserves Estimates			259
Table 20-3: Flows Granted According to the Nature of the Water			260
Table 20-4: Concessioned Water Rights by Water Use			262
Table 23-1: Summary of Costs for Recommended Work			269
Table 25-1: Reliance on Information Provided by the Registrant			274


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List of Figures


Figure 1-1: Total Forecast Operating Expenditure (Real 2020 Basis) (Tabular Data shown in in Table 19-9)			27
Figure 1-2: Annual Cashflow Summary (Tabular Data shown in in Table 19-9)			29
Figure 3-1: Location Map			35
Figure 3-2: Albemarle Mining Claims in the Salar de Atacama			36
Figure 3-3: Albemarle Mining Concessions			39
Figure 4-1: Property Access			43
Figure 5-1: Year 1980, First Installations			45
Figure 6-1: Regional Geology Map			47
Figure 6-2: Generalized Conceptual Geologic Plan View Along a N-S Transect			50
Figure 6-3: Generalized Conceptual Geologic Cross Sections Along a N-S Transect			51
Figure 6-4: Stratigraphic Column in Albemarle Property			53
Figure 6-5: Local Geology Plan View			54
Figure 6-6: Local Geology Cross Sections			55
Figure 7-1: Location of Exploration at the Albemarle Atacama			56
Figure 7-2: Example of Results from the Geophysical Profile TEM			57
Figure 7-3: Example of Geophysical Log in Well CLO-100			59
Figure 7-4: Map of Location of Wells Drilled During 1974 to 1979 Campaigns			62
Figure 7-5: Location Map of Reverse Circulation and Core Drilling Considered to Update the Hydrostratigraphic Model			63
Figure 7-6: Location of the Production Wells Drilled, 2013 Through 2016 Campaigns			65
Figure 7-7: Location of Observation Wells or Piezometers Drilled in the 2013 through 2016 Campaigns			66
Figure 7-8: Location Map of the Long-Term Pumping Tests: Deep Pumping Wells			67
Figure 7-9: Map of the Location of the Wells Tested by the Double Packer System (DPS)			68
Figure 7-10: Historical Sampling Points Location (1999 -2019)			71
Figure 7-11: Measured Lithium Concentration from Historical Database (1999 - 2019)			71
Figure 8-1: Production Wells Sampled			75
Figure 8-2: Historical Lithium (%) Variability (1999-2019)			76
Figure 8-3: Sampling Points			78
Figure 8-4: Scatter Diagram Comparing the Results Obtained for Lithium Between Albemarle's In-House Laboratory and K-Utec's Laboratory			83
Figure 8-5: Scatter Diagram Comparing the Results Obtained for Lithium Between Albemarle's In-House Laboratory and Alex Stewart Laboratory			84
Figure 8-6: Scatter Diagram Comparing the Results Obtained for Lithium Between Alex Stewart Laboratory and K-Utec's Laboratory			85
Figure 9-1: Comparison of Historical Lithium Concentrations and 2018-2019 Campaign (K-Utec)			88
Figure 11-1: Regional Geological Model Extent - Plan View			95
Figure 11-2: Geological Model - Plan View			96
Figure 11-3: Geological Model - Cross Sections			97


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Figure 11-4: Distribution of Lithium Samples in Plan View (top) and Section View A-A’ (bottom, Looking to N-NW) – Drill Hole Lithium Data Projected to Section A-A' - 30x Vertical Exaggeration			99
Figure 11-5: Summary of Raw Sample Statistics of Lithium Concentration – mg/l, Log Probability and Histogram			100
Figure 11-6: Specific Yield Samples in Plan View			101
Figure 11-7: Capping Analysis (Probability Plot of Lithium) and Table of Impact of Capping (Statistics)			103
Figure 11-8: Histogram of Length of Samples of Lithium (mg/l)			104
Figure 11-9: Experimental and Modeled Omnidirectional Semi-Variogram for Lithium			105
Figure 11-10: Neighborhood Analysis on Number of Samples for Lithium			106
Figure 11-11: Outputs from the Search Ranges Optimization Analysis			107
Figure 11-12: Outputs from the Block Size Optimization Analysis			108
Figure 11-13: Plan View of the Atacama Block Model Colored by Lithology (2,260 mamsl, or 40 m bgs)			109
Figure 11-14: Histogram of Number of Drill Holes Used to Estimate the Block Model			111
Figure 11-15: Histogram of Number of Composites Used to Estimate the Block Model			111
Figure 11-16: Histogram of Average Distance from Blocks to Composites Used in Estimation			112
Figure 11-17: De-Clustering Analysis Showing Scatter Plot of Cell Size versus Lithium Mean			113
Figure 11-18: De-Clustering Analysis Showing Scatter Plot of Cell Size Versus Sy Mean – Upper Halite Lithology			114
Figure 11-19: De-Clustering Analysis Showing Scatter Plot of Cell Size versus Sy Mean – Volcanic (Volcanic and Ignimbrite) Lithologies			115
Figure 11-20: Example of Visual Validation of Lithium Grades in Composites Versus Block Model Horizontal Section - Plan View (2,250 mamsl Elevation)			116
Figure 11-21: Lithium (mg/l) - Swath Analysis at Atacama (X and Z Coordinates)			117
Figure 11-22: Sy (Fraction) - Swath Analysis at Atacama – Upper Halite Lithology			118
Figure 11-23: Model Horizontal Section - Plan View – Blocks Colored by Classification (2,260 masl Elevation)			120
Figure 12-1: Oblique 3D View of Numerical Groundwater Model			126
Figure 12-2: Zones of Direct Recharge and Lateral Groundwater Inflow			127
Figure 12-3: Zones of Simulated Maximum Evapotranspiration Rate			129
Figure 12-4: Location of Simulated Pumping Wells and Artificial Recharge Zones (Historical)			131
Figure 12-5: Solute-Transport Boundary Conditions			133
Figure 12-6: Pumping Rates used for Transient Calibration			139
Figure 12-7: Comparison of Simulated and Observed Water Levels in the Year 2018 (Average Data)			140
Figure 12-8: Water Level Comparison Hydrographs in Select Wells			142


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Figure 12-9: Observed vs Simulated Lithium Concentrations,) All Calibration Targets, B) Targets on Albemarle Property, Circle Size 2018 Averages. A Weighted by Historical Operational Pumping Rate.			144
Figure 12-10: Comparison of Measured and Simulated Average Lithium Concentration and Cumulative Lithium Mass Extraction			146
Figure 12-11: Comparison of Simulated and Observed Water Levels in the Year 2021 (Average Data)			147
Figure 12-12: Simulated Brine Total Planned Pumping Rates for The Albemarle and SQM Properties			148
Figure 12-13: Location of the Pumping Wells at Albemarle and SQM Properties Used for Predictive Simulations			149
Figure 12-14: Components of Water Balance for All Simulated Periods			151
Figure 12-15: Components of Lithium Mass Transfer Rate for All Simulated Periods			153
Figure 12-16: Distribution of Simulated Lithium Concentration in the beginning and End of the Prediction Period			154
Figure 12-17: Projected Wellfield Average Lithium Concentration			156
Figure 12-18: Projected Annual Mass of Lithium Extracted by Production Wellfield			157
Figure 12-19: Comparison of Predicted Extracted Lithium Concentration between Base Case and Sensitivity Scenarios			163
Figure 13-1: Pumping Well Installation			165
Figure 13-2: Surface Pumping Equipment			166
Figure 13-3: Predicted Life of Mine Well Location Map and Average pumping Rate			168
Figure 13-4: Operational Schedule of Production Wells			169
Figure 13-5: Pumped Volume and Predicted Lithium Concentration			170
Figure 14-1: Salar Process Flow Sheet			171
Figure 14-2: La Negra Process Flow Sheet			172
Figure 14-3: Evaporation Ponds			172
Figure 14-4: Lithium Brine Evaporation Stages			173
Figure 14-5: Aerial View of ALB Evaporation Ponds			174
Figure 14-6: SYIP Facility Layout			176
Figure 14-7: La Negra Flow Sheet			177
Figure 14-8: Boron Removal Scheme by Solvent Extraction			179
Figure 14-9: Scheme Removal of Calcium and Magnesium by Precipitation with CaO and Na2CO3			181
Figure 14-10: Scheme of Obtaining Lithium Carbonate by Precipitation with Na2CO3			183
Figure 14-11: Forecast La Negra Annual Production Capacity			185
Figure 15-1: General Project Major Facility Location			188
Figure 15-2: Antofagasta Port			189
Figure 15-3: Regional Communities			190
Figure 15-4: Salar Plant Facilities			191
Figure 15-5: La Negra Plant Facilities			192
Figure 16-1: Global Electric Vehicle Lithium Demand			199
Figure 16-2: Historic Lithium Prices (Lithium Carbonate/Hydroxide)			203
Figure 16-3: Supply/Demand Scenarios (2016 to 2023)			204


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Figure 17-1: La Negra Water Quality Monitoring Points			212
Figure 17-2: Sensitive Ecosystems in Salar de Atacama			215
Figure 17-3: La Negra and Salar de Atacama Financial Bonding Program Approved			236
Figure 18-1: Total Forecast Operating Expenditure (Real 2021 Basis)			244
Figure 19-1: Salar de Atacama Pumping Profile (Tabular Data shown in in Table 19-9)			246
Figure 19-2: Modeled Processing Profile (Tabular Data shown in in Table 19-9)			247
Figure 19-3: Modeled Production Profile (Tabular Data shown in in Table 19-9)			248
Figure 19-4: Life of Operation Operating Cost Summary (Tabular Data shown in in Table 19-9)			249
Figure 19-5: Life of Operation Operating Cost Contributions			249
Figure 19-6: Sustaining Capital Profile (Tabular Data shown in in Table 19-9)			251
Figure 19-7: Annual Cashflow Summary (Tabular Data shown in in Table 19-9)			254
Figure 19-8: Relative Sensitivity Analysis			254
Figure 20-1: Environmentally Authorized Brine Extraction Areas in the Salar de Atacama			257
Figure 20-2: SQM's Brine Extraction Operational Rule			258
Figure 20-3: Historical Series of Net Brine Extraction by SQM			258
Figure 20-4: Spatial Distribution of Concessioned Water Rights in the Salar de Atacama Basin			261


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List of Abbreviations

The metric system has been used throughout this report. Tonnes are metric of 1,000 kg, or 2,204.6 lb. All currency is in U.S. dollars (US$) unless otherwise stated.


Abbreviation			Definition
°C			degrees Celsius
2D			two dimensional
3D			three dimensional
A/P			Accounts Payable
A/R			Accounts Receivable
ADI			Indigenous Development Area
Albemarle			Albemarle Corporation
APVC			Altiplano-Puna volcanic complex
BEV			battery electric vehicle
BG			Battery grade
BNEF			Bloomberg New Energy Finance
CoG			cut off grade
CONAF			National Forestry Corporation
DGA			General Water Directorate
ET			Evapotranspiration
EWMP			Environmental Water Monitoring Plan
H2SO4			sulfuric acid
ha			hectares
HCl			hydrochloric acid
ICE			internal combustion engine
ID2			Inverse Distance Squared
IDW			inverse distance weighting
KE			kriging efficiency
kg			kilograms
kg/d			kilograms per day
km			kilometers
km2			square kilometers
L			liter
l/s			liters per second
LCE			lithium carbonate equivalent
Li			lithium
LiCl			lithium chloride
LME			lithium metal equivalent
LoM			life of mine
m			meters
m/d			meters per day
m3/y			cubic meters per year
Ma			mega annum
mamsl			meters above mean seal level
mg/L			milligrams per liter
mm			millimeters
mm/y			millimeters per year
MNT			Monturaqui-Negrillar-Tilopozo
MOP			muriate of potash
MRE			Mineral Resource Estimate


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Mt/y			million tonnes per year
NaOH			sodium hydroxide
NMR			Nuclear Magnetic Resonance
NN			nearest neighbor
OK			ordinary kriging
PAT			Early Warning Plan
PFS			prefeasibility study
PMB			Environmental Monitoring Plan
PPE			personal protective equipment
QA/QC			Quality Assurance/Quality Control
QP			Qualified Person
RAMSAR			Convention on Wetlands
RMSE			root mean square error
SCL			Chilean Society of Limited Lithium
SEA			Environmental Assessment Service
SEC			Securities and Exchange Commission
SEIA			Chilean Environmental Impact System
SEN			Sistema Eléctrico Nacional
SEP			Sistema de Empresas
SERNAGEOMIN			National Service of Geology and Mining
SMA			Environmental Superintendence
SOR			slope or regression value
SRK			SRK Consulting (U.S.), Inc.
SS			specific storage
Sy			specific yield
SYIP			Salar Yield Improvement Program
t			metric tonnes
t/y			tonnes per year
TG			technical grade
TRS			Technical Report Summary
VGC			Volcanic, Gypsum and clastic
ZOIT			Zone of Tourist Interest


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1Executive Summary

This report was prepared as a prefeasibility study (PFS)-level Technical Report Summary (TRS) in accordance with the Securities and Exchange Commission (SEC) S-K regulations (Title 17, Part 229, Items 601 and 1300 until 1305) for Albemarle Corporation (Albemarle) by SRK Consulting (U.S.), Inc. (SRK). This TRS is for the portion of the Salar de Atacama lithium-rich brine deposit controlled by Albemarle and the associated brine concentration facilities and La Negra lithium processing facilities owned by Albemarle, combined referred to as the “Project ” located in Region II, Chile. The purpose of this TRS is to support public disclosure of Albemarle’s mineral resources and mineral reserves for the Salar de Atacama for Albemarle’s public disclosure purposes.

1.1Property Description and Ownership

The Salar de Atacama Basin is located in the commune of San Pedro de Atacama, with the operations approximately 100 kilometers (km) to the south of this commune, in the extreme east of the Antofagasta Region and close to the border with the republics of Argentina and Bolivia. In a regional context, the salar is located in a remote area with the nearest city, Calama, approximately 190 km by road to the northwest. The regional capital, Antofagasta, which also is located near the La Negra processing facilities, is located approximately 280 km, by road to the west.

Albemarle's mining properties within the Salar de Atacama include two groups of exploitation concessions, CASEME (Carlos Sáez – Eduardo Morales Echeverría) and OMA, which cover a total of 5,227 mining properties. They comprise of approximately 25 km at the widest zone in the East-West direction and 12 km in the widest North-South zone. For the purpose of the reserve estimate, the OMA concessions are those that are relevant. The CASEME concessions include 1,883 properties and the same number of hectares (ha). The OMA concessions include 3,344 mining properties of 5 ha each, which corresponds to 16,720 ha.

Albemarle owns the land on which the extraction/processing facilities at Salar de Atacama and the processing facility at La Negra operate. However, the ownership of the land at the Salar de Atacama will revert to the Chilean government once all amounts of lithium remaining under Albemarle’s contracts with the Chilean government are sold (the ownership of the land and fixed assets at La Negra will remain unchanged).

Albemarle’s mineral rights at the Salar de Atacama in Chile consist of the right to extract lithium brine, pursuant to a long-term contract with the Chilean government, originally entered into in 1980 by Foote Minerals, a predecessor of Albemarle. This contract has been subsequently amended and restated.

Albemarle’s predecessor’s initial contract with the Chilean government will remain in effect until the date on which it has produced and sold 200,000 metric tonnes (t) of lithium metal equivalent (LME), although the lithium can be produced in any of its forms, from the Salar de Atacama. As of August 31, 2021, the remaining amount of lithium from the initial contract equals approximately 78,038 t of LME. On November 25, 2016, CORFO and Albemarle entered into an annex to the initial agreement adding an additional 262,132 t LME to the total quota and setting an expiry for production of the


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quota of January 1, 2044 (i.e., any remaining quota after this date will be forfeited). As of August 31, 2021, the remaining amount of lithium from the second quota equals 262,132 t. Combined, as of the effective date of this TRS, August 31, 2021, Albemarle has a remaining quota of 340,170 t of LME, expiring January 1, 2044.

1.2Geology and Mineralization

Salar de Atacama is located in the Central Andes of Chile, a region which is host to some of the most prolific lithium (Li) brine deposits in the world. The Central Andean Plateau and the Atacama Desert are two important physiographic features that contribute to the generation of Li brines in the Central Andes. In these environments, the combination of hyper-arid climate, closed basins, volcanism, and hydrothermal activity has led to extensive deposition of evaporite deposits since approximately 15 mega annum (Ma) (Alonso et al., 1991). The extreme size and longevity of these closed basins is favorable for lithium-rich brine generation, particularly where thick evaporite deposits (halite, gypsum and less commonly borates) have removed ions from solution and further concentrated lithium.

Basin fill materials at the Salar de Atacama are dominated by the Vilama Formation and modern evaporite and clastic materials currently being deposited in the basin. In the Albemarle operation area, the Vilama Formation is up to approximately 1 km thick and is host to the production aquifer system. The formation is composed of evaporite chemical sediments including intervals of carbonate, gypsum and halite punctuated by volcanic deposits of large ignimbrite sheets, volcanic ashes and minor clastic deposits. These deposits are best observed in outcrop along the salar margin and in drill cores from the Albemarle project site.

Lithium-rich brines are produced from a halite aquifer within the salar nucleus. Carbonate and sulfate flank the basin and indicate that carbonate and sulfate mineral precipitation may have played a role in producing the brine. In addition to the evaporative concentration processes, the distillation of lithium from geothermal heating of fluids may further concentrate lithium in these brines and provide prolonged replenishment of brines that are in production. Since many lithium-rich brines exist over, or in close proximity to, relatively shallow magma chambers, the late-stage magmatic fluids and vapors may have pathways through faults and fractures to migrate into the closed basin.

Waters in the Salar de Atacama basin and the adjacent Andean arc vary in lithium concentration from approximately 0.05 to 5 milligrams per liter (mg/L) Li in the Andean inflow waters, 5 to 100 mg/L Li in shallow groundwaters in the south and east flanks of the basin and in excess of 5,000 mg/L Li in brines in the nucleus (Munk et al., 2018). This indicates that the lithium-rich brine in the basin is concentrated by up to five orders of magnitude compared to water entering the basin. This is a unique hydrogeochemical circumstance to the salar compared to other lithium brine systems.

1.3Mineral Resource

Mineral resources have been estimated by SRK. SRK generated a three dimensional (3D) geological model informed by various data types (drill hole, geophysical data, surface geologic mapping, interpreted cross sections and surface/downhole structural observations) to constrain and control the shapes of aquifers which host the lithium.

Lithium concentration data from the brine sampling exploration data set was regularized to equal lengths, when was possible, for constant sample volume (Compositing). Lithium grades were interpolated into a block model using ordinary kriging (OK) and inverse distance weighting (IDW)


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methods. Results were validated visually and via various statistical comparisons. The estimate was depleted for current production, categorized in a manner consistent with industry standards and statistical parameters. Mineral resources have been reported above a cutoff grade (CoG) supporting reasonable potential for eventual economic extraction of the resource. Mineral resources, as of August 31, 2021, exclusive of reserves, are summarized in Table 1-1. Mineral resources, as of August 31, 2021, inclusive of reserves, are summarized in Table 1-2.


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Table 1-1: Salar de Atacama Mineral Resource Estimate, Exclusive of Mineral Reserves (Effective August 31, 2021)

Measured Resource

Indicated Resource

Measured + Indicated Resource

Inferred Resource

Contained Li (Tonnes x 1000)

Brine Concentration (mg/L Li)

Contained Li (Tonnes x 1000)

Brine Concentration (mg/L Li)

Contained Li (Tonnes x 1000)

Brine Concentration (mg/L Li)

Contained Li (Tonnes x 1000)

Brine Concentration (mg/L Li)

Total

717

2,211

687

1,747

1,404

1,959

131

1,593

Source: SRK, 2021

•Mineral resources are reported exclusive of mineral reserves. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

•Resources are reported on an in-situ basis.

•Resources are reported between the elevations of 2,299 masl and 2,200 masl. Resources are reported as lithium metal

•Resources have been categorized subject to the opinion of a QP based on the amount/robustness of informing data for the estimate, consistency of geological/grade distribution, survey information.

•Resources have been calculated using drainable porosity estimated from measured values in Upper Halite and VGC units, and bibliographical values based on the lithology and QP’s experience in similar deposits

•The estimated economic cutoff grade utilized for resource reporting purposes is 670 mg/l lithium, based on the following assumptions:

◦A technical grade lithium carbonate price of US$11,000 / metric tonne CIF La Negra. This is a 10% premium to the price utilized for reserve reporting purposes. The 10% premium applied to the resource versus the reserve was selected to generate a resource larger than the reserve, ensuring the resource fully encompassed the reserve while still maintaining reasonable prospect for eventual economic extraction.

◦Recovery factors for the salar operation increase gradually over the span of four years, from the current 40% to the proposed SYIP 65% recovery in 2025. After that point, evaporation pond recovery is assumed constant at 65%, considering the installation of a liming plant is assumed in 2027. An additional recovery factor of 80% lithium recovery is applied to the La Negra lithium carbonate plant.

◦A fixed average annual brine pumping rate of 442 l/s is assumed, consistent with Albemarle’s permit conditions.

◦Sustaining capital costs are included in the cutoff grade calculation and post the SYIP installation, average around US$54M per year.

•Mineral Resources tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding.

•SRK Consulting (U.S.) Inc. is responsible for the Mineral Resources with an effective date: August 31, 2021. The geologic block model is incorporating all relevant exploration data as of June 30, 2020 and there is no additional data since that date. The resource has been depleted to August 31, 2021.


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Table 1-2: Salar de Atacama Mineral Resource Estimate, Inclusive of Mineral Reserves (Effective August 31, 2021)


	Measured Resource		Indicated Resource		Measured + Indicated Resource		Inferred Resource
	Contained Li (Tonnes x 1000)	Brine Concentration (mg/L Li)	Contained Li (Tonnes x 1000)	Brine Concentration (mg/L Li)	Contained Li (Tonnes x 1000)	Brine Concentration (mg/L Li)	Contained Li (Tonnes x 1000)	Brine Concentration (mg/L Li)
In Situ	1,029	2,211	966	1,747	1,995	1,959	131	1,593
In Process	24	2,685	0	0	24	2,685	-	-

Source: SRK, 2021

•Mineral resources are reported inclusive of mineral reserves. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

•Resources are reported as in situ and in process. In process resources quantify the prior 24 months of pumping data and reflect the raw brine, at the time of pumping.

•In situ resources are reported between the elevations of 2,299 masl and 2,200 masl.

•Resources are reported as lithium metal

•Resources have been categorized subject to the opinion of a QP based on the amount/robustness of informing data for the estimate, consistency of geological/grade distribution, survey information.

•The estimated economic cutoff grade utilized for resource reporting purposes is 670 mg/l lithium, based on the following assumptions:

◦A fixed average annual brine pumping rate of 442 l/s is assumed, consistent with Albemarle’s permit conditions.

◦Sustaining capital costs are included in the cutoff grade calculation and post the SYIP installation, average around US$54M per year.

•Mineral Resources tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding.


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1.4Mining Methods and Mineral Reserve Estimates

The brine reserve is extracted at the Salar de Atacama by pumping the raw brine from the aquifer utilizing a network of wells and trenches. This method of brine extraction has been used at the operation since 1983. The extracted brine is transferred to a series of evaporation ponds for initial processing (i.e., concentration with solar evaporation).

There are currently approximately 75 active brine extraction wells, and, over the life of mine, this number of wells is forecast to gradually reduce to a steady state of 72 extraction wells. There are both shallow and deep wells in place with depths of between 25 meters (m) and 40 m for the shallow wells and 70 m to 90 m for deep wells. Brine extraction rates from the aquifer are restricted by permit conditions to a combined maximum average annual rate of 442 liters per second (l/s). Extraction wells are located to maximize lithium grades as well as balance calcium and sulphate-rich brines to benefit process recovery rates.

A geologically-based, 3D, numerical groundwater-flow and solute transport model was developed to evaluate the extractability of brine from the salar and develop the life of mine (LoM) pumping plan that underpins the reserve estimate. The model construction is based on an analysis of historical hydrogeologic data conducted by Albemarle and SRK.

Using these hydrogeologic properties of the salar combined with the wellfield design parameters, the rate and volume of lithium projected as extracted from the Project area was simulated using this predictive model. The predictive model output generated a brine production profile appropriate for the salar based upon the wellfield design assumptions with a maximum pumping rate of 442 L/s (i.e., maximum authorized extraction rate) over a period of 21 years. The use of a 21-year period reflects the timing required to extract the full, authorized quota of lithium production. Given the approximately two year offset in timing from pumping to final production, this also is the last year that extraction from the salar can be reasonably expected to still result in lithium produced by the 2043 expiry of Albemarle’s production quota.

When estimating brine resources and reserves, different models are utilized to define those resources and reserves. The resource model presents a static, in situ measurement of potentially extractable brine volume whereas the reserve model (i.e., the predictive model) presents a dynamic simulation of brine that can potentially be pumped through extraction wells. As such, the predictive model does not discriminate between brine derived from inferred, measured, or indicated resources. Further, a brine resource is dynamic and is constantly influenced by water inflows (e.g., precipitation, groundwater inflows, pond leakage, etc.) and pumping activities which cause varying levels of mixing and dilution. Therefore, direct conversion of measured and indicated classification to proven and probable reserves is not practical. As the direct conversion is not practical, in the QP’s opinion, the most defensible approach to classification of reserves (e.g., proven versus probable) is to utilize a time-dependent approach as the QP has the highest confidence in the early years of the predictive model results, with a steady erosion of that confidence over time.

Therefore, in the context of time-dependent risk, in the QP’s opinion, the production plan through the end of 2031 approximately 10.3 years of pumping) is reasonably classified as a proven reserve with the remainder [10.3 years]) of production classified as probable. Notably, this results in approximately 49% of the reserve being classified as proven and 51% of the reserve being classified as probable. For comparison, the measured resource comprises approximately 52% of the total


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measured and indicated resource. In the QP’s opinion, this is reasonable as the overall geological and technical uncertainty for the Salar de Atacama resource and reserve are similar.

Table 1-3 presents the Salar de Atacama mineral reserves as of August 31, 2021.

Table 1-3: Salar de Atacama Mineral Reserves, Effective August 31, 2021


	Proven Reserve		Probable Reserve		Proven and Probable Reserve
	Contained Li (Metric Tonnes x 1000)	Li Concentration (mg/L)	Contained Li (Metric Tonnes x 1000)	Li Concentration (mg/L)	Contained Li (Metric Tonnes Li x 1000)	Li Concentration (mg/L)
In Situ	312	2,162	279	1,948	591	2,061
In Process	24	2,685	0	0	24	2,685

Source: SRK, 2021

•Proven reserves have been estimated as the lithium mass pumped during Years 2020 through 2030 of the proposed Life of Mine plan

•Probable reserves have been estimated as the lithium mass pumped from 2030 until the end of the proposed Life of Mine plan (2041)

•Reserves are reported as lithium metal

•The estimated economic cutoff grade for the Project is 783 mg/l lithium, based on the assumptions discussed below. The truncated production pumping plan remained well above the economic cutoff grade (i.e., the economic cutoff grade did not result in a limiting factor to the estimation of the reserve).

◦A technical grade lithium carbonate price of US$10,000 / metric tonne CIF Asia.

◦A fixed average annual brine pumping rate of 442 l/s is assumed, consistent with Albemarle’s permit conditions.

◦Sustaining capital costs are included in the cutoff grade calculation and post the SYIP installation, average around US$54M per year.

•Mineral reserve tonnage, grade and mass yield have been rounded to reflect the accuracy of the estimate and numbers may not add due to rounding.

•SRK Consulting (U.S.) Inc. is responsible for the mineral reserves with an effective date: August 31, 2021. The geologic block model is incorporating all relevant exploration data as of June 30, 2020 and there is no additional data since that date. The resource has been depleted to August 31, 2021.

In the QP’s opinion, key points of uncertainty associated with the modifying factors in this reserve estimate that could have a material impact on the reserve include the following:

•Initial lithium concentration: The current initial concentration was estimated based on the best data available by space distribution and date (2018 to 2019 sampling campaign), which was assigned to the year 1999 as initial condition for calibration purposes. This assumption underestimates the lithium concentration at the beginning of the production. In order to illustrate this effect of the initial lithium concentration, the lithium distribution mentioned above was set up at the end of the transition model (August 2021). As a result, the average lithium concentrations increase by 9%.


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•Seepage from processing ponds: the predictive simulations did not consider potential seepage of concentrated brine from the processing pond. Such seepage may have two opposing effects: on one hand, loss of lithium mass between extraction from groundwater and production of lithium carbonate at the end of the concentration process, and on the other hand replenishing groundwater with lithium that could be captured by extraction wells. SRK completed a sensitivity simulation that predicts that pond seepage would result in average lithium concentrations increase of approximately 10% at the end of production as compared to the base case (for the conditions evaluated in the sensitivity analysis).

•Freshwater/brine mixing: the numerical model implicitly simulated the density separation of lateral freshwater recharge and salar brine by imposing a low-conductivity zone at the brine-freshwater interface. It is possible that lateral recharge of freshwater into the salar may increase without this restriction, as the water table declines as a result of pumping and reducing the amount of freshwater lost to evaporation at the periphery of the salar. SRK completed a sensitivity analysis where the hydraulic conductivity at the freshwater/brine interface was increased by half an order of magnitude (dashed green line). This scenario resulted in no material change compared to the base case.

•Hydrogeological assumptions: factors such as specific yield and hydraulic conductivity play a key role in estimating the volume of brine available for extraction in the wellfield and the rate it can be extracted. Actual contacts between hydrogeological units may not be exactly as represented in the numerical model. These factors are variable through the salar and are difficult to directly measure. Hydraulic conductivities and specific yields lower than assumed in the numerical model would result in reduced pumpability and reduced lithium mass extraction. Specific yields and porosities lower than assumed in the model would lead to faster migration of fresh / brackish water from the edges of the salar and dilution of lithium concentrations in extraction wells. SRK completed a sensitivity where effective porosities in the upper part of the salar were reduced by 20%. This scenario resulted in average lithium concentrations reduction of approximately 5% at the end of production as compared to the base case.

•Lithium carbonate price: although the pumping plan remains above the economic cutoff grade, commodity prices, can have significant volatility which could result in a shortened reserve life.

•Change to SQM pumping plan: the numerical model makes certain assumptions regarding the SQM pumping plan (which terminates at the end of 2030). Overall, SQM has extracted – and is expected to extract – brines at greater rates than Albemarle. SQM pumping has resulted in drawdowns at the salar of up to approximately 14 m in the southwest region of the salar. Enhanced pumping by SQM, or lengthening of the pumping period, may have two effects: reduce available resource in the salar, and draw freshwater at greater rate from the periphery of the salar (dilution effect). Conversely, reduced extraction by SQM would increase available resources and reduce dilution.

•Process recovery: the ability to extract the full lithium production quota within the defined production period relies upon the ability to increase recovery rates of lithium in the evaporation ponds from current levels of approximately 40% to a target of approximately 65%. This will require updating the process flow sheet at the salar to reduce lithium losses to precipitated salts. In the QP’s opinion, the assumed recovery rates are reasonable; however, there remains uncertainty in performance of the new process and any material


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underperformance to these targets could limit Albemarle’s ability to extract its full lithium quota prior to expiry of the quota.

•Lithium production quota: the current production quota acts as a hard stop on the estimated reserve. It is important to note that the expiry date for production of this lithium is 2043. If raw brine grades, pumping rates or process recoveries underperform forecasts and Albemarle cannot produce the full quota by 2043, this potential reserve will be lost (i.e., Albemarle cannot recover lost production in later years and cannot pump faster than the regulatory limit of 442 l/s to offset any underperformance). Conversely, with lithium grades well above economic cutoff and approximately 30% of the estimated mineral resource converting to reserve, the potential to negotiate an additional production quota with the government of Chile presents an opportunity to increase the current reserve, which is artificially constrained by the current quota.

1.5Mineral Processing and Metallurgical Testing

Albemarle's operations in Chile are developed in two areas, the Salar de Atacama and La Negra.

At the salar, a lithium-rich chloride brine is extracted from production wells. This brine is pumped to ponds where it goes through a concentration process utilizing solar evaporation. The objective of the concentration process is to obtain a concentrated lithium chloride brine of around 6% lithium that is largely depleted of impurities such as sulfate, sodium, calcium, potassium and magnesium. This concentrated brine is transported to the La Negra chemical plant for further processing. There is also a potash (KCl) plant for byproduct potash production at the salar. Albemarle also harvests halite and bischofite salts from the evaporation ponds as byproduct production for third party sales.

The La Negra plant receives the concentrated brine from the salar, and the brine is further processed with several purification steps followed by the conversion of the lithium from a chloride to a lithium carbonate. The La Negra plant produces both technical and battery grade lithium carbonate. Albemarle has also historically produced lithium chloride product at La Negra.

These operations have been in production for approximately 40 years and most of the data relied upon to forecast operational performance relies upon experience with historic production. However, Albemarle is proposing a modification to its flow sheet at the salar to improve lithium process yields in the evaporation ponds. Albemarle refers to this process as the Salar Yield Improvement Program (SYIP). The SYIP aims to improve this process recovery through mechanical grinding and washing of by-product salts in two new plants, the Li-Carnalite Plant and Bischofite Plant.

Based on testwork performed in 2017 by K-UTEC on the proposed SYIP flowsheet, Albemarle has assumed evaporation pond yield improves up to an average of around 65%. Current operations have a 40% recovery and is increasing. SRK has generally accepted this assumption although has modified the yield to be variable based on lithium concentration in the raw brine. Over time, SRK’s pumping plan predicts that the ratio of sulfate to calcium will increase in the raw brine, potentially reducing evaporation pond yields. To offset this potential future imbalance, SRK has assumed addition of a liming plant to increase calcium levels in the ponds and reduce lithium losses which could be solved in the future by optimizing the annual pumping plan. Post the installation of this liming plant, SRK has assumed a fixed 65% evaporation pond yield.


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1.6Infrastructure

The Project is a mature functioning operation with two separate sites that contain key facilities. Access is fully developed, with the majority accessible by paved major highway and local improved roadways on site. There is an air strip at the salar operations. The Antofagasta airport is the nearest major commercial airport servicing the La Negra operation (the Calama airport is the closet major commercial airport to the salar). The infrastructure is in place, operating and provides all necessary support for ongoing operations as summarized in this report.

The Salar site contains the brine well fields, brine supply water pipelines to evaporation ponds, primary processing facilities to create a concentrated brine, a phosphate plant that creates a potassium chloride product, camps; including a new camp that is partially constructed and functional with a second phase planned, airfield, access and internal roads, diesel power generated supply and distribution, water supply and distribution, shop and warehouse facilities, administrative offices, change houses, waste salt storage areas, fuel storage systems, security and communications systems. The concentrated brine product is trucked approximately 260 km to the La Negra facility. Future additions to the infrastructure include substation and powerline additions to connect to the local Chilean power system in 2021.

The La Negra plant purifies the lithium brine from the Salar Plant and converts the brine into lithium carbonate and lithium chloride. Facilities at the site include the boron removal plant, calcium and magnesium removal plant, lithium carbonate conversion plants, lithium chloride plant, evaporation sedimentation ponds and an “offsite” area where raw materials are warehoused and combined as needed in the processing facilities. Power to the facility is provided by the regional power company via a 110 kV transmission line and distributed throughout the plant to load centers. Piped natural gas provides the energy for heating and steam needs at the facilities. The project is security protected and has a full communication system installed.

Final products from the La Negra plant are delivered to clients by truck, rail, or through two port facilities near the plant.

1.7Environmental, Social, and Closure

Baseline studies, in both operational areas, have been developed since the first environmental studies for permitting were submitted; 1998 in La Negra, and 2000 at Salar de Atacama. With the ongoing monitoring programs in both locations, environmental studies, such as hydrogeology and biodiversity, are regularly updated.

The Salar de Atacama basin presents a unique system due to the biodiversity associated with lake and wetland systems that depend on the hydrogeological conditions of the area. There are also indigenous areas and communities in the sector. As such, the key environmental issues at Salar de Atacama include biodiversity, hydrogeology, and socioeconomics.

La Negra is located within an industrial area which is in saturation conditions for the daily and annual standard of inhalable particulate matter (PM10). Although there are no surface water courses, there is an aquifer that could be affected by potential infiltrations from the plant facilities. As such, a water quality monitoring program is in place. Air quality, hydrogeology, and water quality have been deemed as key environmental characteristics of the La Negra area.


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The operations of Albemarle have adequate plans to address and follow-up the most sensitive and relevant environmental issues, such as hydrogeological/biodiversity issues, and those associated with the indigenous communities in the Salar de Atacama area.

Albemarle adequately follows up on issues related to water quality in the Negra and fluctuations in the water table and potential effects on the sensitive ecosystems around the Salar de Atacama, including analysis of possible cumulative effects given the multiplicity of actors that extract brine and freshwater in the area. The aim of the Early Warning Plan is to promptly detect any deviation from what was indicated in the initial environmental assessment, preventing unforeseen impacts from occurring. Notwithstanding the above, the Salar de Atacama is a complex system and requires constant updating of management tools based on the results of the monitoring programs, and also be attentive to requirements or new tools that the authority may incorporate.

Albemarle has the environmental permits for an operation with an average brine extraction rate of 442 L/s, a production of 250,000 cubic meters per year (m3/y) of brine concentrated in solar evaporation ponds with an approximate surface area of 1,043 ha, for a production of 94,000 t/year of lithium carbonate equivalent (LCE). Brine exploitation is authorized until 2043. Any modification of the production and/or extraction, or to any approved conditions, will require a new environmental permit.

Albemarle has an approved closure plan (Res. Ex. N°287/2019), which includes all environmental projects approved until 2016, including EIA “Modification and improvement solar evaporation system” (RCA N°021/2016).This closure plan considers a life of mine until 2043, estimated by the authority’s methodology, which response to financial assurance purposes and it does not define the definitive closure date.

In terms of closure activities, the approved closure plan considers 17 month period of execution, which includes backfilling of the ponds, and dismantling and demolish of all infrastructure, including final disposal.

Post-closure activities comprise monitoring of 221 monitoring wells for water quality, evaporation and flux monitoring of groundwater and surficial waters on site. This monitoring program will continue for three years after closure, on a quarterly basis.

The closure cost has been estimated based on the approved closure plan plus a conceptual estimate of all environmental projects reviewed in this document, and that were not included in the closure plan. The total closure costs of La Negra and Salar de Atacama Plants are US$40.89 million, considering direct and indirect costs, and contingencies.

However, the purpose of this estimate is only to provide the Chilean government an assessment of the closure liabilities at the site and form the basis of financial assurance. This type of estimate typically reflects the cost that the government agency responsible for closing the site in the event that an operator fails to meet their obligation. If Albemarle, rather than the government, closes the site in accordance with their current mine plan and approved closure plan, the cost of closure is likely to be different from the financial assurance cost estimate approved by the government.

Furthermore, because closure of the site is not expected until 2043, the closure cost estimate represents future costs based on current expectations of site conditions at that date. In all probability, site conditions at closure will be different than currently expected and, therefore, the current estimate of closure costs is unlikely to reflect the actual closure cost that will be incurred in the future.


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1.8Capital and Operating Costs

The Salar de Atacama and La Negra facilities are currently operating. Capital and operating costs are forecast as a normal course of operational planning with a primary focus on short term budgets (i.e., subsequent year). The operations currently utilizes mid (e.g., five year plan) and less detailed long-term (i.e., LoM) planning. Given the limited official mid and long-term planning completed at the operation, SRK developed a long-term forecast for the operation based on Albemarle forecasts, combined with historic operating results, adjusted for assumed changes in operating conditions and planned strategic changes to operations (the most significant changes being completion of the La Negra 3 expansion and the installation of the SYIP). SRK’s capital expenditure forecast is provided in Table 1-4 and its operating cost forecast is provided in Figure 1-1.

Table 1-4: Capital Cost Forecast ($M Real 2020)


Period	Total Sustaining Capex	Total Expansion Projects	Capital Expenditure (US$M Real 2020)
2020	12.9	64.8	77.7
2021	37.5	64.9	96.1
2022	43.2	88.0	125.5
2023	51.0	47.0	90.2
2024	52.4	-	51.0
2025	75.8	-	74.4
2026	53.8	-	53.8
2027	53.8	-	53.8
2028	53.8	-	53.8
2029	53.8	-	53.8
Remaining LOM (2031 – 2043)	685.6	--	685.6

Note: 2020 capex is July – December only, assumed at 50% of total 2020 spend

Source: SRK, 2021

Note 2020 costs reflect a partial year (September – December)

Source: SRK

Figure 1-1: Total Forecast Operating Expenditure (Real 2020 Basis) (Tabular Data shown in Table 19-9)


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Estimation of capital and operating costs is inherently a forward-looking exercise. These estimates rely upon a range of assumptions and forecasts that are subject to change depending upon macroeconomic conditions, operating strategy and new data collected through future operations. For this report, capital and operating costs are estimated to a PFS-level, as defined by S-K 1300, with a targeted accuracy of +/-25%. However, this accuracy level is only applicable to the base case operating scenario and forward-looking assumptions outlined in this report. Therefore, changes in these forward-looking assumptions can result in capital and operating costs that deviate more than 25% from the costs forecast herein.

1.9Economics

The operation is forecast to have a 24-year life with the first modeled year of operation being a partial year to align with the effective date of the reserves.

The economic analysis metrics are prepared on annual after-tax basis in US$. The results of the analysis are presented in Table 1-5. At a technical grade lithium carbonate price of US$10,000/t, the net present value, using an 8% discount rate (NPV 8%), of the modeled after-tax free cash flow is US$1,972 million. Note that because Salar de Atacama is in operation and is modeled on a go-forward basis from the date of the reserve, historic capital expenditures are treated as sunk costs (i.e., not modeled) and therefore, IRR and payback period analysis are not relevant metrics.

Table 1-5: Indicative Economic Results


LoM Cash Flow (Unfinanced)	Units	Value
Total Revenue	US$	16,720,589,734
Total Opex	US$	(5,534,107,988)
Royalties	US$	(2,294,064,911)
Operating Margin	US$	8,892,416,835
Operating Margin Ratio	%	53%
Taxes Paid	US$	(2,394,685,717)
Free Cashflow	US$	4,977,836,374
Before Tax
Free Cash Flow	US$	7,372,522,091
NPV @ 8%	US$	3,027,458,930
NPV @ 10%	US$	2,518,956,354
NPV @ 15%	US$	1,679,104,360
After Tax
Free Cash Flow	US$	4,977,836,374
NPV @ 8%	US$	1,972,048,082
NPV @ 10%	US$	1,622,066,434
NPV @ 15%	US$	1,045,940,855

Source: SRK, 2021

A summary of the cashflow on an annual basis is presented in Figure 1-2.


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Source: SRK, 2021

Figure 1-2: Annual Cashflow Summary (Tabular Data shown in Table 19-9)

1.10 Recommendations and Conclusions

1.10.1Geology

The property is well known in terms of descriptive factors and ownership. Geology and mineralization are well-understood through decades of active mining. The status of exploration, development, and operations is very advanced and active. Assuming that exploration and mining continue at Salar de Atacama in the way that they are currently being done, there are no additional recommendations at this time.

1.10.2Mineral Resource Estimate

SRK has reported a mineral resource estimation (MRE) which is appropriate for public disclosure and long-term considerations of mining viability. The mineral resource estimation could be improved with additional infill program (drilling and brine sampling).

1.10.3Mineral Reserves

Mining operations have been established at the Salar de Atacama over its more than 35-year history of production. Reserve estimates have been developed based on a predictive hydrogeological model that estimates brine production rates and associated lithium concentrations over time. In the QP’s opinion, the mining methods and predictive approach for reserve development are appropriate for the Salar de Atacama.

However, in the QP’s opinion, there remains opportunity to further refine the production schedule. This optimization should focus on the balance between calcium and sulfate concentration in the production brine. Maintaining an optimum blend of calcium-rich and sulfate-rich brine improves process recovery in the evaporation ponds. SRK’s current assumption is an optimum balance in these contaminants is lost in 2027 and has assumed the additional capital and operating cost expenditure associated with installation and operation of a liming plant is required. However, if additional calcium-rich brine can be sourced in the pumping plan, these assumed expenses could potentially be delayed or avoided altogether.


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1.10.4Infrastructure

The project is a mature functioning operation with two separate sites that contain key facilities. The infrastructure is in place, operating and provides all necessary support for ongoing operations as summarized in this report. No significant risks associated with the Project are identified in this report.

1.10.5Environmental, Social, and Closure

Albemarle adequately follows up on issues related to water quality in the Negra and fluctuations in the water table and potential effects on the sensitive ecosystems around the Salar de Atacama, including analysis of possible cumulative effects given the multiplicity of actors that extract brine and freshwater in the area. Notwithstanding the above, the Salar de Atacama is a complex system and requires constant updating of management tools based on the results of the monitoring programs, and also be attentive to requirements or new tools that the authority may incorporate.

In relation with the indigenous communities, Albemarle maintains relations with all the communities and indigenous groups in the area and has achieved and maintained unprecedented agreements in Chile with these communities. Any future development or modification of the current conditions of the operation will be subject to an Indigenous Consultation Process; therefore, it is of high importance to maintain this adequate management strategy with these communities.

Currently, there are no known environmental issues that could materially affect Albemarle's capacity to extract the resources or reserves of the Salar de Atacama, as long as the brine extraction is kept at the values approved by the environmental authority. Any requirement of a brine extraction greater than the one approved (442 L/s) has an uncertain approval success, considering the multi-user conditions in the Salar de Atacama, the sensitivity of the ecosystem and the synergistic impacts on this ecosystem which concern the environmental and water authorities

There is an operational issue that could generate regulatory risk, related with infrastructure requirements to adequately manage the liquid solutions that are generated in La Negra's process, which is not possible to manage with the current facilities. Any spill or overflow from the ponds can lead to an environmental non-compliance that can be sanctioned by the Superintendence of the Environment. This issue is being addressed as a priority action by the company to seek a definitive solution in the long term, and also one that allows them to solve the issue in the short term.

Albemarle has also an approved closure plan (Res. Ex. N°287/2019), which includes all environmental projects approved until 2016, including EIA “Modification and improvement solar evaporation system” (RCA N°021/2016).This closure plan considers a life of mine until 2043, estimated by the authority’s methodology, which response to financial assurance purposes and it does not define the definitive closure date.

Albemarle does not currently have an internal closure cost estimate other than for financial assurances. Therefore, other costs would likely be incurred by Albemarle during closure of the site. Then, the actual closure cost could be greater or less than the financial assurance estimate.


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Due to new environmental approvals not included in the approved closure plan, it is required that Albemarle update its closure plan in order to be able to operate some of these projects, as they need the closure plan approval for execution.

Therefore, it is highly recommended to develop an internal closure plan, where other costs could be determined, such as head office costs, human resources costs, taxes, operator-specific-costs, and social costs. Also, closure provision should be determined in this document.

1.10.6Mineral Processing and Metallurgical Testing

In the QP’s opinion, the long operating history and associated knowledge and information provide appropriate support for development of operating predictions for this reserve estimate. The notable deviation from historic practice is the SYIP.

Albemarle is currently planning on developing the SYIP in the next few years. Historic testwork associated with this project has gaps in sample representivity and support for projected mass balances. SRK recommends updating these test results with more representative samples and a more thorough evaluation of associated mass balances with the potential to further optimize the SYIP performance and reduce risk in ramp up and performance. Nonetheless, in the QP’s opinion, the projected performance for the SYIP is reasonable.

SRK has assumed that a liming plant will be required starting in 2027 to offset a reduction in calcium-rich brine available for blending. If further optimization of the life of mine pumping plan is not possible (i.e., the sulfate to calcium ratio cannot be reduced by alternative pumping strategy), Albemarle will need to add calcium to the evaporation pond system to avoid additional lithium losses in the ponds. Albemarle should start conceptual evaluation of this calcium addition (whether through liming as assumed by SRK or alternative options) so that if/when this plant is required, Albemarle will have an appropriate design developed for installation.

1.10.7Capital and Operating Costs

The capital and operating costs for the Salar de Atacama operation have been developed based on actual project costs. In the opinion of the QP, the cost development is acceptable for declaration of mineral reserves. However, the operation itself lacks detailed life of operation planning and costing. As such, the forward looking costs incorporated here are inherently strongly correlated to current market conditions. Due to the ongoing COVID-19 pandemic, the currently global economic environment can charitably be described as ‘somewhat chaotic’, and any forward looking forecast based on such an environment carries increased risk.

The QP strongly recommends continued development and refinement of a robust life of operation cost model. In additional to further refinement of the cost model, the QP also recommends that close watch be kept on the economic environment with an eye toward continuous updates as the market environment continues to evolve.


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1.10.8Economics

The operation is forecast to generate positive cashflow during every year of the LoM plan in which it is pumping, or processing brine based on the production schedule, costs and process performance outlined in this report.

An economic sensitivity analysis indicates that the operation’s NPV is most sensitive to variations in commodity price, plant recovery and lithium grade.


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2Introduction

This TRS was prepared in accordance with the SEC S-K regulations (Title 17, Part 229, Items 601 and 1300 through 1305) for Albemarle by SRK on the Salar de Atacama. Associated lithium processing facilities at the La Negra operation are included in this report as they are critical to the production of a final, commercially salable product. Albemarle is 100% owner of the Salar de Atacama and La Negra operations.

2.1Terms of Reference and Purpose

The quality of information, conclusions, and estimates contained herein are consistent with the level of effort involved in SRK’s services, based on i) information available at the time of preparation and ii) the assumptions, conditions, and qualifications set forth in this report. This report is intended for use by Albemarle subject to the terms and conditions of its contract with SRK and relevant securities legislation. The contract permits Albemarle to file this report as a TRS pursuant to the SEC S-K regulations, more specifically Title 17, Subpart 229.600, item 601(b)(96) - TRS and Title 17, Subpart 229.1300 - Disclosure by Registrants Engaged in Mining Operations. Any other uses of this report by any third party is at that party’s sole risk. The responsibility for this disclosure remains with Albemarle.

The purpose of this TRS is to report mineral resources and mineral reserves for Salar de Atacama. This report is prepared to a pre-feasibility standard, as defined by S-K 1300.

The effective date of this report is August 31, 2021.

The report was amended to include additional clarifying information in December 2022. The basis of the report is unchanged. The changes and location in document are summarized as follows:

•Amended date added to title page

•Addition of historic price curve (16.1.4)

•Addition of notes on figures referencing tabular source data (Chapter 1.8, 1.9, 19.1.3, 19.1.4)

•Modified Summary Table for clarity (Chapter 19.2)

2.2Sources of Information

Reliance upon information provided by the registrant is listed in Section 25 where applicable.

2.3Details of Inspection

Table 2-1 summarizes the details of the personal inspections on the property by each qualified person or, if applicable, the reason why a personal inspection has not been completed.


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Table 2-1: Site Visits


Expertise	Date(s) of Visit	Details of Inspection	Reason Why a Personal Inspection Has Not Been Completed
Process	Several, most recent March 2017	Site visit with inspection of evaporation ponds, and La Negra plant and packaging area.
Resource and Mining	November 12&13 2021	Site visit with inspection of drillholes, production wells, packer testing, evaporation ponds, site facilities, laboratory, trucking facilities at the salar.

Source: SRK, 2021

2.4Report Version Update

The user of this document should ensure that this is the most recent TRS for the property.

This TRS is not an update of a previously filed TRS.

2.5Qualified Person


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3Property Description

The Salar de Atacama Basin is located in the commune of San Pedro de Atacama, with the Albemarle operations approximately 100 km to the south of this commune, in the extreme east of the Antofagasta Region and close to the border with the republics of Argentina and Bolivia, as shown in Figure 3-1. The communal area is 23,439 square kilometers (km2) and has an approximate population of 10,000 inhabitants, which are mainly distributed in the populated areas of San Pedro de Atacama, Toconao, Socaire and Peine.

Source: SRK, 2021

Figure 3-1: Location Map

In a regional context, the salar is located in a remote area with the nearest city, Calama, approximately 190 km by road to the northwest. The regional capital, Antofagasta, which also is located near the La Negra processing facilities, is located approximately 250 km, by road to the west.

3.1Property Area


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The CASEME concessions include 1,883 properties and the same number of hectares. The OMA concessions include 3,344 mining properties of 5 ha each, which corresponds to 16,720 ha. Figure 3-2 shows the location of the Albemarle concessions at the southern end of the Salar de Atacama (in pink), the rest of the OMA properties belonging to CORFO (in light blue) and the location of SQM's properties (in green) in the Salar.

Source: GWI, 2019

Figure 3-2: Albemarle Mining Claims in the Salar de Atacama

3.2Mineral Title

Albemarle’s predecessor’s initial contract with the Chilean government will remain in effect until the date on which it has produced and sold 200,000 t of LME, although the lithium can be produced in any of its forms, from the Salar de Atacama. As of August 31, 2021, the remaining amount of lithium from the initial contract equals approximately 78,038 t of LME. On November 25, 2016, CORFO and Albemarle entered into an annex to the initial agreement adding an additional 262,132 t LME to the total quota and setting an expiry for production of the quota of January 1, 2044 (i.e., any remaining


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quota after this date will be forfeited). As of August 31, 2021, the remaining amount of lithium from the second quota equals 262,132 t. Combined, as of the effective date of this TRS, August 31, 2021, Albemarle has a remaining quota of 340,170 t of LME, expiring January 1, 2044.

The size of the area at the Salar de Atacama covered by Albemarle’s OMA mining concessions (those relevant to the current reserve estimate) is approximately 16,700 ha. Table 3-1 describes these OMA concessions. Albemarle also currently owns the land on which the extraction facility at the Salar de Atacama and the processing facility at La Negra operate. However, the ownership of the land at the Salar de Atacama will revert to the Chilean government once all amounts of lithium remaining under Albemarle’s contract with the Chilean government are sold (the ownership of the land and fixed assets at La Negra will remain unchanged).

Section 17 of this report provides a summary of the existing environmental permits and under which Albemarle operates. The rights to use existing water and the agreements with the communities are also summarized.

Table 3-1: OMA Mining Concessions

Property of SCL

Page Number 07

Concession Name

National Role

Number

Properties

Hectares

230300007-3

Oma 1 Al 59820

2303-0007-0

3,344

16,720

Property of CORFO

Page Number 07

Concession Name

Pages

Number

Properties

Hectares

023011965-1

Oma 1 Al 59820

408

1,370

6,850

Source: GWI, 2019

In addition, to the mining properties located in the core of the Salar de Atacama, although not covering the area relevant to the resource and reserve reported herein, Albemarle has mining properties located in the extreme north of the Cordón de Lila called CASEME and LILA as shown in Table 3-2 and Figure 3-3.


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Table 3-2: Albemarle Mining Concessions


CASEME Mining Concessions
Property of SCL
Role Number	Concession name		Pages	Number	Properties	Hectares
023030381-9	Caseme uno 1 to 100		1464	1212	100	100
023030382-7	Caseme dos 1 al 100		1466	1213	100	100
023030383-5	Caseme tres 1 al 75		1468	1214	75	75
023030384-3	Caseme cuatro 1 al 100		1470	1215	100	100
023030385-1	Caseme cinco 1 al 97		1472	1216	97	97
023030386-K	Caseme seis 1 al 100		1474	1217	100	100
023030401-7	Caseme siete 1 al 100		1476	1218	100	100
023030402-5	Caseme ocho 1 al 100		1478	1219	100	100
023030388-6	Caseme nueve 1 al 95		1480	1220	95	95
023030389-4	Caseme diez 1 al 100		1482	1221	100	100
023030387-8	Caseme once 1 al 46		1484	1222	46	46
023030390-8	Caseme doce 1 al 90		1486	1223	90	90
023030391-6	Caseme trece 1 al 90		1488	1224	90	90
023030392-4	Caseme catorce 1 al 65		1490	1225	65	65
023030393-2	Caseme quince 1 al 90		1492	1226	90	90
023030394-0	Caseme dieciseis 1 al 20		1494	1227	20	20
023030395-9	Caseme diecisiete 1 al 90		1496	1228	90	90
023030396-7	Caseme dieciocho 1 al 90		1498	1229	90	90
023030397-5	Caseme diecinueve 1 al 90		1500	1230	90	90
023030398-3	Caseme veinte 1 al 90		1502	1231	90	90
023030399-1	Caseme veintiuno 1 al 65		1504	1232	65	65
023030400-9	Caseme veintidos 1 al 90		1506	1233	90	90
Totals					1,883	1,883
LILA Mining Concessions
Property of Albemarle LTDA
Role Number		Concession name	Pages	Number	Hectares
02303-B222-7		Lila 1	3146	2236	400
02303-B247-2		Lila 2	3148	2237	400
02303-B4998		Lila 3	3718	2579	400
02303-B241-3		Lila 4	3150	2238	300
02303-B5005		Lila 5	3720	2580	600
02303-B5013		Lila 6	3722	2581	600
02303-B243k		Lila 7	3152	2239	600
02303-B503k		Lila 8	3724	2582	600
02303-B225-1		Lila 9	3154	2240	600
02303-B245-6		Lila 10	3156	2241	600
02303-B5021		Lila 11	3726	2583	600
02303-B220-0		Lila 12	3158	2242	600
02303-B246-4		Lila 13	3160	2243	600
02303-B505-6		Lila 14	3728	2584	600
02303-B224-3		Lila 15	3162	2244	600
02303-B244-8		Lila 16	3164	2245	100
02303-B5048		Lila 17	3730	2585	400
02303-B221-9		Lila 18	3166	2246	600
02303-B248-0		Lila 19	3168	2247	600
02303-B5072		Lila 20	5311	3566	600
02303-B223-5		Lila 21	3170	2248	100

Source: GWI, 2019


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Source: Albemarle, 2019

Figure 3-3: Albemarle Mining Concessions

Since 2000 to date, numerous Environmental Impact Declarations and Environmental Impact Studies have been approved by the Environmental Assessment Service (SEA) for both the La Negra Plant and the El Salar Plant. In addition, 10 Pertinence Queries to the SEA have been entered. Albemarle has two wells located in the Tilopozo and Tucúcaro areas, both of which have groundwater rights.

3.3Royalties

As described above, CORFO owned the concessions in the Salar de Atacama prior to 1979, which are currently operated by Albemarle and SQM, under specific contracts with limits to lithium extraction in time and/or quantity. The role of the corporation in is to safeguard its rights in contracts and collect agreed payments, which it exercises through the Sistema de Empresas (SEP). In the case of ALB, only one royalty payment for potassium is contemplated since the usage of the concessions granted by CORFO was recognized as a contribution to the constitution of the initial company.


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The new agreement of Albemarle with CORFO adds an additional royalty payment to the state development agency, according to the sales price for both carbonate and lithium hydroxide. Table 3-3 presents this royalty schedule.

Table 3-3: CORFO Royalty Scheme for Albemarle in Atacama


Lithium Carbonate		Lithium Hydroxide
Price Range (USD/ton)	Progressive Commission Rate (%)	Price Range (USD/ton)	Progressive Commission Rate (%)
0-4,000	6.8%	0-4,000	6.8%
4,000-5,000	8%	4,000-5,000	8%
5,000-6,000	10%	5,000-6,000	10%
6,000-7,000	17%	6,000-9,000	17%
7,000-10,000	25%	9,000-11,000	25%
Over 10,000	40%	Over 11,000	40%

Source: CORFO, 2019

Albemarle also contributes 3.5% of its annual sales to the communities (Council of Atacameños Peoples -CPA) , which contributes to their development.


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4Accessibility, Climate and Infrastructure

The Salar del Atacama basin is located within the Pre-Andean Depression, limited to the east by the Andes Mountains and to the west by the Domeyko Mountains. While located within the Andes, the salar itself is completely flat over an extensive area. The elevation of the salar is approximately 2,300 meters above mean seal level (mamsl) and an area of approximately 3,500 km2. It has an elliptical surface with orientation from North to South and a slight slope towards the South. It is made up of 75% saline deposits that give it a rough surface.

The main climatic feature of the region is its great aridity. The most extreme aridity (in fact the driest location on earth) is located to the west of the salar, between the coastal range and the Andes, where there is no maritime influence. The extreme aridity in this intermediate zone and the scarce existing vegetation define a natural landscape known as the Atacama Desert.

The Salar de Atacama is located at an elevation of 2,000 and 3,500 mamsl. The climate is high altitude marginal desert, which presents a greater quantity and volume of rainfall in the summer months, between 20 and 60 millimeters per year (mm/y). The desert environment (low rainfall and high evaporation rates), combined with limited natural water courses, has resulted in the formation of numerous salars, among which the Salar de Atacama stands out for its extension.

Rainfall occurs mainly from January to March, as a result of the humidity transported from the Amazon basin (Bolivian winter) and to a lesser extent between April and August due to the displacement of cold fronts from Antarctica. The rainfall decreases from 300 mm/y in the Andes Mountains to about 10 to 20 mm/y in the Domeyko mountain range and on the Salar itself, with a statistical average of about 12 mm/y for the salar.

Maximum temperatures occur during the months of December to March, coinciding with the summer season and the minimum temperatures are seen in winter, between the months of June and August. The highest temperatures reach values close to 35 degrees Celsius (°C), while the minimum temperatures reach values close to -5°C in some cases. The average difference between the minimum and maximum temperatures is observed constant throughout the historical temperature series, having a value of approximately 20°C between day and night.

Evaporation also shows a seasonal variation, where the highest evaporation rates were measured in the months from December to February (summer) and the minimum values, between the months of June and August (winter). These results are consistent with the temperature variations between the different seasons of the year.

4.1Infrastructure

As a mature operation, adequate infrastructure is in place to support operations at both the Salar de Atacama and La Negra processing facilities. Infrastructure is described in detail in Section 14.

The La Negra facilities are located 20 km south-east of the city of Antofagasta, the regional capital, which has power, water, highway, airport and port facilities as well as adequate local population to support operations.

At the La Negra Plant, the purification of lithium brine, coming from the Salar Plant, is carried out for its subsequent conversion into Lithium Carbonate and Lithium Chloride. The following facilities are operating at the plant: boron removal plant, calcium and magnesium removal plant, lithium carbonate


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conversion plants, lithium chloride plant, evaporation-sedimentation pools, an off-site area where the raw materials are housed and the inputs used in the process are prepared, and a dry area where the different products are prepared.

The salar is located in a much more remote location, although existing road infrastructure is in place, as described in more detail below. The salar relies upon a camp to support workers, which are sourced regionally. In general, the Antofagasta/Calama region is a major mining hub with adequate support systems for both La Negra and the salar.

The infrastructure facilities at the salar are extraction wells, evaporation and concentration ponds, leaching plant 1 and 2, potash plant, drying plant, service area and general areas, including waste salts stockpiles. The service sector is made up of various buildings, such as: change room, dining room, administrative office building, operations building, and laboratory.

Road transport to/from the salar is important for the movement of supplies, personnel and consumables (e.g., reagents). In addition, the salar produces a concentrated brine (approximately 6% lithium) which must be transported to the La Negra facilities. This access is discussed in more detail below.

From Antofagasta, with the La Negra facilities located in this area, access to the Salar de Atacama basin is possible along the regional highway Route 5 North, which connects with the local B-385 route, which enters the basin from the west and the south of the salar, where the Albemarle operations are located. This is the primary transport route for concentrated brine from the salar to La Negra and is approximately 250 km by road. From Calama, access is via the regional highway 23-CH, which connects the city of Calama with the international Sico pass, on the border with Argentina. This route passes on the northern margin of the salar with access to the site again on the local B-385 route, passing along the eastern margin of the salar and entering to the south. The distance from the operation on the salar to Calama is around 190 km (Figure 4-1).

At the local level, the entrance to Albemarle's properties is located south of the communal territory of San Pedro de Atacama and is approximately 100 km, by road, away from this commune.


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Source: GWI, 2019

Figure 4-1: Property Access


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5History

In the early 1960s, William E. Rudolph, a geologist at Anaconda Company, conducted surveys in northern Chile for new water sources for the Chuquicamata operation and found water with high concentrations of salts in the Salar de Atacama Basin. In the mid-1960s, the report on the results of the brine obtained in the Salar de Atacama reached the hands of Foote Mineral Company. Later in 1970, these reports were also published in The Mining Journal of London and The Christian Science Monitor.

On August 13, 1980, CORFO signed an agreement with Foote Mineral Company (currently Albemarle US Inc) to develop a lithium project in the Salar de Atacama, on the OMA mining leases incorporated by CORFO in 1977.

In this context, Foote Mineral Company and CORFO created the Chilean Society of Limited Lithium (SCL) with a 55% and 45% stake in the share capital, respectively. The duration of the company was agreed in a term equal to that necessary to exploit, produce and sell the indicated amount of LME approved for extraction, i.e., 30 years, automatically renewable for successive terms of five years each. CORFO contributed to the company the OMA mining leases. This contribution was subject to the condition that such leases are returned free of charge and in full right to CORFO upon the fulfillment of the agreement.

Between 1988 and 1989, CORFO sold its 45% stake in SCL to Foote Mineral Company. In 1998 Chemetall purchased Foote Mineral Company, creating Chemetall-Foote Corporation. Subsequently, in 2004, Chemetall-Foote was acquired by Rockwood Lithium Inc., and in 2016, the latter was acquired by Albemarle US Inc, changing ownership of the Salar and La Negra Plants to Albemarle Ltda.

On November 25, 2016, CORFO and Albemarle US Inc. modified the original lithium production agreement through which its duration was modified, extending it and adding an additional 262,132 metric tons of production rights. This extension is valid until the original and expanded production rights have been exploited, processed, and sold, or January 1, 2044, whichever comes first.

In 1981, the first construction of evaporation ponds in the Salar de Atacama began. The following year, the construction of the Lithium Carbonate Plant in La Negra sector in Antofagasta began, which treats and transforms the concentrated brines, coming from the Salar Plant, into lithium carbonate and lithium chloride. A photograph of the first installations is provided in Figure 5-1.


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Source: GWI, 2019

Figure 5-1: Year 1980, First Installations

Initially, SCL constructed a solar pond system at the salar and a lithium carbonate plant with 6,350 million tonnes per year (Mt/y) of lithium carbonate capacity was constructed at La Negra. Production started in 1984. In 1990, the salar operations were expanded with a new well system and the capacity of the lithium carbonate plant at La Negra was expanded to approximately 11,000 t of lithium carbonate per year. In 1998, the lithium chloride plant started operating at La Negra. In the early 1990s potash also began to be recovered as a by-product from the sylvinite harvested from their solar ponds. Operations at the salar and La Negra have subsequently been expanded again and currently production rates are around 45,000 t per year of LCE (combined lithium carbonate and chloride). Further expansion work is currently in process (e.g., La Negra 3) to be able to achieve the increased production rate of 84,000 tonnes per year (t/y) LCE contemplated by the revised 2016 agreement between Albemarle and CORFO.


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6Geological Setting, Mineralization, and Deposit

6.1Regional, Local and Property Geology

6.1.1Regional Geology

As described in GWI, 2019:

The geological history of the Salar de Atacama basin is summarized in Munk et al. (2016) and references within the regional geological map (i.e., Niemeyer, 2013) (Figure 6-1). Sedimentary, volcanic and plutonic rocks indicate the basin was positioned along the western margin of Gondwana during the Paleozoic. During the Jurassic and early Cretaceous this region was an extensional backarc basin, with inversion and basin scale tectonic subsidence initiating in the late Cretaceous. This continental backarc setting persisted through the Paleogene, transitioning to a forearc basin in the Neogene. Uplift and predominantly clastic deposition have been ongoing since the Cretaceous, and during the Plio-Pleistocene thick halite deposits accumulated in the center of the basin.

Details of the Cenozoic geologic history highlight several relevant observations in the Salar. A foreland basin originated in the mid-Cretaceous, with thrusting and coeval sedimentation occurring during the Cretaceous and Paleogene (Arriagada et al., 2006). During the Oligocene-early Miocene, normal faulting controlled the western margin of the basin, accommodating thousands of m of strata (Jordan et al., 2007). Most of this sedimentation was accommodated by a normal fault along the western basin margin that generated as much as 6 km of vertical displacement (Pananont et al., 2004).

From approximately 12 Ma onward the volcanic arc was established east of the Salar and shortening resumed, uplifting the intrabasinal Cordillera de la Sal and later resulting in development of blind thrust faults within the basin (Jordan et al., 2007). A number of late Miocene and Pliocene ignimbrites derived from calderas on the plateau can be traced westward into the subsurface of the Atacama basin. These ignimbrites interfinger with Plio-Pleistocene evaporite deposits that are typically 1 km thick and establish the age of these strata as Plio-Pleistocene. In the southern portion of the salar these deposits are offset by the Salar Fault System (SFS), which exhibits close to one km of down-to-the-east offset on a reverse fault (Jordan et al., 2002b).

Several aspects of the geological history are relevant to the generation of lithium rich brine in the Salar. For example, there are a number of fault systems with km scale offsets that may be preferential flow paths for fluids. During the Miocene and Pliocene, several voluminous ignimbrite pulses related to development of the large Altiplano-Puna volcanic complex (APVC) indicate major magmatic activity to the east on the plateau (Salisbury et al., 2011). It is possible that this volcanism is intimately related to late Miocene uplift of the plateau via lower crustal delamination (cf. Hoke and Garzione, 2008).

If large scale tectonic factors play a role in the generation of lithium brines these processes might be relevant to generation of the lithium enriched brine in the Salar, particularly if the mantle is considered the ultimate source of lithium to brines. Crustal scale faults within the Atacama basin itself are not necessarily good candidates for communication between the mantle and brine aquifers in light of the fact that the lithosphere below the Atacama basin is widely believed to be a cold, rigid block on the basis of seismological data (Schurr and Rietbrock, 2004).


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Source: Carta Geologica de Chile No 54. Hoja Toconao (1:250.000), Hoja Cordon de Lila- Peine (1:100.000). Modified from IIG 1982 by Vai 2021. (UTM WGS84 HUSO 19S)

Figure 6-1: Regional Geology Map


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6.1.2Local Geology

As described in GWI, 2019

The salar basin is divided into two distinct morphological zones. In the north, the eastern slope is characterized by monoclinal folding blanketed by thick ignimbrite deposits and alluvial fans (e.g., Reutter et al., 2006; Jordan et al., 2010). To the south, a series of large fold and thrust belts form a series of ridges and troughs that delineate sedimentary deposition and groundwater flow (Ramirez and Gardeweg, 1982; Aron et al., 2008). Alluvial fans around the salar are important for transporting fluid to the marginal zones (Mather and Hartley, 2005), but large aquifer systems are not well defined. The largest aquifer is the Monturaqui-Negrillar-Tilopozo (MNT) system in the south. Unwelded to moderately welded ignimbrites in the basin have high infiltration capacity and permeability, while welded ignimbrites may act as confining units (Lameli, 2011; Houston, 2009).

Recent and ongoing work on a set of sediment cores from the south part of the basin and the halite nucleus indicate a complex hydrostratigraphy of sand and gravel, ash and ignimbrite and evaporites (Munk et al., 2014). The low permeability Peine block (Lameli, 2011) diverts groundwater flow to the north and south, while the zone of monoclinal folding is expected to be more conducive to regional groundwater flow based on laterally extensive strata dipping towards the salar (Jordan et al., 2002a, 2002b). The blind, high-angle, down-to-the-east north-south trending reverse SFS, which cuts across the salar, accommodates over 1 km of offset basin fill strata (Jordan et al., 2007; Lowenstein et al., 2003).

The southeastern slope of the Salar, south of the Tumisa volcano and east of the Cordon de Lila, is bounded to the southwest by the MNT trough, a 60 km long N–S oriented depression bounded to the east by the Toloncha fault (Aron et al., 2008). This trough contains several folds and thrust belts including the prominent Tilocalar ridge. The Miscanti fault and fold to the east separates the basin from the Andes and controls the development of the intra-arc Miñiques and Miscanti lakes (Rissmann et al., 2015; Aron et al., 2008). A large lithospheric block of Paleozoic rock, bounded by the N-S trending Toloncha Fault System and Peine fault is interposed in the center of the southeastern slope forming a major hydrogeologic feature that likely diverts groundwater as well as generally restricting groundwater flow through this zone (Breitkreuz, 1995; Jordan et al., 2002a; Ruetter et al., 2006; Gonzalez et al., 2009; Boutt et al., 2018).

The fold and thrust belt architecture of the basin slope is responsible for the development of several other thrust fault systems of varying depths and length but which generally trend N-S, parallel to the salt pan margin. These faults are thought to be major conduits for groundwater flow to the surface as evidenced by the spring complexes emerging along or in the immediate vicinity of these fault zones (Aron et al., 2008; Jordan et al., 2002b).

6.1.3Property Geology

As described in GWI, 2019

Salar basin fill materials are dominated by the Vilama Formation and modern evaporite and clastic materials currently being deposited in the basin. A detailed stratigraphy of the Salar basin is published in Lin et al. (2016). In the Albemarle operation area, the Vilama Formation is up to approximately 1 km thick and is host to the production aquifer system. The formation is composed of evaporite chemical sedimentary rocks including intervals of carbonate, gypsum and halite


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punctuated by sedimentary volcanic deposits of large ignimbrite sheets, volcanic ashes and minor clastic deposits. These deposits are best observed in outcrop along the salar margin and in drill cores from the Albemarle project site.

In the Tilocalar Peninsula region, younger lacustrine carbonates (approximately 435 ka from Lin et al., 2016) of the El Tambo formation unconformably overlie the Tucucaro ignimbrite. These two geologic units are folded and faulted along north-south trending fault-cored reverse faults. The youngest geologic deposits in the project area are the modern evaporite (halite) and clastic sediments (primarily clay and windblown silt) being deposited today through processes of evaporation and physical sedimentation. In the southern part of the project area these deposits are dominated by carbonate and gypsum, which are deposited as solute-rich inflow waters are evaporated in the transition zone.

The salar margin on the east side of the Cordon de Lila is characterized by the 3.1 Ma Tucucaro ignimbrite. The ignimbrite unconformably overlies either the bedrock of the Cordon de Lila or older salar lacustrine sediments, as seen along the margins of the Cordon de Lila and of the Chepica Peninsula.

The Chepica Peninsula is another prominent geologic feature within the Albemarle concessions. It consists of the Tucucaro ignimbrite overlying gypsum and carbonate lacustrine sediments.

Similar geologic features and exposures occur to the south of the Chepica Peninsula on the north part of the Cordon de Lila.

SRK and Albemarle defined lithostratigraphic units for the salar deposits based on numerous diamond drill holes and outcrop observations. These are classified in terms of their general rock type (clastic, evaporite, volcanic) as well as textures.

Generalized geologic cross sections were developed across the Albemarle concessions with the locations shown in plan view on Figure 6-3. Section A-A’ (Figure 6-3) is oriented north south on the east side of the Cordon de Lila and extends through the transition zone and the nucleus. Section B-B’ (Figure 6-3) is orientated east west though the nucleus, transition zone, and eastern sedimentary units. Confirmation in drill holes is limited to the upper 150 m, and in many cases to 30 to 50 m. Consequently, interpretations and interpolations were made with high resolution seismic, general geology, and structures observed in outcrop. These cross sections were used in addition to several other sections to build the geologic and hydrostratigraphic models discussed in Sections 11.1.4.


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Source: SRK, 2021

Figure 6-2: Generalized Conceptual Geologic Plan View Along a N-S Transect


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Note: VGC. Volcanic, Gypsum and Clastic sequences

Source: SRK, 2021

Figure 6-3: Generalized Conceptual Geologic Cross Sections Along a N-S Transect

6.2Mineral Deposit

The Salar is located in the Central Andes of Chile, a region which is host to some of the most prolific Li brine deposits in the world. The Central Andean Plateau and the Atacama Desert are two important physiographic features that contribute to the generation of Li brines in the Central Andes. In these environments, the combination of hyper-arid climate, closed basins, volcanism, and hydrothermal activity has led to extensive deposition of evaporite deposits since approximately 15 Ma (Alonso et al., 1991). The extreme size and longevity of these closed basins is favorable for Li brines generation, particularly where thick evaporite deposits (halite, gypsum and less commonly borates) have removed ions from solution and further concentrated Li. A general overview of the geology and mineral resources of Central Andean salars can be found in Ericksen et al. (1990).

The Salar occurs in the plateau margin basin of a volcanic arc setting and active subsidence in the basin is driven by transtenion and orogenic loading. The Li-rich brine at Salar contains on average 1,400 mg/L Li with a minimum of 900 mg/L and a maximum of nearly 7,000 mg/L. Li appears to be sourced from weathering of the basin geology, the Andean arc and the Altiplano-Puna plateau, which is transported into the closed basin where it is concentrated by evapotranspiration (Munk et al., 2018).

Li-rich brines are produced from a halite aquifer within the Salar nucleus. Carbonate and sulfate flank the basin and indicate that carbonate and sulfate mineral precipitation may have played a role in producing the brine. In addition to the evaporative concentration processes, the distillation of Li from geothermal heating of fluids may further concentrate Li in these brines and provide prolonged replenishment of brines that are in production. Since many Li-rich brines exist over, or in close proximity to, relatively shallow magma chambers, the late-stage magmatic fluids and vapors may have pathways through faults and fractures to migrate into the closed basin.

Waters in the Salar basin and the adjacent Andean arc vary in Li concentration from approximately 0.05 to 5 mg/L in the Andean inflow waters, 5 to 100 mg/L Li in shallow groundwaters in the south and east flanks of the basin and in excess of 5,000 mg/L in brines (Munk et al., 2018). This indicates


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that the Li-rich brine in the basin is concentrated by up to five orders of magnitude compared to water entering the basin. This is a unique hydrogeochemical circumstance to the Salar compared to other Li brine systems. Ultimately, it is the combination of Li concentrations, the overall geochemical character of the brine and the accessibility of the brine for production that have led to the optimal conditions for producing Li-enriched brine in the Salar.

6.3Stratigraphic Column and Local Geology Cross-Section

Geological Units Definitions

Upper Halite (H1 and H2)

This unit is dominated by halite sequences and represents the main upper aquifer in the salar. The deposit environment in the eastern side of the nucleus is dominated by evaporite systems with an inflow component, which in turn enhances dissolution. Conversely, in the western side show a more evaporitic system, where the inflow factor is less significant. The fine clastic component of this unit increases towards the west. Generally, the upper halite unit is permeable to depths of up to 50 m, however, in the southeastern part of the Salar, this unit can reach depths of over 100 m.

Lower Halite

This unit is located below the Upper Halite in almost the entire salar. It corresponds to compacted sequences of halite, gypsum, and fine clastic materials. This unit likely extends to depths greater than 1,000 m in the halite nucleus and exhibits a significantly lower permeability and porosity than the Upper Halite.

Ignimbrite

This unit comprises the extensive volcanic ignimbrite deposits found at the surface and subsurface throughout the region. It was formed through multiple eruptive events and may be locally welded, unwelded, fractured, with its thickness and presence varying from a few centimeters to 10’s of meters throughout the region. Data suggests this fracturing (permeability and porosity) is a key factor in the Li brine system. The main outcrops can be found in Chepica and Tilcolar peninsulas with depth varying from surface to 250m. The ignimbrite footprint is well understood in the vicinity of the mine operations and exploration areas however, drill data observations indicated the presence of various ash sequences with similar properties throughout the salar.

VGC (Volcanic Gypsum and Clastic)

This unit consists of sequences of weathered Ignimbrite, Gypsum, Ash layers, various clastic units and clays layers. It is well recognized in the southern portion of the of Salar with porosity and permeability decreasing with depth related to compaction and chemical alteration.

Marginal Cordon de Lila Clastic Aquifer

This unit is composed of interbedded sands, gravels, and local carbonates generally occurring along the margin of the of the Cordon de Lila. This unit is limited to a maximum depth of 100 m which can vary in depth and thickness related to faulting and/or alluvial fan geometry. Permeability is primarily controlled by porosity associated with bedding plane fractures and vuggy carbonate layers. This unit was subdivided into the Upper and Lower Clastic based on material composition.


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The Upper Clastic consists of gravel, sand, and clays sequences with some halite lenses. The Lower Clastic consist of clay, sand, halite, and gypsum with the occurrence of anhydrite in some areas

Transition Zone

This unit occurs along the eastern northern, and southern border of the nucleus, east of the Tilocalar ridge. It is composed of laminated, vuggy freshwater carbonates from spring discharge, and localized precipitation in lagoons. The primary lithology is gypsum, clays, and carbonates with the highest permeability encountered within 10 m of the surface. Permeability heavily impacted by the presence of the freshwater-brine transition zone and secondary porosity enhancement. Deeper sequences have lower permeability and porosity due to compaction and chemical alteration. This is an important aquitard in the deeper transition zone with thicknesses up to 200m in the southern portion of the salar.

Marginal Clastic Aquifer

This unit represents the alluvial and fluvial deposits of varying ages surrounding the salar. These deposits are undifferentiated in the model, however, can be divided into eastern and western units (East Sediments and West Sediments). Permeability is dominated by primary porosity and depositional processes.

A stratigraphic column of the in Albemarle claim area is shown in Figure 6-4 representing the southwest, adjacent to the chepica Peninsula, and eastern portions of the local geologic model. The local geology is shown in plan view and cross sections in Figure 6-5 and Figure 6-6 respectively.

Source: Albemarle 2020

Notes:

Southwest stratigraphic column represents the southwestern side of the area A1.

Peninsula Chepica stratigraphic column represent the area A1 in the north of Peninsula Chepica

East (A3) stratigraphic column represent the area A3

Figure 6-4: Stratigraphic Column in Albemarle Property


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Source: SRK 2021

Figure 6-5: Local Geology Plan View


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Source: SRK 2021

Note: VGC (Volcanic Gypsum and Clastic)

Figure 6-6: Local Geology Cross Sections


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7Exploration

7.1Exploration Work (Other Than Drilling)

A number of geophysical surveys have been conducted within the claims areas as well as within the salar to evaluate continuity of lithologic units and changes in brine salinity. Downhole geophysical surveys have been conducted in various boreholes to evaluate the permeability of sediments and evaporites in addition to Nuclear Magnetic Resonance (NMR) surveys to evaluate the porosity of the sediments. Figure 7-1 shows the locations of the various geophysical surveys that have been conducted for the site with a summary of the work outlined in Table 7-1.

Source: GWI, 2019

Figure 7-1: Location of Exploration at the Albemarle Atacama

Table 7-1: Summary of Exploration Work


Exploration Technique	Number	Meters
TEM and Nanotem Lines	15	93,500
Seismic Reflection Lines	7	39,870
Well Geophysical Records	25	2,000
NMR Records	36	4,348
Deep Pumping Tests	10	-

Source: Albemarle, 2019


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7.1.1Transient Electromagnetic Survey (TEM)

In 2017, Albemarle commissioned Geodatos (Geodatos, 2017) to determine the geoelectric characteristics of the subsurface by acquiring additional knowledge of the stratigraphic variations, both laterally and vertically, of the different lithologies present. Furthermore, the study was intended to determine the relative variations in porosity of the saturated strata, these being directly related to the variations in electrical resistivity.

The acquisition of TEM data was performed for 19 days in the period from November 24, 2016 to January 12, 2017 and NanoTEM for 26 days in the period from November 24, 2016 to January 12, 2017. The location of the measurement lines of both methodologies is shown in Figure 7-1.

The number of stations and lines, the spacing and the type of loop used are detailed below:

•Electromagnetic Transient, 234 stations were measured on 15 lines, the spacing between stations being approximately 400 m. TEM soundings were measured with Coincident Loop Tx = Rx of 100x100 m2.

•Electromagnetic Nano Transient, 467 stations were measured on 15 lines, the spacing between stations being approximately 200 m. The NanoTEM soundings were measured with a Central Loop of Tx = 50x50 m2 and Rx = 10x10 m2.

Figure 7-2 shows an example of the result of a TEM profile, the trace of which is shown in red on the lower map, made in the North of the study area.

Source: GWI, 2019

Figure 7-2: Example of Results from the Geophysical Profile TEM


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The interpretation of the results, as well as the assignment of hydrogeological units to each of the identified geoelectric units is discussed in more detail in Chapter 6.

7.1.2Seismic Reflection

In 2018, Albemarle commissioned Wellfield Services Ltda. to carry out a seismic study in the southern portion of Salar de Atacama, specifically on the Albemarle mining concession in this area, in order to characterize the geology. This study includes the application of the Seismic Reflection technique, with a vibratory energy source for accessible areas of relatively flat terrain (Wellfield Services, 2019).

The topography work began on October 11, 2018 and ended on February 13, 2019. The seismic record begins on November 18, 2018 and ends on February 14, 2019. The seismic survey considered seven seismic lines whose locations are shown in Figure 7-2.

The horizons generated in the sequence present a good intensity and resolution, being able to distinguish horizontal and vertical events both at the level of the stack in the two dimensional (2D) lines.

Reflection Seismic results were used to define the limits several hydrogeological units. In particular, the bottom of the upper halite, which represents the main aquifer in Albemarle property.

7.1.3Borehole Geophysics

During the 2017 and 2018 drilling campaign, downhole geophysical logging was carried out in 26 boreholes over a total lithological column recorded of approximately 2,000 m.

Geophysical logging was carried out using the following probes:

•Caliper (one probe)

•Natural Gamma, SP, SPR, Resistivity 16/64 (one probe)

•Temperature, Fluid conductivity (one probe)

Use of several of these probes require that the holes should not be lined with pipes. Because the surveys were made during drilling, a complete record is not always found because it was necessary to leave certain footage with casing as protection against possible instabilities of the borehole walls.

An example is shown in Figure 7-3 of the measurement results of a well with the different parameters measured in the field.


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Source: GWI, 2019

Figure 7-3: Example of Geophysical Log in Well CLO-100


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The results of the well geophysical logging were considered in the interpretation of the lithological column along with the mapping of the lithology. The combination of these inputs served as the criteria for definition of hydrostratigraphic units represented in the three-dimensional model described in Chapter 6.

7.1.4Nuclear Magnetic Resistance (NMR)

In 2018, Albemarle entrusted the acquisition of geophysical records with nuclear magnetic resonance and gamma rays to the company Zelandez (2019) in conjunction with the company Suez Medioambiente Chile SA. Suez staff operated the equipment in the field while Zelandez supplied the equipment and guidance. In total, NMR surveys were conducted in 36 wells over 26 days, with a total length of 4,348 m tested

The processing and interpretation of the data was carried out remotely within 24 h after acquisition. In all wells, the acquisition of magnetic resonance data of the well was performed satisfactorily, obtaining high quality data. The only drawback found was the influence of the well fluid signal in various wells, it affected the data in these intervals and could not be corrected.

The interpretation of the data has made it possible to group the records by type of well, assigning common characteristics to each group related to the hydrogeological environment in which they are found. In summary, the interpretation of these data has served to identify lithological changes and lithologies, and also to determine the porosity of the terrain.

7.1.5Significant Results and Interpretation

SRK notes that this property is not at an early stage of exploration and is well-understood from previous exploration and current production. The results and interpretation from exploration data is supported in more detail by extensive drilling and active pumping from production wells over the course of more than 35 years of production. The aforementioned data have been interpreted together with the data from the core logging to develop the 3D hydrostratigraphic model described in Chapter 6.

7.2Exploration Drilling

Drilling at Salar de Atacama has been ongoing since 1974. Drilling has been primarily for production wells with limited drilling dedicated to exploration of other areas within the claims.

7.2.1Drilling Type and Extent

In the process of drilling wells to study resources and reserves, three different methods have been used in order to obtain information for the study. The types of equipment used, and their characteristics of use are indicated below:

•Cable Tool Drilling: Used to define the geology, obtain brine samples and perform pumping tests. Wells were used as monitoring points of water levels and for brine sampling.

•Diamond Drilling: Used to define the geology in depth and obtain drill cores, establish fracture zones in the vertical, perform packer tests, well geophysics measurements and finally they are enabled as hydrogeological control wells for level measurement.

•Rotary Drilling: Used to carry out pile driving of hydraulic tests in depth (airlift) establishing an indicative flow value for exploration and research and also to obtain brine samples in


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depth evaluating the chemical changes of each well. In stable drilling areas, it was used to widen test wells for pumping and hydraulic evaluation of each sector.

•Dual-Rotary Drilling: Used in areas of high geological complexity where the stability of the land did not allow the use of rotary equipment. With this equipment, the expansion was carried out for production wells, isolating areas of different aquifers and different chemists to avoid salting the wells.

7.2.2Historical Drilling

The first exploration campaign was completed from 1974 to 1979 (Foote Mineral Company, 1979). Initially, 50 shallow pits were dug to below the brine level. The first two pumping wells were drilled and tested in 1975 (CL-1 and CL-2).

In June 1977, an exploration program designed to define the distribution of lithium over the entire salar was undertaken. The drilling program can be summarized as follows:

•A total of 32 exploration holes about 2 inches in diameter with depths ranging from 2.6 to 4.6 m

•Four 6-inch exploration holes from 25 m to 185 m depth (CL-3, CL-4, CL-5, and CL-8)

•Four 12-inch diameter wells from 20 to 30 m depth (CL-6, CL-7, CL-9 and CL-10)

Finally, in 1979, 15 6-inch exploration wells were drilled in Chepica Peninsula area (CL-11 to CL-20) and in the south of the southwestern arm of the salar (S1-S5) (Figure 7-4). Upon completion of the drilling program, all the producing wells were subjected to pumping tests.

Few data regarding the drilling campaigns from 1980 to 2016 was available from Rockwood. However, Albemarle informed them that at least 27 wells and 20 piezometers were drilled from 2013 to 2016, no further details were obtained.

The geological information obtained in the historical campaign were not used directly for the resource and reserve model. Drilling campaigns in 2017 to 2019 have significant more coverage of the salar and this data was used for geological log interpretation.


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Source: SRK 2021 (modified from Foote Mineral Company, 1979)

Figure 7-4: Map of Location of Wells Drilled During 1974 to 1979 Campaigns

2017 and 2018-2019 Drilling Campaigns

Two drilling campaigns were carried out in order to obtain geological and hydrogeological information in the Albemarle mining concession. The following are the campaigns completed:

•The 2017 campaign started in January 2017 and ended in September 2017. This campaign was conducted by Geosud.

•The 2018 to 2019 campaign started in April 2018 and ended in February 2019. This campaign was conducted by Geotec.

Table 7-2 shows the number of wells along with meters drilled by each method for the 2017 and 2019 drilling campaigns.

Table 7-2: 2017 through 2019 Drilling Types and Meters


Type of System	Number of Wells (2017)	Number of Meters Drilled (2017)	Number of Wells (2019)	Number of Meters Drilled (2019)
Core Drilling	21	3,970.5	11	1,511
Rotary Drilling	9	1,148	15	2,638.15
Pumping Test	-	-	10	927

Source: GWI, 2019


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Between 2017 and 2019, two specific drilling campaigns were carried out in order to obtain data on the geology of the terrain and its hydraulic properties in order to improve the existing hydro-stratigraphic model that was used in the Environmental Assessment at the time, which gave rise to the RCA N°021/2016 agreement with the Chilean government .

The drill holes are mainly located in the Albemarle mining concession (Figure 7-5) but some are located in the southeast part of the salar, in the Marginal Zone where the Peine and La Punta Brava lagoon systems are located. In this area, even though it is outside the mining concession, it has been necessary to update the hydrostratigraphic model so that information is consistent with that existing in the Nucleus.

Source: GWI, 2019

Figure 7-5: Location Map of Reverse Circulation and Core Drilling Considered to Update the Hydrostratigraphic Model

7.2.3Drilling Results and Interpretation

The drilling supporting the MRE has been conducted by several contractors, that in SRK’s opinion, utilized industry standard techniques and procedures. The database used for this technical report includes 186 holes drilled directly on the Property, 82 exploration holes and 104 production wells. Drillhole collar locations, downhole surveys, geological logs, and assays have been verified and


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used to build a 3D geological model and in grade interpolations. Geologic interpretation is based on structure, lithology, and alteration as logged in the drillholes.

In SRK’s opinion, the drilling operations were conducted by professional contractors using industry standard practices to achieve representativity with the sample data. SRK is not aware of any material factors that would affect the accuracy and reliability of the results from drilling and associated sampling and recovery. Therefore, in SRK’s opinion, the drilling is sufficient to support an MRE.

7.3Hydrogeology

Hydraulic tests have been conducted since the very beginning of the Salar de Atacama exploration campaigns. Pumping tests started in the well CL-1 in 1975. However, not all the hydraulic tests have been adequately recorded in terms of methodology and interpretations. The 2016, 2018 and 2019 field test campaigns were conducted in old and new production wells to have a better estimate of the hydraulic properties of the aquifers within Albemarle property.

7.3.12016 Campaign

In the 2016 campaign, 12 brine production wells were installed in A1 (CL-70, CL-71, CL-72, CL-73, CL-74, CL-75, CL-76, CL-77, CL- 78, CL-79, CL-80 and CL-81) along with six shallow observation wells distributed throughout the same area (CLO-73.1, CLO-74.1, CLO-75.1 and CLO-76.1), all of them drilled to a depth of 30 m and two 101 m deep observation wells (PE-01 and PE-02).

Pumping tests were carried out in the 12 production wells and Lefranc-type permeability tests were conducted every 10 m in the two deep observation wells (PE-01 and PE-02).

The 2016 drilling campaign report (Aquist, 2016) presents the hydraulic parameters obtained from the interpretation of the aforementioned hydraulic tests, as well as a compilation of background information from previous campaigns. Figure 7-6 and Figure 7-7 show the locations of the production and observation wells, respectively.


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Source: Aquist, 2016

Figure 7-6: Location of the Production Wells Drilled, 2013 Through 2016 Campaigns


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Source: Aquist, 2016

Figure 7-7: Location of Observation Wells or Piezometers Drilled in the 2013 through 2016 Campaigns


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7.3.22018 - 2019 Testing Campaign

Between October 2018 and June 2019, long-term pumping tests were carried out in 10 deep wells (deeper than 50 m) that had been drilled in 2008 and distributed in the A1, A2, and A3 claim areas: eight tests were carried out in the Chépica Oeste sector of A1, one test north of A2 and one south of A3, near the Salar de Atacama Marginal Zone (Figure 7-8).

The main objectives of the long-term pumping tests were the following:

•Evaluate if there is a differentiated deep aquifer and if it is connected to the surface aquifer

•Evaluate the type of aquifer and characterize the hydraulic parameters of the deep aquifer

A shallow well that is up to 20 m deep and a deep well with characteristics similar to the pumping well, both at a distance of 10 to 30 m from the pumping well, were drilled on the same platform of the pumping well. These were used as observation wells during the pumping tests. The shallow well was used to determine whether the pumping in the deep aquifer produces any effect in the upper part of the aquifer and the deep well was used to calculate hydraulic parameters in the lower part of the aquifer.

Source: GWI, 2019

Figure 7-8: Location Map of the Long-Term Pumping Tests: Deep Pumping Wells


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Pumping Tests Design

Up to three pumping tests were carried out in each pumping well: a first trial of trial of one-hour duration, a second of staggered flow between three hours and four hours in duration and a third test at constant flow for seven days. Where a flow rate greater than 5 L/s could not be extracted, only trial and error and constant flow tests were conducted. Where a flow rate larger than 5 L/s could be maintained, the three tests were carried out. After each test, recovery was monitored.

During the constant flow pumping tests, four brine samples were collected to determine if there is a chemical evolution during the duration of pumping.

7.3.3Packer Testing Campaign

Albemarle requested that Suez Medio Ambiente Chile SA and Solexperts SA carry out an exploration project using a system of inflatable shutters (packers) in wells in Salar de Atacama (Suez, 2019).

The tests were carried out in seven wells distributed along areas A1, A2 and A3 in 2018 (Figure 7-9).

Source: Suez, 2019

Figure 7-9: Map of the Location of the Wells Tested by the Double Packer System (DPS)

This type of hydraulic test allows for obtaining hydraulic parameters at specific depth intervals, by means of two packers that individualize the section to be tested from the rest of the vertical well column. In this way, the permeability (K) and transmissivity (T) of a given geological formation can be characterized and/or representative brine samples can be extracted from specific depths of the aquifer.


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The execution of the DPS tests was carried out by the company Suez Medio Ambiente Chile SA and Solexperts SA in two campaigns: July 2018 and October-November 2018.

The hydraulic parameters from the packer tests were obtained using the AquiferTest software (Waterloo Hydrogeologic, 2016).

Each of the companies that acquired the exploration data generated a report describing the details of the work carried out, the methods used for processing the data, and the conclusions.

The data were reviewed by the Albemarle hydrogeology team and subsequently provided to SRK.

7.3.4Pumping Test Re-Analysis by SRK in 2020

The long-term constant rate pumping tests were initially analyzed to evaluate the aquifer properties specified in the objectives above, but test results were deemed inadequate due to the analysis assumptions and the aquifer conditions provided. The tests were then re-analyzed by SRK in the summer of 2020 using the analytical software AQTESOLV™ (HydroSOLVE, 2008).

Results varied by analysis since each method makes different assumptions and is subject to interpretation. Some challenges were encountered when analyzing the pumping tests and resulted in a lower level of confidence of the estimated hydraulic parameters. For example, discrete hydraulic parameters from the upper observational wells could not be calculated due to the nature of the analysis methods and the largely heterogeneous aquifer conditions. Instead, only general conditions could be implied, such as the propensity for a vertical hydraulic connection between two aquifers separated by a semi-confining unit.

A conceptual hydrogeologic setting of the test sites were developed with the analysis and diagnosis of the data provided. These include the following assumptions or characteristics of the aquifers:

•Most tests probably took place in partially confined conditions.

•Derivative analysis indicates possible leaky, locally confining aquitards and/or constant head boundary conditions (facies changes, cordillera) in some cases.

•Aquifer was not stressed long enough to transition to delayed yield.

•Leaky confined conditions observe storage influence from connected systems, inflecting storage parameters. Reliable Sy values from 4.9% to 13.0%.

•Leaky confined systems do calculate vertical hydraulic conductivity of the aquitard (K’), but it is often unconfirmed by upper well response.

•Deep aquifer shows small variation in the transmissivity values calculated by Albemarle in 2019.

•Reliable calculated hydraulic conductivity values range from 1.1 to 4.6 meters per day (m/d) in sequences of gravel, ignimbrite, and sands; average 0.26 m/d in sequences of gypsum and ash; and range from 2.9 to 3.4 m/d in layers of ash, evaporites, and gypsum.

7.3.5Data Summary

The hydrogeological data described in the previous chapters are summarized in Table 7-3, as measured values within Albemarle property.


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Table 7-3: Summary of Measured Hydraulic Parameters within the Albemarle Property


Hydrogeologic Unit	Hydraulic Conductivity (K) in m/d					Specific Yield (Sy)
	#	Average	Maximum	Minimum	GeoMean	#	Average	Maximum	Minimum
Upper Halite and Others	18	56.9	380	0.30	16.6	9	1.1E-01	2.0E-01	1.0E-02
Upper Halite	55	324	5633	2.8E-05	0.83	6	1.7E-01	5.5E-01	2.9E-02
Lower Halite	4	4.9E-03	9.2E-03	5.9E-05	1.9E-03	0	-	-	-
Upper Clastic	9	54	188	0.37	7.4	5	1.0E-01	1.0E-01	1.5E-03
Lower Clastic	1	4.6	4.6	4.6	4.6	1	5.0E-01	5.0E-01	5.0E-01
Volcanic/Gypsum/Clastic	15	13.1	86.4	5.2E-03	1.1	9	1.3E-01	1.3E-01	3.7E-03

Source: SRK 2021

Additional information on hydraulic properties outside of the Albemarle property is available from the governmental agency CORFO (SGA, 2015 and Amphos21, 2018) and the SQM environmental report (SQM, 2020). This data was used as a reference to construct the dynamic groundwater model as described in Section 12. Table 7-4 shows a summary of the measured hydraulic properties outside of the Albemarle property.

Table 7-4: Summary of Hydraulic Properties Outside of the Albemarle Property


	Hydraulic Conductivity (K) in m/d					Specific Yield (Sy)
Hydrogeologic Unit	#	Average	Maximum	Minimum	GeoMean	#	Average	Maximum	Minimum
Upper Halite and Others	10	14.2	111	6.0E-03	0.9	2	6.6E-02	9.1E-02	4.0E-02
Upper Halite and Others (Regional)	54	11	200	9.0E-03	1.55	4	1.1E-01	3.4E-01	4.0E-03
Upper Halite	85	23.7	500	5.0E-03	1.07	12	1.0E-01	2.4E-01	1.4E-02
Upper Halite (Regional)	400	168	6000	6.0E-04	3.59	43	8.7E-02	5.5E-01	6.4E-03
Lower Halite	4	0.23	0.7	3.0E-02	0.11	1	3.2E-01	3.2E-01	3.2E-01
Lower Halite (Regional)	24	10.9	111	3.2E-03	1.96	1	4.1E-01	4.1E-01	4.1E-01
Upper Clastic	1	5	5	5	5	0	-	-	-
Lower Clastic	3	4.3	8	0.90	3.07	0	-	-	-
Volcanic/Gypsum/Clastic	7	0.75	4	2.0E-02	0.23	4	2.9E-01	5.6E-01	9.8E-03
Volcanic/Gypsum/Clastic (Regional)	32	0.49	5.18	4.0E-03	0.15	17	1.7E-01	5.2E-01	2.6E-03
Ignimbrite	6	25.6	71.9	0.32	5.92	0	-	-	-
Sediment East	17	15.1	30	1	11.68	3	3.2E-03	6.0E-03	1.4E-03
Sediment West	3	0.36	0.75	2.1E-02	0.17	0	-	-	-
Transition	51	125	3000	9.9E-04	3.10	0	-	-	-

Source: SRK 2021

7.4Brine Sampling

In the early stages of drilling campaign brine samples have been collected from trenches, monitoring wells and pumping wells drilled from 1974 to 1979 (section 7.2.2). However, no further details were available for SRK to review.

Historical samples have been collected from production and monitoring wells and analyzed in the on-site salar laboratory (Albemarle). The samples were collected systematically on a monthly basis


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since January 1999. The hydrochemistry Albemarle database, used in the groundwater model to support the reserve estimate, has records until July 2019.

Albemarle also provided a secondary hydrochemistry database with records from January 1999 to August 2020; it has similar values with the database mentioned above. Albemarle do not use these records for any evaluation or future planning, and SRK used this alternative database for comparison purposes only. Figure 7-10 and Figure 7-11 show the distribution of the sampling point and the lithium concentration recorded from 1999 to 2019.

Source: SRK 2021

Figure 7-10: Historical Sampling Points Location (1999 -2019)

Source: SRK 2021

Figure 7-11: Measured Lithium Concentration from Historical Database (1999 - 2019)


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In years 2018 and 2019, 77 samples were collected: 12 samples from exploration wells using a packer, 32 samples during long-term pumping tests, seven samples in short-term pumping tests and 26 samples from the production wells, extracted at 48 different points. This sampling campaign was designed to support the resource model estimate and is described in detail in Section 8.


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8Sample Preparation, Analysis, and Security

Samples of the host rocks and the brines themselves have been collected and analyzed from the active production wells as part of operations at Atacama since 1999. Additionally, during the exploration campaign carried out between 2018 and 2019, a total of 77 brine samples were extracted at 48 different points. Samples from existing production wells, pumping tests, and from packer tests were sent to the different laboratories as outlined below as part of the Quality Assurance/Quality Control (QA/QC) process.

Only the samples from 2018 to 2019 drilling campaign were considered for the resource estimate (as they are reflective of current salar conditions) and analyses for these samples were conducted by Albemarle’s internal laboratory in La Negra. Historical samples measured since 1999 were used for development and calibration of the numerical groundwater model to support the reserve estimate.

8.1Sampling Events

8.1.12018 and 2019 Campaign

Considering the brine is a dynamic resource, the samples to support the resource estimate need to be collected in a recent time period. The 2018 to 2019 sampling campaign was developed with that purpose in mind.

The 77 samples obtained during the 2018 to 2019 campaign have been collected from 12 exploration wells using a packer, 32 during long-term pumping test, 7 in short-term pumping tests and 26 from the production wells, extracted at 48 different points (Table 8-1). Details on each of the different sampling rounds and how each dataset were used in the resource and reserve estimation process are described below.

Packer Sampling

The samples extracted with the double packer system were obtained after pumping the tested interval at a time equal to at least three times the volume of brine storage in the well plus the existing volume in the pipes that carry the brine to the surface. In this way, the extracted sample is representative of the conditions of the brine entering the well and not of the brine previously stored in it, which may have its origin in other layers of the aquifer.

Therefore, the duration of each test is determined as the time necessary for the volume of brine contained in the tested interval (plus accumulated water column in the PVC pipes) to be renewed ideally more than three times. This has not been possible in all cases due to the low flow that some intervals present. In some tests, the evolution of the physical-chemical parameters of the brine has been recorded during the pumping test with a HANNA HI 98194 multiparameter through the use of a flow cell. The flow cell makes it possible to measure parameters before the brine comes into contact with the atmosphere. Multi-parameter gear was only available during the first DPS field campaign.

Sampling from Pumping Test and Production Wells

The sampling of the production wells has been carried out in different campaigns, between the months of December 2018 and April 2019. A brine sample has been extracted from 27 production wells distributed throughout claim areas A1 and A2, where 23 and 4 wells have been sampled, respectively (Table 8-1).


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Table 8-1: List and Coordinates of Production Wells Sampled for the Study


Well	X_UTM WGS84	Y_UTM WGS84
CL-120	568791	7388180
CL-85	568447	7385037
CL-92	567679	7385928
CL-41	556151	7381491
CL-59	555731	7380459
CL-98	559973	7386200
CL-99	568048	7384939
CL-78	556046	7380948
CL-80	557315	7382635
CL-91	567715	7382838
CL-90	567488	7383686
CL-1	573041	7384392
CL-115	566959	7386256
CL-15	563329	7387453
CL-19	563132	7386157
CL-20	564190	7387063
CL-22	566843	7386203
CL-23	571141	7384543
CL-24	570070	7382264
CL-27	567535	7387586
CL-37	565679	7386693
CL-45	571689	7387482
CL-60	557531	7382960
CL-65	558805	7383832
CL-79	556639	7381750
CL-9	564577	7386801
CL-97	558413	7383460

Source: GWI, 2019

The brine samples have been taken from the pipeline of each of the production wells or from a sampling valve on the pumping well pipe during the pumping test (Figure 8-1). The bottles have been rinsed three times with the brine from the well and then completely filled without leaving air bubbles, to avoid precipitation processes and physical-chemical changes within the container. In addition, during the sampling, physicochemical parameters of the brine (specifically pH, EC, TDS, and T) have been measured using the Hanna HI98196, HI98192, and HI98128 multiparameter meter. A multiparameter data verification procedure has been followed and the meter was calibrated, if necessary.

The bottles were labeled with the name of the well, the type of well (e.g., “Production Well") and the date and time of sampling. The sampling information was recorded in project records.

From each well, five 1-liter bottles were collected. During the transport and storage of the samples, exposure to environmental conditions was prevented to avoid sudden changes in temperature that might alter the chemical composition of the sample. It was not necessary to use preservatives.

Notably, the extraction flow rate and the depth of the brine level in Albemarle's production wells are monitored online by a telemetry system.


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Source: GWI, 2019

Figure 8-1: Production Wells Sampled

8.1.2Historical Sampling

Lithium concentrations from historical sampling were available for 86 monitoring locations, with a total number of 5,282 samples from 1999 to 2018 within Albemarle properties and transition zone to the southeast.

Since the beginning of the extraction of brine at the Salar Plant, samples from the pumping wells have been periodically analyzed. Since 1999, brine chemistry data has been collected on a monthly basis.

These samplings are carried out in order to control the chemical evolution of the brine that will be pumped to the evaporation ponds. The sampling method is by means of plastic bottles of 1 L or 0.5 L capacity, one sample is taken per month from each well. Until 2018, this sampling was carried out at the outlet of each HDPE line, when the brine was discharged into the pond. During 2018, wastewater valves began to be installed after the flowmeter, which reduces risks and improves the representativeness of the sample, as they are taken right at the wellhead.

The analyses are carried out in the Salar Plant laboratory and the following determinations are usually made density, Li+(%), SO4-2 (%), Ca+2(%), Mg+2(%), K+(%), Na+(%), Cl-(%), B+(%), Temperature (°C) and pH.

Figure 8-2 shows the box-and-whisker diagram of the historical variability (since 1999) of lithium concentrations, in the samplings from production wells and expressed as an annual average per well.


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Note: Each data point (circle) represents an average concentration at a specific location at the year shown. “x” symbols connected by a line represent the multi-well average of that year.

Source: SRK 2021

Figure 8-2: Historical Lithium (%) Variability (1999-2019)

As can be seen in Figure 8-2, the minimum values, established by the lower whisker, do not materially change with time, so it is interpreted by SRK that the brine has a minimum lithium concentration that remains unchanged. It can also be seen that the median in the last 10 years remains relatively steady.

The historical brine samples collected at pumping wells were used for a qualitative indication of brine grade persistence over the prolonged pumping periods. They were also used quantitatively in developing the grade interpolations as input to the numerical groundwater model. Historical brine samples were not used for developing the resource estimate.

8.2Sample Preparation, Assaying, and Analytical Procedures

8.2.1Historical Sampling

Historical samples from the production wells and observation points have been collected on a monthly basis by the operators of the Salar de Atacama Plant Hydrogeology Department. The samples were analyzed in the plant laboratory located on site. No duplicates were collected in this process.

SRK notes that while comprehensive QA/QC or independent verification of sampling has not been a continuous part of the plant lab, Albemarle operations in Salar de Atacama have been producing lithium from brines for 24 plus years. Production has been consistent with reserve planning from the brine reservoir.

8.2.22018-2019 Campaign

The samples obtained from the 2018 to 2019 campaign were collected during pumping tests at discrete times of 30 min, 24 hr, 72 hr and 7 days; from production wells; and from exploration wells using packers.


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The brine samples were collected as follows:

•Brine was pumped from inside the well up to three times its volume or the interval to be sampled, thus ensuring that the brine being sampled represented what was flowing into the well screen from the aquifer.

•Each bottle (1 liter [L]) was conditioned with the freshly extracted brine.

•Five increments of 1 L each were extracted directly from the pump flow or from the pipe into the bottles. These were stored and duly labeled in five bottles according to the previously defined chain of custody. The destination of each bottle was:

◦Albemarle Laboratory: La Negra - Antofagasta, Chile - Original Sample A - 100%

◦K-UTEC Laboratory: Germany. Sample B - 100%

◦Alex Stewart Laboratory: Mendoza, Argentina. Control Sample C - 30%

◦CCHEN Laboratory: Control Sample D - 30%

◦Albemarle Laboratory: La Negra - Antofagasta, Chile. Duplícate Sample - 100%

Each bottle was labeled with the following information:

•Sample number

•Sample interval

•Well name

•Depth of sampling

•Type of sampling (pumping tests, production wells or packer)

•Name and company of the sampler

•Date of sampling

The sampling control information was entered into an Excel data sheet for further processing.

All samples were stored in equivalent containers duly sealed in order to protect against contamination during transportation.

The chemical analyzes of Li, Mg, K, Ca, Na, B, and sulfate were carried out by means of ICP, optical, with standards, procedures and protocols consistent between the involved laboratories. Sulfate and chloride were determined with different techniques. Table 8-2 summarizes the methods used for each of the elements analyzed. Figure 8-3 shows the sampling points used.


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Table 8-2: Analytical Methods by Laboratory


Parameter	Investigation Lab Albemarle La Negra	K-Utec Lab Germany	Alex Stewart Lab Argentina
B	ICP	ICP	ICP
SO4	ICP	Gravimetry	Gravimetry
		(ICP requested)	(ICP requested)
Mg	ICP	ICP	ICP
Li	ICP	ICP	ICP
K	ICP	ICP	ICP
Ca	ICP	ICP	ICP
Na	ICP	ICP	ICP
Density	Gravimetry	No information	Pycnometry
Chloride	Titration of precipitation with a silver nitrate solution using potassium dichromate for its detection.	Automatic potentiometric titration with a solution of silver nitrate in solution.	Mohr's Method in Solutions > 5% TDS and Potentiometry (Ion Selective Electrode) in solutions <5% TDS.

Source: GWI, 2019

Source: GWI, 2019

Figure 8-3: Sampling Points

No sample preparation was necessary, as care was taken to obtain samples of the brine in their native state. The samples were taken by the operators of the salar hydrogeology group, while the water resources area sent them to the corresponding laboratories.


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During the exploration campaign carried out between 2018 and 2019, a total of 77 samples were extracted from 48 different points, with four sample bottles each. Duplicates of the 77 samples were sent to the La Negra laboratories in Antofagasta and K-Utec in Germany, Alex Stewart laboratory (Mendoza, Argentina), and the CCHEN laboratory.

The analyses carried out consisted of determining the concentration of sulfate, chloride, boron, barium, calcium, iron, potassium, lithium, magnesium, manganese, sodium, strontium and density, according to the methods indicated in the certificates of each laboratory.

Table 8-3 shows the Well ID, type of test in which the samples were drawn, and the laboratories to which they were sent (“All”: includes Alex Stewart and CCHEN). It should be noted that the fourth column indicates the depth to which the sample was extracted or the time, depending on whether it was extracted during a packer test or a pump test, respectively.

A chain of custody was established, which incorporated not only sampling, but also storage and shipment of samples to each laboratory. The samples were labeled immediately after being taken from the wells, then they were stored at the Albemarle storage in Salar Plant. Later, they were transferred in coolers and sent by DHL to the respective laboratories.

Table 8-3: List of Samples Used for this Study

Sample No.

Well ID

Type

Depth (m) - Test Time

Label

Laboratory

A218

Sampling during packer testing

28-43

A-218A

All

86-101

A-218B

All

A228

Pumping test

30 min

A228-T1

LN & K Utec

24 h

A228-T2

All

72 h

A228-T3

LN & K Utec

7 d

A228-T4

LN & K Utec

A230

Sampling during packer testing

129-146

A-230A

LN & K Utec

A316

Sampling during packer testing

25-45

A-316A

LN & K Utec

70-85

A-316B

LN & K Utec

90-105

A-316C

LN & K Utec

A317

Sampling during packer testing

35-50

A-317A

LN & K Utec

A319

Sampling during packer testing

28-43

A-319A

LN & K Utec

A320

Pumping test

30 min

A320-T1

LN & K Utec

24 h

A320-T2

LN & K Utec

72 h

A320-T3

LN & K Utec

7 d

A320-T4

LN & K Utec

CL-1

Production well

CL-1

LN & K Utec

CL-15

Production well

CL-15

LN & K Utec

CL-19

Production well

CL-19

LN & K Utec


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CL-20

Production well

CL-20

LN & K Utec

CL-22

Production well

CL-22

LN & K Utec

CL-23

Production well

CL-23

LN & K Utec

CL-24

Production well

CL-24

LN & K Utec

CL-27

Production well

CL-27

LN & K Utec

CL-37

Production well

CL-37

LN & K Utec

CL-41

Production well

CL-41

LN & K Utec

CL-45

Production well

CL-45

LN & K Utec

CL-59

Production well

CL-59

LN & K Utec

CL-60

Production well

CL-60

LN & K Utec

CL-65

Production well

CL-65

LN & K Utec

CL-78

Production well

CL-78

LN & K Utec

CL-79

Production well

CL-79

LN & K Utec

CL-80

Production well

CL-80

LN & K Utec

CL-84

Short Pumping test

30 min

CL84-T1

LN & K Utec

24 h

CL84-T2

LN & K Utec

72 h

CL84-T3

LN & K Utec

7 d

CL84-T4

LN & K Utec

CL-85

Production well

CL-85

LN & K Utec

CL-9

Production well

CL-9

LN & K Utec

CL-90

Production well

CL-90

LN & K Utec

CL-91

Production well

CL-91

LN & K Utec

CL-92

Production well

CL-92

LN & K Utec

CL-97

Pumping test

30 min

CL97-T1

LN & K Utec

24 h

CL97-T2

LN & K Utec

72 h

CL97-T3

LN & K Utec

7 d

CL97-T4

LN & K Utec

CL-98

Production well

CL-98

LN & K Utec

CL-99

Production well

CL-99

LN & K Utec


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CL-100

Pumping test

30 min

CL100-T1

LN & K Utec

24 h

CL100-T2

LN & K Utec

72 h

CL100-T3

LN & K Utec

7 d

CL100-T4

LN & K Utec

CL-101

Pumping test

30 min

CL101-T1

LN & K Utec

24 h

CL101-T2

LN & K Utec

72 h

CL101-T3

LN & K Utec

7 d

CL101-T4

LN & K Utec

CL-104

Pumping test

30 min

CL104-T1

LN & K Utec

24 h

CL104-T2

LN & K Utec

72 h

CL104-T3

LN & K Utec

7 d

CL104-T4

LN & K Utec

CL-105

Short Pumping test

30 min

CL105-T1

LN & K Utec

24 h

CL105-T2

LN & K Utec

72 h

CL105-T3

LN & K Utec

CL-107

Pumping test

30 min

CL107-T1

LN & K Utec

24 h

CL107-T2

LN & K Utec

72 h

CL107-T3

LN & K Utec

7 d

CL107-T4

LN & K Utec

CL-113PW

Pumping test

30 min

CL113PW-T1

LN & K Utec

24 h

CL113PW-T2

LN & K Utec

72 h

CL113PW-T3

LN & K Utec

7 d

CL113PW-T4

LN & K Utec

CL-115

Production well

CL-115

LN & K Utec

CL-120

Production well

CL-120

LN & K Utec

CLO-109

Sampling during packer testing

21-71

CLO-109A

LN & K Utec

80-107

CLO-109B

All

CLO-129

Sampling during packer testing

71-86

CLO-129A

All

115-150

CLO-129C

All

Source: GWI, 2019


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8.3Quality Control/Quality Assurance Procedures

Quality Control/Quality Assurance procedures are generally employed by companies to ensure accuracy and precision of the results obtained from laboratories. Generally, this may include independent checks (duplicates) on samples by third party laboratories, blind blank/standard insertion into sample streams, duplicate sampling, and more. Albemarle has historically only engaged in independent third party laboratory checks (i.e., Control Laboratories) of sampling as described in section 8.2. For transparency, SRK decided to use results from one of the third-party labs, K-Utec, for development of resource estimate.

SRK did not receive any information regarding blank or standard samples being sent to the labs for analysis.

8.3.1Control Laboratories

The procedure to control and ensure the quality of the sampling and chemical analysis performed on the samples in this study has been carried out by extracting five samples from observation points. These samples were sent to La Negra laboratories in Antofagasta, K-Utec laboratory in Germany, and Alex Stewart laboratory in Argentina.

Correlation of duplicate analytical values for the same samples from independent laboratories can identify relative biases between these laboratories. In this case, the objective is not to demonstrate which laboratory is “correct” as all are assumed to be high quality laboratories using consistent analytical procedures and methods. The comparison makes it possible to review both the inherent local variability of the sampling, inconsistencies in preparation of the samples, or biases from the laboratories themselves.

8.3.2Correlation Between Lithium Grades of Different Invariant Laboratories of the Sampling Type

Comparison of the results between Albemarle’s La Negra laboratory and K-Utec’s laboratory in Germany indicates an acceptable correlation, in SRK’s opinion, represented by a value of 0.914 (through Figure 8-6). The K-Utec laboratory generally results in a lower lithium concentration compared to the La Negra laboratory for grades greater than 0.3%. On the other hand, values below 0.3% generally are higher at K-UTEC (Figure 8-4).


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Source: Albemarle, 2019

Figure 8-4: Scatter Diagram Comparing the Results Obtained for Lithium Between Albemarle's In-House Laboratory and K-Utec's Laboratory

The correlation between the Alex Stewart and La Negra labs is also high (0.968), however, a consistent bias can be observed between both labs. Alex Stewart labs consistently report higher lithium concentrations versus Albemarle in the samples (Figure 8-5).


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Source: Albemarle, 2019

Figure 8-5: Scatter Diagram Comparing the Results Obtained for Lithium Between Albemarle's In-House Laboratory and Alex Stewart Laboratory

A similar situation occurs in the correlation between Alex Stewart and K-Utec labs. Despite the correlation between both labs being high (0.992), Alex Stewart lab consistently returns a higher concentration than K-Utec when the values are greater than 0.15% lithium (Figure 8-6).


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Source: Albemarle, 2019

Figure 8-6: Scatter Diagram Comparing the Results Obtained for Lithium Between Alex Stewart Laboratory and K-Utec's Laboratory

8.4Opinion on Adequacy

SRK used the results from the independent K-Utec Laboratory to support the development of the resource estimate. SRK utilized historical results from the Albemarle La Negra laboratory for the numerical groundwater model to support the reserve estimate. SRK has reviewed the sample preparation, analytical, and QA/QC practices employed by consultants for the 2018 through 2019 campaign samples analyzed by the La Negra laboratory in Antofagasta (Albemarle), K-Utec in Germany, Alex Stewart laboratory (Mendoza, Argentina), and the CCHEN laboratory. SRK’s opinion follows:


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•The QA/QC program for the 2018 through 2019 campaign supports that the extraction of each sample is reproducible and auditable and it is sufficient to support a resource estimate. The correlation between the K-Utec lab and La Negra is high, however SRK acknowledges that there is potential for bias to exist. It is the QP’s opinion that uncertainty associated with this potential for bias is mitigated by the long history of brine extraction at consistent levels supporting historic lithium production.

•The historical data supporting the mineral reserve estimates at Salar de Atacama have not been fully supported by a robust QA/QC program. This potentially introduces uncertainty in the accuracy and precision of the sample data. However, in the QP’s opinion, this uncertainty is mitigated through the consistency of results from the 2018 through 2019 campaign and the historical data. In the QP’s opinion, the risk is also mitigated through the inherent confidence derived from more than 35 years of consistent feed to the processing plant producing lithium at the Salar de Atacama/La Negra.


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9Data Verification

9.1Data Verification Procedures

SRK conducted the following review and verification procedures during 2020 to support the resource and reserve estimates:

•Pumping test review and reinterpretation of the tests carried out in 2019. New results were incorporated into the hydraulic properties data base.

•Review of the original laboratory analysis certificates.

•Review and analysis of historical lithium concentration data per well. Checking the consistency of data in time, and identification of locations alternated by evaporation (trenches) or leakage from concentration ponds.

•A review and reinterpretation of the geological model developed by Dr. Boutt and Dr. Munk was conducted. SRK worked in collaboration with original authors and the Albemarle geological team (Atacama). The work included:

◦A review of the available literature and third-party studies in Salar de Atacama.

◦Interpretation of applied geophysical studies (HRS, TEM, and NMR), surface geological maps and the consistency with the 3D geological units.

◦Data review from all Albemarle concessions and environmental permit zones.

◦ A detail reinterpretation of the lithologies from boreholes in the Albemarle concession areas.

◦The available data was evaluated to provide cross-confirmation of geological and hydrostratigraphic interpretations

A 3D geological model was built in collaboration with the original authors and Albemarle personnel, including:

•A review and recalculation of the lateral recharge from the surrounding basing to the groundwater system presented in 2019 environmental model report (SGA, 2019).

•A review and adjustment of historical data, including 2019 pumping tests, of specific yield (Sy) was completed.

The consistency of the historical data was verified against the 2018 to 2019 campaign samples (K-Utec lab), described in Section 8. Figure 9-1 shows a high correlation (R2 =0.99) between the average annual values in 2019 analyzed at the on-site plant lab and the results from K-Utec laboratory.


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Source: SRK 2021

Figure 9-1: Comparison of Historical Lithium Concentrations and 2018-2019 Campaign (K-Utec)

9.2Limitations

All the data collected historically could not be independently verified. However, in the QP’s opinion, verification of the samples collected in 2018 to 2019 campaign and analyzed by independent labs provided confidence in the methods used and results of samples analyzed by the La Negra laboratory.

9.3Opinion on Data Adequacy

The brine data were compiled in a standardized database under the supervision of Albemarle personnel. All data were converted into the same units and the database was checked for discrepancies, errors, and missing data. The data received from multiple sources were cross-referenced by SRK against the Albemarle database and original laboratory certificates; Albemarle reviewed and corrected any discrepancies with respect to sample locations and depths.


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SRK visited the Salar operation and it’s on site laboratory in November 2021. SRK verified that the stated procedures are being followed. All details and data on QA/QC methodology are as described by Albemarle personnel.

Based on review of the historical database, the consistency of the values during the history of brine extraction, and the high correlation of the historical data and the results from the 2018 to 2019 campaign, in SRK’s opinion, the data used for the resource and reserve estimates is acceptable and appropriate. Historical sampling at production wellheads and at ponds supports that there has been a consistent feed to the processing plant and the lithium produced provides additional verification of the historical data used for calibration of the numerical model.


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10Mineral Processing and Metallurgical Testing

Albemarle's operations in Chile are developed in two areas, the Salar de Atacama and La Negra. The Salar de Atacama operation extracts lithium brines from deep and shallow groundwater wells. These brines are then discharged to solar evaporation ponds to concentrate the lithium brine, which is then transferred to the La Negra plant for processing. The La Negra plant refines and purifies the lithium brines, producing a technical and battery-grade lithium carbonate (and historically lithium chloride although this is not forecast for future production).

These operations have been in production for approximately 40 years and most of the data relied upon to forecast operational performance relies upon experience with historic production. However, Albemarle is proposing a modification to its flow sheet at the salar to improve lithium process yields in the evaporation ponds. Albemarle refers to this process as the SYIP. The SYIP aims to improve this process recovery through mechanical grinding and washing of by-product salts in two new plants, the Li-Carnalite Plant and Bischofite Plant and testing associated with the SYIP is discussed below.

10.1Salar Yield Improvement Program Testing

Historic process yield for lithium in the evaporation ponds at the Salar de Atacama have been around 50% (ranging from less than 40% up to the mid-50%). In 2017, Albemarle commissioned K-UTEC to evaluate opportunities to improve on this historic performance. K-UTEC proposed and evaluated six options for improvement, including performing laboratory and pilot scale testing on each. Based on this testwork, Albemarle decided to proceed with two of the six options evaluated. The two selected opportunities for improvement follow:

•Bischofite Treatment Plant: Implementation of a continuously driven washing and comminution/vat leaching operation for bischofite in order to recover the adhering brine and lithium contained in the bischofite salts.

•Li-Carnallite Treatment Plant: Implementation of a continuous Li-Carnallite decomposition by comminution and reactive step using brine.

10.1.1Bischofite Treatment Testing

Albemarle recently started to place harvested bischofite salts in drainage fields to recover entrained lithium-rich brine. While this recovers a portion of the lithium that would otherwise be lost in this stage of processing/evaporation, there is still significant brine adhered to the bischofite salts post-drainage. The intent of the bischofite treatment process is to further wash this concentrated brine from the bischofite salt using a dilute, natural brine, as well as further dissolution of lithium precipitated in these salts.

K-UTEC completed several tests related to this proposed process upgrade at their laboratory in Sondershausen, Germany. These include an evaluation of drainage performance of the bischofite salt as well as laboratory-level tests and pilot-scale tests on the washing/leaching of the bischofite using an agitated reactor. To complete these tests, Albemarle collected precipitated bischofite salts from the salar operations and transported these salts to K-UTEC’s laboratory for evaluation. From a scale perspective, the bischofite drainage test utilized 100 kilograms (kg) of bischofite salt, the pilot scale tests utilized 260 kg of bischofite salt, and the laboratory scale testing utilized 1 kg of bischofite salt. These salts come from the bischofite stockpile, but due to drainage storage before arriving to


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Sounderhausen the LiCl was lower than data collected in the field. Therefore, test work of drainage was carried out in order to emulate the conditions on site. SRK is of the opinion that the bischofite tested is generally representative of bischofite from Albemarle’s Salar de Atacama operations.

The bischofite treatment testing utilized brine from extraction well as the wash solution. This brine is characterized as calcium-rich, but no additional information on the wash solution (e.g., lithium, calcium, sulfate, magnesium concentrations) is presented. Therefore, this solution is likely representative of the brine that is sourced from CL-9. The bischofite drainage testing utilized concentrated brine between pond 4A and 3A. This solution is viewed as likely representative of the brine that would typically be entrained in the bischofite salt.

The results of the laboratory and pilot scale Bischofite washing/dissolution testing included 57% lithium recovery at the pilot scale and 79% lithium recovery at the laboratory scale. Lithium/magnesium selectivity (i.e., preference for lithium dissolution) is reported at 85% at pilot scale and 89% at laboratory scale. K-UTEC also evaluated alternatives other than the agitated reactor such as screw dissolution although these tests were inconclusive due to poor test implementation.

Notably, the pilot-scale study results include significantly lower lithium recovery in comparison to the laboratory-scale testwork. K-UTEC believes that this was due to a combination of lower performance of the centrifuge in the pilot scale work and a lower content of lithium in the bischofite salt in the pilot testwork.

The final piece of the testwork is the evaluation of drainage performance on the bischofite salt. This testwork showed a lithium content in adhered brine of around 21% by weight in comparison to around 7% of lithium by weight in the sample received for the testwork.

10.1.2Lithium-Carnallite Treatment Testing

Albemarle already harvests lithium carnallite salts and washes/leaches them. The key differentiator in the newly proposed lithium-carnallite plant will be the addition of comminution of the salts to increase the efficiency of the leaching. Unlike the bischofite washing, which utilizes a raw brine, the lithium carnallite washing utilizes recycled brine from the bischofite plant increasing the synergy of both new processes. This proposed process leaves a residual bischofite which is then proposed for processing in the proposed new bischofite plant to recover any residual lithium.

As with the bischofite testing, the lithium carnallite testing was completed at laboratory and pilot scale and also went through drainage testing. K-UTEC notes that as with the bischofite testing, it is believed that the lithium carnallite utilized in the testing was collected from disposal dumps which had been subject to washing with rainwater and the sample had limited actual lithium-carnallite (19% with predominant bischofite). Wash solution was concentrated brine sourced from the carnallite pond discharge, which should be representative of the targeted wash solution at an operational level. The pilot testing utilized 240 kg of salt, the laboratory sample sizes were around 0.4 to 0.8 kg and the drainage testing utilized 100 kg.

Results from the lithium-carnallite lab testing were similar to the bischofite recovery in that the pilot scale test reported lithium recovery of around 60% and the laboratory test reported recovery of around 76% with lithium/magnesium selectivity of 97% for both types of tests. Drainage testing suggested adhering brine of around 16% lithium versus 9% lithium on the samples received. Similar


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comments apply in that the lower yield was attributed by K-UTEC to lower centrifuge performance and different lithium content in salt.

10.1.3Salar Yield Improvement Program Test Commentary

Based on the results of the laboratory testwork, K-UTEC estimates that the implementation of the SYIP will increase lithium recovery in the salar from current levels to around 65%. Albemarle has adopted this estimate for its assumed performance with the SYIP.

In SRK’s opinion, based on the K-UTEC test data, an overall recovery in the 80% range is possible under a best-case scenario for both lithium carnallite and bischofite. However, this is ideal performance and not likely in an operating scenario and therefore a downgrade to the assumption of K-UTEC of 65% is more realistic and a reasonable assumption to use in production forecasts.

Although the improvement to 65% lithium recovery assumed by K-UTEC and Albemarle is reasonable, in SRK’s opinion, the current test data has gaps and does not provide a direct correlation to this result. Therefore, in SRK’s opinion, Albemarle would benefit from updating its test data to better define the current mass balance, current lithium losses and estimates of potential improvement for the SYIP. This will help refine the design of the SYIP and presents an opportunity to improve the performance of the operation if the maximum recovery potential can be realized.


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11Mineral Resource Estimates

The Mineral Resource estimate presented herein represents the latest resource evaluation prepared for the Project in accordance with the disclosure standards for mineral resources under §§229.1300 through 229.1305 (subpart 229.1300 of Regulation S-K). Although Albemarle produces byproducts from the Salar de Atacama, including potash, SRK has limited its resource estimate to the dominant economic product of lithium.

11.1Key Assumptions, Parameters, and Methods Used

This section describes the key assumptions, parameters, and methods used to estimate the mineral resources. The technical report summary includes mineral resource estimates, effective August 31, 2021. The geologic block model is incorporating all relevant exploration data as of June 30, 2020 and there is no additional data since that date. The resource has been depleted to August 31, 2021.

The coordinate system used on this property and for this MRE is WGS 1984 UTM Zone 19S. All coordinates and units described herein are done in meters and metric tons, unless otherwise noted. This is consistent with the coordinate systems for the project and all descriptions or measurements taken on the project. The database used for interpolation of brine characteristics has been compiled by Albemarle from analytical information generated by third party laboratory K-Utec.

The Mineral Resource stated in this report are entirely located on mineral title, surface leases, and accessible locations currently held by Albemarle as of the effective date of this report. All predictive production wells used to estimate brine reserves have been limited to within these boundaries. Detail related to the access agreements or ownership of these titles and rights are described in Section 3 of this report.

11.1.1Geological Model

To constrain and control the MRE, a geological model was required to approximate the geological features relevant to the estimation of mineral resources, to the degree possible, given the data and information generated at the current level of study. SRK developed two models (regional and local) in relation to the deposit, in collaboration with Albemarle personnel and its consultants (Dr. David Boutt and Dr. LeeAnn Munk). Figure 11-1 shows the geological model’s extents. This was done to leverage the site-based expertise and improve the overall model consistency. Geological information supporting the development of the models was incorporated from multiple sources including:

•CORFO

•SQM

•Albemarle

The geological models are comprised of multiple features which have been modeled to either be independent of each other or, in some cases, may depend on the results from another modeling process. An example of this, is the way in which a structural model may influence the results of the lithology model or the final resource boundaries.


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The combined 3D geological models were developed in Leapfrog Geo software (v6.0.2). In general, model development is based on the following

•Interpreted Geophysical Data (historic and modern)

◦TEM

◦CSAMT

◦Seismic

◦Downhole

•Drill Hole Logging

•Surface Geologic Mapping (historical and modern)

•Interpreted cross sections (historical and modern)

•Surface/downhole structural observations

•Interpreted polylines (surface and sub-surface 3D)


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Figure 11-1: Regional Geological Model Extent - Plan View

Lithology

The geological models were developed by first grouping lithology into different hydrogeologic units within Leapfrog Geo. For the regional model, groups consisted of Ignimbrite and volcanic units, Sediment (east and west), Transition, Undifferentiated, and Basement. For the local model, groups consisted of Upper Clastic, Lower Clastic, Upper Halite, Lower Halite, VGC (Volcanic/Ignimbrite, Gypsum, Clastic), and Basement. Geophysical data was digitized to refine upper halite in the eastern zone, ignimbrite, and basement profile contacts. Publicly available cross-sections prepared by SQM were used to digitize the upper surface of the VGC within the regional model. The undifferentiated


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unit was developed by making a surface constrained by the bottom of all coreholes with geologic data.

The local geological model is shown in plan view and cross section view in Figure 11-2 and Figure 11-3 respectively.

Source: SRK 2021

Figure 11-2: Geological Model - Plan View


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Source: SRK, 2021

Note: VGC. Volcanic, Gypsum and Clastic sequences

Figure 11-3: Geological Model - Cross Sections

Resource Domain Model

The resource was calculated used the current Albemarle claim area shown in Figure 11-2 (A1, A2, and A3). The total surface area is 167,255,755.6 m2, including the aquifers and aquitards present in the subsurface and excluding the bedrock. The bedrock units were used as hard boundaries in the


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resource estimate process. SRK infers in the estimation that the other units described in the geological model, with the exception of the basement rock, are all permeable and do not constitute constraints or controls on the estimation of Li concentration.

11.1.2Exploratory Data Analysis

The raw dataset of lithium concentration consists of sampling at certain intervals along the drill hole. Figure 11-4 shows plan and section views of the raw lithium data (mg/l). The distribution of the information is heterogeneous across the property and is mainly concentrated on the western and central part (claim area A1). The vertical section view of Figure 11-4 shows the differences in length of the hydraulic tests (sample lengths) and the distribution of them in elevation. Figure 11-5 presents the log probability plot, histogram and the table of statistics of the raw data of lithium.


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Note: Scales in meters

Source: SRK, 2021

Figure 11-4: Distribution of Lithium Samples in Plan View (top) and Section View A-A’ (bottom, Looking to N-NW) – Drill Hole Lithium Data Projected to Section A-A' - 30x Vertical Exaggeration


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Column	Count	Minimum	Maximum	Mean	Variance	StDev	CV
Li (mg/l)	48	579	4,570	2,222.8	598,075	773.4	0.35

Source: SRK, 2021

Figure 11-5: Summary of Raw Sample Statistics of Lithium Concentration – mg/l, Log Probability and Histogram


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Similar irregular distribution and variable lengths of the lithium data are observed in the specific yield raw data (from hydraulic tests). A different set of data from the lithium data set was used, which includes some drillholes with lithium samples. Figure 11-6 shows the location of the tests of specific yield values in the Salar of Atacama. Section 7-3 present more details of Sy by hydrogeological unit.

Source: SRK, 2021

Figure 11-6: Specific Yield Samples in Plan View

11.1.3Drainable Porosity

The drainable porosity or Sy in Atacama was estimated from measured values in upper halite and VGC units and literature values based on the lithology, studies in Salar de Atacama outside of Albemarle’s claim, and QP’s experience in similar deposits. The Chapter 7 summarize the Sy values measured in Salar de Atacama. Measured Sy data were interpolated with ID2 method and applied to the block model as explained in the following section. The Sy data used in the resource model are shown in Table 11-1, which includes the raw data used to interpolate Sy in the Upper Halite and VGC units. Table 11-2 presents the Sy values assigned to the rest of the lithological units.


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Table 11-1: Drainable Porosity (Sy) Raw Data - Upper Halite and Volcanic Units


Column	Count	Minimum	Maximum	Mean	Variance	StDev	CV
Upper Halite (UH)
Sy	71	0.04	0.554	0.102	0.01	0.115	1.14
Volcanic, Gypsum and Clastic (VGC)
Sy	30	0.002	0.558	0.158	0.02	0.158	1.0

Source: SRK, 2021

Table 11-2: Drainable Porosity (Sy) Values Used for Other Lithological Units


Unit			Sy
UC (Upper Clastic)			0.06
LC (Lower Clastic)			0.03
LH (Lower Halite)			0.02

Note: Values estimated based on available measured data outside of mining claim (if available), literature, comparative values with the other units and QP’s experience in similar deposits.

Source: SRK, 2021

11.2Mineral Resources Estimates

The primary factors utilized in developing a brine resource estimate include the following:

•Aquifer geometry and limits (volume)

•Drainable porosity or Sy of the hydrogeological units in the salar

•Lithium concentration

Lithium concentration samples description and analysis are shown as part of the interpolation methodology used. Block model details and validation process are also described.

11.2.1Compositing and Capping

Capping of high-grade outlier data is normally performed where these data points are interpreted to be part of a different population. In SRK’s opinion, capping is appropriate at the Salar de Atacama for dealing with high grade outlier values, in this case the lithium concentration. The data was reviewed and verified, as described in sections 8 and 9. This included the review of high-yield outlier data to determine whether top cutting or capping was required that may bias or skew data for statistical and geostatistical analyses. A log-probability plot (Figure 11-7) was assessed and a capping at 3,990 mg/l Li was applied to the dataset. The table in Figure 11-7 presents the impact of the capping on the statistics of Lithium, resulting in one outlier value capped and a reduction of 0.5% of the mean of lithium for the input data. The impact to the coefficient of variation is limited to a slight reduction.


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Data	Element	Count	Capped	Cap (Li – mg/l)	Percentile	Lost (Li mean)	Mean (mg/l)	Max (mg/l)	Variance	CV
Raw	Lithium	48					2,223	4,570	598,075	0.35
Capped	Lithium	48	1	3,990	97.91%	0.5%	2,211	3,990	547,152	0.33

Source: SRK, 2021

Figure 11-7: Capping Analysis (Probability Plot of Lithium) and Table of Impact of Capping (Statistics)

To avoid the smearing of lithium concentrations greater than 2,500 mg/l, which are not outliers, towards zones with lower limited quantity of data and characterized by lower concentrations, the Vulcan software tool to exclude distant high yield samples was used during the second pass of the interpolation procedure. Samples with concentrations higher than 2,500 mg/l li were limited to a radius of 3,500 m by 3,500 m by 50 m. The lithium threshold (2,500 mg/l) was defined from the analysis of the probability plot (Figure 11-8) selecting a concentration approximately where the values start to be discontinuous (75th percentile). The radius used was defined based on the visual inspection of the distribution of grades in the space. In addition to that, the range of the variogram is approximately the radius selected.

Previous to the grade interpolation, samples need to be regularized to equal lengths for constant sample volume (compositing). The raw sampling data for lithium is characterized by variable lengths and discontinuous sampling along the drill holes. Figure 11-8 presents the histogram of the raw sample lengths. Given the nature of the hydraulic sampling and the differences in lengths, SRK carried out a number of tests using different lengths of compositing and determined that 25 m composites are appropriate although the raw data lengths are very variable. This is based on the nature of sampling in brine projects, which is effectively still sampling a single horizon in which the brine concentrations are assumed to not vary within the sample interval. As a result, an increasing number of composites compared with the number of raw intervals was obtained. The compositing


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was performed using the compositing tool in Maptek Vulcan software. Table 11-3 shows the comparative statistics for the raw samples and the composites. In general, SRK aims to limit the impact of the compositing to less than 5% change in the mean value after compositing. A change of 3.6% in the mean value is observed.

Source: SRK, 2021

Figure 11-8: Histogram of Length of Samples of Lithium (mg/l)

Table 11-3: Comparison Raw vs Composite Statistics


Data	Element	Count	Minimum (mg/l)	Maximum (mg/l)	Mean (mg/l)	Variance	StDev	CV
Samples	Lithium	48	579	3,990	2,211	598,075	773.4	0.33
Composites	Lithium	63	579	3,990	2,132	557,608	746.7	0.35

Source: SRK, 2021

The samples cross geological boundaries but considering that there are not impermeable barriers to limit the groundwater flow, QP considers it unnecessary to break down by geology.

Specific Yield (Sy)

The Sy test samples were not capped according to a hydrogeological evaluation of the information. Composites of 25 m were used for the data to estimate Sy into blocks for the Upper Halite and VGC units with enough data to support the estimation.


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11.2.2Spatial Continuity Analysis

The spatial continuity of lithium at the Atacama property was assessed through the calculation and interpretation of variography. The variogram analysis was performed in Datamine Studio RM Software (version 1.6.87.0) using the capped and composited data.

The following aspects were considered as part of the variography analysis:

•Analysis of the distribution of data via histograms

•Down-hole semi-variogram was calculated and modeled to characterize the nugget effect

•Experimental semi-variograms were calculated to define directional variograms for the main directions defined from the fan variograms analysis. Results were inconclusive to define anisotropy

•Omnidirectional variogram was modeled using the nugget and sill previously defined in the downhole/directional variography

•The total sill was normalized to 1.0

•The variogram analysis was performed using for various composite lengths (25 m, 30 m and 40 m)

The dominant anisotropy of lithium cannot be appropriately assessed due to the data distribution across the property. The omnidirectional variogram model was preferred for the neighborhood analysis and estimation. The graphical (Figure 11-9) and tabulated (Table 11-4) semi-variogram for lithium is provided below.

Source: SRK, 2021

Figure 11-9: Experimental and Modeled Omnidirectional Semi-Variogram for Lithium


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Table 11-4: Modeled Omnidirectional Semi-Variogram for Lithium


Variable	Rotation	Type	Variance	Range X (m)	Range Y (m)	Range Z (m)
Lithium	NA	Nugget	0.05
		Spherical	0.294	204.6	204.6	204.6
		Spherical	0.160	1,323.3	1,323.3	1,323.3
		Spherical	0.496	3,710.8	3,710.8	3,710.8

Source: SRK, 2021

The nugget effect is 5% with maximum range at 3,710.8 m.

Specific Yield

The distribution and quantity of Sy tests samples per lithology are not sufficient to support an appropriate spatial analysis per lithology in the same manner as the Li concentration.

11.3Neighborhood Analysis

Based on the results of the variography analysis, a neighborhood analysis was completed on the lithium data. This analysis provides a quantitative method of testing different estimation parameters and, by accessing their impact on the quality of the resultant estimate, select the appropriate value of each parameter. The slope or regression value (SOR) and kriging efficiency (KE) were used as the determining factors to optimize the kriging search neighborhood. Factors used in the neighborhood analysis included number of samples (Figure 11-10) and search (Figure 11-11).

Source: SRK, 2021

Figure 11-10: Neighborhood Analysis on Number of Samples for Lithium


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Source: SRK, 2021

Figure 11-11: Outputs from the Search Ranges Optimization Analysis

Based on the results of the optimizations and other factors like the spatial distribution of samples and the characteristics of the hydraulic tests, the neighborhood parameters were defined for estimation of lithium at the Atacama property and are summarized in Table 11-5.


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Table 11-5: Summary Search Neighborhood Parameters for Lithium


Variable	Pass	SDIST X (m)	SDIST Y (m)	SDIST Z (m)	Rotation	Min # Composites	Max # Composites	Max # Composites per Drillhole
Lithium	1	4,000	4,000	50	NA	4	8	2
	2	10,000	10,000	100	NA	1	8	2

Source: SRK, 2021

A block size analysis was performed (Figure 11-12). The optimization results with a final block size of 500 m by 500 m by 25 m (X, Y, Z coordinates) used. Besides of this, the analysis considered the distribution and spacing of the data. The compositing length of 25 m was an aspect considered to define the extension of the parent cells in elevation, maintaining consistency with it. The block size selected shows reasonable values of slope of regression and kriging efficiency and is appropriate according to the distribution and spacing of the data.

Source: SRK, 2021

Figure 11-12: Outputs from the Block Size Optimization Analysis

11.3.1Block Model

A block model was constructed using Maptek’s Vulcan™ software (version X11.0.4; Maptek Pty Ltd, 2019) for the purposes of interpolating grade and tonnage. The block model was sub-blocked along geological and mineral claim boundaries. The dimensions of the parent cell size used are 500 m in X, 500 m in Y, and 25 m in Z. The minimum sub-blocks sizes used are 10 by 10 by 1 m. Grade interpolation was performed on parent cells. The block model limits were defined by the mineral claim polygons with the extents of the block model shown in Figure 11-4. Blocks were visually


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validated against the 3D geological model and the mineral claim boundaries. Table 11-6 contains the block model parameters.

Table 11-6: Summary Atacama Block Model Parameters


Dimension	Origin (m)	Parent Block Size (m)	Number of Blocks	Min Sub Blocking (m)
X	547,500	500	100	10
Y	7,360,000	500	100	10
Z	2,100	25	24	1

Source: SRK, 2021

The blocks were flagged with the geological units and mineral claims identifiers. Figure 11-13 presents the lithology color coded block model. The values of Sy were assigned into the blocks according to the hydrogeological units. For upper halite and the VGC units, the Sy values were interpolated into the blocks.

Source: SRK, 2021

Figure 11-13: Plan View of the Atacama Block Model Colored by Lithology (2,260 mamsl, or 40 m bgs)

11.3.2Estimation Methodology

Interpolation of Lithium

SRK used the composited data to interpolate the lithium grades into the block model using OK for the first pass and Inverse Distance Squared (ID2) for the second pass.

A sensitivity analysis was performed by varying the estimation method (OK, ID2) and search pass strategy (single and multiple) to compare the resultant data for validation purposes, where the expert hydrogeological criteria was considered, including the historical information of the behavior of the concentration of Lithium in production drillholes. The grade estimations were completed in Maptek’s Vulcan™ software (version X11.0.4; Maptek Pty Ltd, 2019) using OK, ID2 and nearest neighbor (NN) estimation. SRK completed the following scenarios:


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•Three-pass nested search varying the size of the ellipsoid in the Z dimension (50 and 100 m) using OK and ID2

•Two-pass nested search varying the size of the ellipsoid in the Z dimension (50 and 100 m) using OK and ID2

•One-pass search 10,000 by 10,000 by 100 m.

SRK completed visual and basic statistical tests and elected to use the OK estimates using the 4,000 by 4,000 by 50 m ellipsoid for the first pass and use ID2 estimates for the second pass using 10,000 by 10,000 by 100 m ellipsoid as being most representative of the underlying data and the type of lithium deposit (Table 11 4).

The images in Figure 11-14 through Figure 11-16 show the results of the estimation in terms of number of drill holes, number of composites and the distances from the blocks to the composites used during the estimation. The majority of the blocks were estimated with three or more drill holes and with eight composites. The distance between the blocks and the composites used during the estimation has an average of 2,986 m and in most cases with distances less than 5,000 m. In SRK’s opinion, this provides confidence that the estimation methods are appropriate and force interpolation of the concentrations rather than extrapolation from single points.

Source: SRK, 2021


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Figure 11-14: Histogram of Number of Drill Holes Used to Estimate the Block Model

Source: SRK, 2021

Figure 11-15: Histogram of Number of Composites Used to Estimate the Block Model


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Source: SRK, 2021

Figure 11-16: Histogram of Average Distance from Blocks to Composites Used in Estimation

It is the QP’s opinion that the methodology used in the lithium OK and ID2 estimate is appropriate for resource model calculations.

Interpolation of Specific Yield (Sy)

SRK used the 25 m composited data to interpolate the Sy values into the block model using ID2 and a single search pass with the ellipsoid 8,000 m by 8,000 m by 8,000 m. the Sy values were interpolated using the data of the lithological units VGC (Volcanic, Gypsum and clastic) and Upper Halite (UH1) into the blocks flagged accordingly. Sy values where assigned into the blocks of the lithologies that were not interpolated according to the values presented in Table 11-2. The Sy mean grade of the interpolated blocks in the volcanic units (Volcanic and Ignimbrite) was assigned to the blocks not interpolated in those units.


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11.3.3De-Clustering

A de-clustering cell analysis of the composites was completed to obtain de-clustered statistics for model validation purposes for lithium and Sy. Additionally, the NN estimation of lithium and Sy was used as a spatially de-clustering method for comparative validation.

Declustering of the data results in a reduction in the mean of lithium and an increase in the mean of Sy (Upper Halite unit), which reflects the nature of more sampling of higher concentrations of Li in brines compared to less sampling of lower concentrations. This declustered mean is considered more appropriate for validation comparisons for the data against the estimate.

Figure 11-17 presents the scatter plot (Li average vs Cell Size) obtained for the de-clustering analysis of the lithium composites. Ultimately, a 2,500 m cell size was selected to calculate de-clustered statistics.

Source: SRK, 2021

Figure 11-17: De-Clustering Analysis Showing Scatter Plot of Cell Size versus Lithium Mean

Figure 11-18 and Figure 11-19 present the scatter plot (Sy average vs Cell Size) obtained for the de-clustering analysis of the Sy composites. Ultimately, 4,000 m and 2,750 m cell sizes were selected to calculate de-clustered statistics for Upper Halite and Volcanic (Volcanic and Ignimbrite) lithologies respectively.


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Source: SRK, 2021

Figure 11-18: De-Clustering Analysis Showing Scatter Plot of Cell Size Versus Sy Mean – Upper Halite Lithology


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Source: SRK, 2021

Figure 11-19: De-Clustering Analysis Showing Scatter Plot of Cell Size versus Sy Mean – Volcanic (Volcanic and Ignimbrite) Lithologies

11.3.4Estimate Validation

SRK undertook a validation of the interpolated model to check that the model represents the input data, the estimation parameters and that the estimate is not biased. Different validation techniques were used, including:

•Visual comparison of lithium grades between block volumes and drillhole samples

•Comparative lithium statistics of de-clustered composites and the alternative estimation methods (OK, ID2 and NN)

•Swath plots for lithium mean block and composite sample comparisons

•Visual comparison and swath plots comparison for Sy in blocks estimated using ID2 and NN in the lithologies Volcanics (Volcanic and Ignimbrite) and Upper Halite

Visual Comparison

Visual validation of drilling data to estimated block grades was completed in 3D. In general, estimated block grades compared well with acceptable correlation from drilling data. Figure 11-20 shows examples of the visual validations in plan view at 2,250 mamsl.


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Source: SRK, 2021

Figure 11-20: Example of Visual Validation of Lithium Grades in Composites Versus Block Model Horizontal Section - Plan View (2,250 mamsl Elevation)

Comparative Statistics

SRK performed a statistical comparison of the de-clustered composites to the estimated blocks to assess the potential for bias in the estimated lithium grades. The comparison included the review of the histograms for lithium and the mean analysis between the blocks and composites from aquifers (Table 11-7).

The mean interpolated lithium values by OK, ID2 and NN are similar and are slightly lower grade than the de-clustered lithium grade. The comparison between data and the blocks is better in the areas with higher density of data, as shown in swath plots comparing the means by area. The interpolated lithium concentrations using the combined OK and ID2 has a better correlation with the data and provides information of the interpolation error and quality.

Table 11-7: Summary of Validation Statistics Composites Versus Estimation Methods (Lithium - Aquifer Data)


Statistic	Declustered Sample Data Li (mg/l)	Block Model (OK-1st pass, ID2-2nd pass)	Ordinary Kriging - Block Data (Volume Weighted) Li (mg/l)	Inverse Distance - Block Data (Volume Weighted) Li (mg/l)	Near Neighbor - Block Data (Volume Weighted) Li (mg/l)
Mean	2,132	1,811	1,791	1,810	1,760
Std Dev	747	449	425	473	597
Variance	557,608	201,274	180,902	223,958	355,988
CV	0.35	0.25	0.24	0.26	0.34

Source: SRK, 2021


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Swath Plots

The swath plots of lithium in X and Z coordinates shown in Figure 11-21 represent a spatial comparison between the mean block grades interpolated using alternative methods and the de-clustered composites. The areas of higher variability between the composites and estimates at Atacama occur in the areas of the deposit with lower quantity of data and where lower lithium grades are observed.

Source: SRK, 2021

Figure 11-21: Lithium (mg/l) - Swath Analysis at Atacama (X and Z Coordinates)


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Figure 11-22 presents the swath plots of Sy in X coordinates. The mean grades of Sy in blocks follow the general behavior of Sy in the composites and Sy estimated by NN method.

Source: SRK, 2021

Figure 11-22: Sy (Fraction) - Swath Analysis at Atacama – Upper Halite Lithology

The QP’s opinion is that the validation through the use of visual comparison, comparative statistics, and swath plots provide a sufficient level of confidence to confirm that the model accurately represents the input data, the estimation parameters are reasonable, and that the estimate is not biased.

11.4Cut-Off Grade Estimates

The CoG calculations are based on assumptions and actual performance of the Salar de Atacama operation. Pricing was selected based on a strategy of utilizing a higher resource price than is used for the reserve estimate. For the purpose of this estimate, the resource price is 10% higher than the reserve price of $10,000/t technical grade lithium carbonate, the basis for which is presented in Section 16.1.3. This results in the use of a resource price of $11,000/t of technical grade lithium carbonate.


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SRK utilized the economic model to estimate the break-even cut-off grade, as discussed in Section 12.3. Applying the $11,000/t lithium price to this methodology resulted in a break-even CoG of approximately 670 mg/L lithium, applicable to the resource estimate.

11.5Resource Classification and Criteria

Resources have been categorized subject to the opinion of the QP based on the amount/robustness of informing data for the estimate, consistency of geological/concentration distribution, survey information, and have been validated against long term production information. Other criteria to support the categories of the resource model were based on the normalized variance, sample distribution, lithology (boreholes), and radius of influence from the pumping wells.

•Measured resources were assigned to areas with high confidence in the aquifer and aquitard geometry and with high density of the lithium samples. From the kriging distribution quality point of view, the blocks with normalized variance under 0.25 were interpreted as measured. Samples collected in a pumping well also represent the brine surrounding at an extent proportional to the hydraulic radius of influence Considering than several of the production wells have been in operation over 20 years, generating a large radius of influence, the measured resource areas were adjusted to include those zones. Blocks within 25% of the radius of influence are classified as measured. Finally, using the QP’s criteria, the distribution of the measured resource was slightly adjusted considering the coverage of boreholes, distribution of lithium samples and the continuity of measured blocks in 3D (Figure 11 20).

•Classification of Indicated resources is done only for those domains with sufficient confidence in the aquifer and aquitard geometry, and sufficient density of the lithium samples. These volumes are very well correlated with the blocks with normalized variance between 0.25 and 0.5. Local inherent variability in the geometry of the aquifers has been considered in this classification and has been manually limited in areas of greater concern.

•Brine hosted aquifers with no or low drill density, and no or low lithium samples, have been classified as Inferred. Inferred also corresponds to the blocks with normalized variance over 0.5. Areas close to the border between the salar nucleus (halite) and transition zones present less confidence in the lithium concentration's continuity, consequently, were also classified as inferred.


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Source: SRK, 2021

Figure 11-23: Model Horizontal Section - Plan View – Blocks Colored by Classification (2,260 masl Elevation)

11.6Uncertainty

SRK considered a number of factors of uncertainty in the classification of the mineral resource estimation:

•The lack of availability of site-specific data for Sy values in some units results in uncertainty associated with estimates of brine volume potentially available for extraction. To mitigate this uncertainty, the values were based on literature data of similar lithology units, studies in Salar de Atacama outside of Albemarle claim areas, and considering the QP’s experience in similar deposits. Additionally, the resource area has a high density of boreholes a good interpretation of the geology, which drives Sy estimates.

•The southeastern zone of the Albemarle claim area is close to the transition zone, which partially covers the upper halite. The presence of undetected lower lithium concentration brines is a potential risk. To mitigate this uncertainty, part of the resources calculated in this zone were classified as inferred.

11.7Summary Mineral Resources

SRK has reported the mineral resources for Salar de Atacama as mineral resource exclusive of reserves as well as inclusive of reserves. The resources are reported between the elevations of 2,299 mamsl, and 2,200 mamsl, which corresponds to the zone of brine with better coverage of sampling.

Mineral Resources Exclusive of Reserves. Table 11-8 presents the mineral resource exclusive of reserves. Resource from brine is contained within the resource aquifers with the estimated reserve deducted from the overall resource. This calculation was completed by calculating total lithium (as lithium metal) projected as being pumped from the aquifer in the reserve production forecast. This


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quantity of lithium (as metal) was directly subtracted from the overall mineral resource estimate. Notably, the resource grade was not changed as part of this exercise. This is because the resource, exclusive of reserve, and reserve do not represent discrete areas of the resource due to the brine aquifer (i.e., the resource) being a dynamic system that moves, mixes and recharges. Therefore, the resource, after extraction of the reserve, in reality would be an entirely new resource, requiring new data and a new estimate. As this is not practical with current data, in the QP’s opinion, it is more appropriate to keep the calculation simple and transparent and utilize this approach. Further, as the dynamic resource precludes direct conversion of measured / indicated resources to proven / probable reserves, in the QP’s opinion, the most reasonable and defensible approach to allocating depletion of the reserve from the resource is to deplete measured and indicated resource proportionate to their contribution to the combined measured and indicated resource. As measured resources comprise 52% of the combined measured an indicated resource, 52% of the reserve depletion was allocated to measured, with the remainder subtracted from indicated. For comparison, proven reserves comprise approximately 52% of the overall reserve (i.e., measured resource is deducted proportionate to the proven reserve).

Mineral Resources Inclusive of Reserves. Table 11-9 presents the brine resources inclusive of the mineral reserve. This includes all unmined/unpumped brine. Further, given the delay in the time of pumping brine to actual production of lithium being approximately two years due to the extended evaporation period, the first two years of lithium production in the economic model are sourced from brine that is in process (i.e., in the evaporation ponds). These first two years of production are included in the reserve as they are in the economic model. Therefore, SRK has also included this brine in the resource, inclusive of reserve. Albemarle tracks the volume and concentration of brine pumped at the salar for production purposes on an ongoing basis. Therefore, to quantify this in process component of the resource, SRK summarized the prior 24 months of pumping data as the in process resource. This component of the resource is reported at the concentration of brine pumped as this is the most reliable point of measurement. SRK classified this component of the resource as measured, given the actual quantity of brine produced was directly measured and therefore has relatively low uncertainty.


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Table 11-8: Salar de Atacama Mineral Resource Estimate, Exclusive of Mineral Reserves (Effective August 31, 2021)

Measured Resource

Indicated Resource

Measured + Indicated Resource

Inferred Resource

Contained Li (Tonnes x 1000)

Brine Concentration (mg/L Li)

Contained Li (Tonnes x 1000)

Brine Concentration (mg/L Li)

Contained Li (Tonnes x 1000)

Brine Concentration (mg/L Li)

Contained Li (Tonnes x 1000)

Brine Concentration (mg/L Li)

Total

717

2,211

687

1,747

1,404

1,959

131

1,593

Source: SRK, 2021

•Mineral resources are reported exclusive of mineral reserves. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

•Resources are reported on an in-situ basis.

•Resources are reported between the elevations of 2,299 masl and 2,200 masl. Resources are reported as lithium metal

•Resources have been categorized subject to the opinion of a QP based on the amount/robustness of informing data for the estimate, consistency of geological/grade distribution, survey information.

•The estimated economic cutoff grade utilized for resource reporting purposes is 670 mg/l lithium, based on the following assumptions:

◦ Recovery factors for the salar operation increase gradually over the span of 4 years, from the current 40% to the proposed SYIP 65% recovery in 2025. After that point, evaporation pond recovery is assumed constant at 65%, considering the installation of a liming plant is assumed in 2027. An additional recovery factor of 80% lithium recovery is applied to the La Negra lithium carbonate plant.

◦A fixed annual average brine pumping rate of 442 liters per second is assumed, consistent with Albemarle’s permit conditions.

◦Sustaining capital costs are included in the cutoff grade calculation and post the SYIP installation, average around US$54M per year.

•Mineral Resources tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding.


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Table 11-9: Salar de Atacama Mineral Resource Estimate, Inclusive of Mineral Reserves (Effective June 30, 2020)


	Measured Resource		Indicated Resource		Measured + Indicated Resource		Inferred Resource
	Contained Li (Tonnes x 1000)	Brine Concentration (mg/L Li)	Contained Li (Tonnes x 1000)	Brine Concentration (mg/L Li)	Contained Li (Tonnes x 1000)	Brine Concentration (mg/L Li)	Contained Li (Tonnes x 1000)	Brine Concentration (mg/L Li)
In Situ	1,029	2,211	966	1,747	1,995	1,959	131	1,593
In Process	24	2,685	-	-	24	2,685	-	-

Source: SRK, 2021

•Mineral resources are reported inclusive of mineral reserves. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

•Resources are reported as in situ and in process. In process resources quantify the prior 24 months of pumping data and reflect the raw brine, at the time of pumping.

•In situ resources are reported between the elevations of 2,299 masl and 2,200 masl.

•Resources are reported as lithium metal

•Resources have been categorized subject to the opinion of a QP based on the amount/robustness of informing data for the estimate, consistency of geological/grade distribution, survey information.

•The estimated economic cutoff grade utilized for resource reporting purposes is 670 mg/l lithium, based on the following assumptions:

◦ Recovery factors for the salar operation increase gradually over the span of 4 years, from the current 40% to the proposed SYIP 65% recovery in 2025. After that point, evaporation pond recovery is assumed constant at 65%, considering the installation of a liming plant is assumed in 2027. An additional recovery factor of 80% lithium recovery is applied to the La Negra lithium carbonate plant.

◦A fixed average annual brine pumping rate of 442 l/s is assumed, consistent with Albemarle’s permit conditions.

◦Sustaining capital costs are included in the cutoff grade calculation and post the SYIP installation, average around US$54M per year.

•Mineral Resources tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding.


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1.8Recommendations and Opinion

It is the QP’s opinion that the aquifers' geometry, brine chemistry composition, and the Sy of the basin sediments have been adequately characterized to support the resource estimate for Salar de Atacama, as classified.

The mineral resources stated herein are appropriate for public disclosure and meet the definitions of measured, indicated and inferred resources established by SEC guidelines and industry standards. Based on the analysis described in this report, the QP’s understanding of resources that are exclusive of reserves, and the project’s status of operating since 1984, in the QP’s opinion, there is reasonable potential for economic extraction of the resource.

The current lithium concentration data and Sy data is mostly located in claims areas A1 and A2. A3 in the eastern zone has less information. A similar situation occurs below 100 m depth, where few screen intervals exist, therefore few samples were collected.

SRK recommends implementing a field campaign in the aquifers within the claim area A3, focused on collecting Sy values. RBRC samples for porosity test in Lower Halite and Lower clastic (if possible); and pumping tests in Upper clastic. Also it is recommended a sample collection campaign from 100 m to 150 m in all areas (A1, A2, and A3).


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12Mineral Reserve Estimates

This section describes the key assumptions, parameters, and methods used to simulate the movement of lithium-rich brines in Salar de Atacama in the process of their extraction, which is utilized to develop the reserve estimate.

12.1Numerical Groundwater Model

A geologically-based, 3D, numerical groundwater-flow and solute transport model was developed to evaluate the extractability of lithium-rich brine from Salar de Atacama. The model construction is based on an analysis of historical hydrogeologic data conducted by ALB and SRK. A 3D geologic model developed by SRK (Local and Regional models), described in Section 11.1, provides the framework of hydrogeologic units used in the numerical model.

The sequence of modeling activities consists of Calibration, Transition, and Production simulations. The time period of each model is described below:

•Calibration: October 1997 to September 2018 (data available for model calibration)

•Transition: October 2018 to August 2021 (validation of the model)

•Prediction: September 2021 to March 2042 (reserve estimate period)

The Transition simulation was designed to simulate the period of time between the end of data available for calibration and the beginning of the reserve simulation. The numerical groundwater flow and transport models were developed using the finite-difference code MODFLOW-SURFACT with the transport module (HydroGeoLogic Inc., 2011) via the Groundwater Vistas graphical user interface (ESI, 2017). The model was calibrated to available historical water level and lithium concentration data. The calibrated model was used to evaluate different production wellfield pumping regimes.

12.1.1Model Domain and Grid

The model domain includes the Nucleus and marginal zone of Salar de Atacama, including halite units, volcanic, and clastic deposits in an area of 2,432 km2 with 843,038 active cells and 16 layers. Model cell sizes vary from 125 by 125 to 340 by 340 m. Model layers vary in thickness from 0.7 m near the salar surface to about 144 m for deeper zones. Figure 12-1 shows the simulated hydrogeological units and breakdown of model layer thicknesses. Model layering was developed to ensure proper representation of the aquifer units within the numerical model. Figure 12-1 shows an oblique 3D view of the model.


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Source: SRK, 2021

Figure 12-1: Oblique 3D View of Numerical Groundwater Model

12.1.2Flow Boundary Conditions

There are three primary natural groundwater inflow processes at Salar de Atacama: recharge by direct precipitation, indirect recharge on catchments surrounding the salar, and infiltration from lagoon/stream systems. There are two primary natural groundwater outflow processes: groundwater discharges from the salar at lower elevations via evapotranspiration and to surface water bodies (lagoons). A schematic of the key boundary condition types is presented in Figure 12-2. Points in this figure represent locations where lateral inflow and lagoon recharge were simulated, the points are labeled according to the recharge source. Color-shaded areas represent the precipitation-derived recharge areas and rates for the steady state simulation.


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Source: SGA, December 2015; SRK 2021

Note: Lateral inflow locations (simulated by injection wells are shown in different colors per Sub-Basin

Figure 12-2: Zones of Direct Recharge and Lateral Groundwater Inflow

Recharge

Direct recharge and lateral recharge location and rates were assumed from previous hydrogeological studies presented to the environmental agencies of Chile (SGA, 2015; and SGA, 2019) and from second update of the salar de Atacama groundwater model for the RCA 21/2016 (VAI, 2021). Direct recharge was simulated in the uppermost active layer as a transient boundary condition, at a monthly temporal resolution. Lateral groundwater recharge was simulated as a transient boundary condition, as injection wells in layers 1 through 16, depending on the lateral recharge location. Minor adjustments were made in the fluxes reported from sub-basins 10 and 11 to represent in more details the lateral recharge from Cordon de Lila. Figure 12-2 shows the distribution of direct recharge


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and the injection wells used for the lateral recharge simulation. Table 12-1 presents the infiltration rates and lateral inflows used for natural groundwater flow conditions (no pumping).

Table 12-1: Recharge Rates and Lateral Inflows Under Natural Conditions


Recharge Component	# Injection Wells	Total Inflow (L/s )
Sub-Basin 6	28	200
Sub-Basin 7	67	425
Sub-Basin 8	13	41
Sub-Basin 9	34	348
Sub-Basin 10a Cone	3	32	611
Sub-Basin 10a South	10	579
Sub-Basin 10b	6	5
Sub-Basin 11	15	90.8	92
Sub-Basin 11a	1	0.4
Sub-Basin 11b	1	0.7
Sub-Basin 12	28	10
Sub-Basin 13	7	92
Sub-Basin 15	5	7
Northern Boundary	86	684
Infiltration Peine Lagoon	6	11.0
Infiltration Soncor Lagoon (Cola Pez)	9	25.0	25.0
Infiltration Soncor Lagoon (DSur)	9	0
Total Recharge from Precipitation	-	316.6

Source: VAI 2021; SRK 2021

Evapotranspiration

Evapotranspiration (ET) rates and spatial distribution were assumed from the previous environmental model (SGA, 2015). ET rates varied on a monthly basis, and ET was applied from the topographic surface to an extinction depth ranging from 1-2 meters below the ground surface. Conservatively, lithium mass was removed with ET, to avoid artificial accumulation of lithium at the ground surface in the model and over-estimation of lithium availability. The spatial distribution of maximum ET rates in the model is shown in Figure 12-3.


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Source: SGA, December 2015; SRK 2021

Note: Values represent average evaporation rates for natural conditions (no pumping)

Figure 12-3: Zones of Simulated Maximum Evapotranspiration Rate

Lagoon/Stream Systems

Four lagoon/stream networks are identified in Salar de Atacama: Soncor, Aguas de Queltana, Peine, and La Punta – La Brava as shown in Figure 12-2. Soncor and Peine lagoons include infiltration from the surface water corresponding to 25 L/s and 11 L/s, respectively (SGA, 2015 and SGA, 2019).


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Surface water is not thought to infiltrate from the Aguas de Queltana and La Punta – La Brava lagoons.

The lagoon/stream networks are simulated as drain cells. Groundwater discharge rates into the lagoon/stream networks were calibrated using the conceptual water balance model for each lagoon/stream zone (Table 12-2).

Table 12-2: Conceptual Rates of Groundwater Discharges into the Lagoon/Stream Systems


Lagoon/Stream System			Flow (L/s)
Soncor			76
Aguas de Quelana			172
Peine			79
La Punta – La Brava			113

Source: SGA, 2016

Infiltration from the Soncor and Peine lagoons into groundwater were simulated as injection wells in the top layer of the model. Lagoon and stream areas are not assigned as an evaporation zone since water evaporating through those cells is controlled by the drain cells.

Location of groundwater discharge zones to lagoons, and infiltration from the lagoons are shown in Figure 12-2.

Pumping Wells and Artificial Recharge

Simulation of the historical brine extraction and freshwater wells by Albemarle and SQM are based on the construction details and historical flow rates presented in the environmental reports of Albemarle and SQM (SQM, 2019; SQM, 2020 and www.sqmsenlinea.com). Details of the pumping rates in time for calibration and prediction are described in sections 12.1.5 and 12.1.6 below.

SQM brine injection was reported at annual average rates up to 397 L/s (SQM 2020). These values were simulated as injection wells in four locations within the SQM property, in the top layer of the model.

Albemarle estimates that loss from operational ponds and stockpiles is up to 5% of the total brine pumping rate as leakage to the groundwater system (0.7 to 15 L/s). Figure 12-4 shows locations of pumping wells in Salar de Atacama (historical pumping). The location of artificial injection wells used to simulate leakage from the Albemarle ponds is also shown in Figure 12-4.


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Source: SRK, 2021

Figure 12-4: Location of Simulated Pumping Wells and Artificial Recharge Zones (Historical)


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Solute -Transport Boundary Conditions

The following lithium concentration values were assumed in the recharge boundary conditions for the solute-transport simulations:

•Lateral recharge from sub-basins (fresh water): 3 to 10 mg/L,

•Flows from the North Boundary: 1,000 mg/L,

•Infiltration from the Soncor and Peine lagoons/stream systems: 700 and 320 mg/L, respectively.

Lithium concentration values mentioned above are constant in time and are based on the hydrochemistry database presented in the environmental reports (SGA, 2019 and SQM, 2020) and in “Hydrogeochemical fluxes and processes contributing to the formation of lithium-enriched brines in a hyper-arid continental basin” (Munk et al., 2018).

Other assumptions for solute transport boundary conditions are as follows:

•Reinjected brines in SQM have concentration 1,000 mg/L of lithium (higher grades are expected in SQM reinjection brines; however, 1,000 mg/L was chosen as a minimum value to limit the “artificial” lithium available for the predicted Albemarle production).

•Seepage from Albemarle operational ponds has lithium concentrations from 1,712 to 78,646 mg/L. These values correspond to the measured concentration operational records provided by Albemarle for this study.

•The effect of the direct recharge on the lithium concentration in the Salar is negligible.

•Evapotranspiration removes lithium form the model (analogous to chemical precipitation).

Figure 12-5 shows the distribution of solute-transport boundary conditions.


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Source: SRK, 2021

Note: Colors in Albemarle ponds are proportional to the leakage concentration

Figure 12-5: Solute-Transport Boundary Conditions

12.1.3Hydraulic and Solute Transport Properties

The hydrogeologic zones specified in the model were derived from the geologic model developed using the Leapfrog Geo software and described in Section 11.1. Aquifer parameters of hydraulic conductivity, specific yield, and specific storage in addition to the transport parameter of effective porosity are specified by hydrogeologic zone in the model.


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Horizontal hydraulic conductivity values used in the model were derived from historical information from Albemarle, SQM, and Corfo as described in Section 7.3 and as a result of the calibration processes. A summary of hydraulic conductivity values per aquifer unit is shown in Table 12-3. These values provided the initial values for use in calibration of the numerical groundwater flow model.

Table 12-3: Hydraulic Conductivity Values Used in the Numerical Model Compared with Measured Data


Hydrogeologic Unit	K
	Measured				Simulated
	#	Average	Maximum	Minimum	Average	Maximum	Minimum
Upper Halite and Others	28	41.6	380	0.0060	1666	6000	0.5
Upper Halite	140	142	5633	0.00003
Upper Halite and Others (Regional)	54	11	200	0.0090	1797	6000	5.9
Upper Halite (Regional)	400	168.3	6000	0.0006
Lower Halite	8	0.1	0.7	0.0001	0.08	0.1	0.05
Lower Halite (Regional)	24	10.9	111	0.0032	0.1	0.1	0.1
Upper Clastic	10	49.1	188.0	0.37	3.54	10	0.03
Lower Clastic	4	4.4	8.0	0.9	0.39	1	0.08
Volcanic/Gypsum/Clastic	22	9.2	86.4	0.0052	17.96	42.37	0.30
Volcanic/Gypsum/Clastic (Regional)	32	0.5	5.2	0.004	0.05	0.05	0.05
Ignimbrite	6	25.6	71.9	0.32	10.17	20	0.33
Sediment East	17	15.1	30.0	1.0	171.67	500	0.01
Sediment West	3	0.4	0.7	0.021	75.1	150	0.2
Transition Zone	51	125	3000	0.001	169.07	500	0.2

Note: # number of tests

Source: SRK 2021

Specific yield (Sy) values were also available in the historical records mentioned in Section 7. Sy values used in the model were derived from those values and adjusted during the calibration process. These values are shown in Table 12-4.

No specific storage (Ss) values were measured in Salar de Atacama. Specific storage values used in the model were derived from the QP’s experience in similar deposits and as a result of the calibration process.


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Table 12-4: Specific Yield and Effective Porosity Values Used in the Numerical Model Compared with Measured Data


Hydrogeologic Unit	Specific Yield							Specific Storage			Porosity
	Measured				Simulated			Simulated			Simulated
	#	Avg	Max	Min	Avg	Max	Min	Avg	Max	Min	Avg	Max	Min
Upper Halite and Others	11	0.098	0.203	0.010	0.07	0.08	0.01	1.8E-06	2.0E-06	1.0E-06	0.10	0.10	0.10
Upper Halite	18	0.126	0.550	0.014
Upper Halite and Others (Regional)	4	0.109	0.340	0.004	0.08	0.08	0.08	2.0E-06	2.0E-06	2.0E-06	0.10	0.10	0.10
Upper Halite (Regional)	43	0.087	0.554	0.006
Lower Halite	1	0.320	0.320	0.320	0.05	0.05	0.05	1.0E-06	1.0E-06	1.0E-06	0.05	0.05	0.05
Lower Halite (Regional)	1	0.406	0.406	0.406	0.05	0.05	0.05	1.0E-06	1.0E-06	1.0E-06	0.05	0.05	0.05
Upper Clastic	5	0.032	0.100	0.001	0.04	0.05	0.02	1.0E-06	1.0E-06	1.0E-06	0.10	0.15	0.05
Lower Clastic	1	0.500	0.500	0.500	0.04	0.05	0.03	1.0E-06	1.0E-06	1.0E-06	0.04	0.05	0.03
Volcanic/Gypsum/Clastic	13	0.145	0.558	0.004	0.05	0.05	0.05	1.0E-06	1.0E-06	1.0E-06	0.09	0.10	0.05
Volcanic/Gypsum/Clastic (Regional)	17	0.168	0.519	0.003	0.05	0.05	0.05	1.6E-06	1.6E-06	1.6E-06	0.05	0.05	0.05
Ignimbrite	0				0.13	0.20	0.05	1.0E-06	1.0E-06	1.0E-06	0.13	0.20	0.05
Sediment East	3	0.003	0.006	0.001	0.13	0.20	0.05	1.0E-06	1.0E-06	1.0E-06	0.14	0.20	0.05
Sediment West	0				0.08	0.10	0.05	1.0E-06	1.0E-06	1.0E-06	0.08	0.10	0.05
Transition Zone	0				0.12	0.20	0.05	1.0E-06	1.0E-06	1.0E-06	0.12	0.20	0.05

Note: # number of tests

Source: SRK 2021

In some units, the average simulated hydraulic conductivity significantly exceeds the measured average values. However, simulated K in most cases ranges between measured maximum and minimum. It should be noted that the calibration period represents the largest hydraulic stress in the groundwater system. The numerical model was able to reproduce this stress by using the simulated hydraulic parameters presented in Table 12-3 and Table 12-4. On the other hand, measured values from pumping and packer tests produce a significantly smaller hydraulic stress, and do not necessarily represent the long-term K and Sy values.

The groundwater model did not simulate density-driven groundwater flow. Therefore, a low-K zone was implemented in the model at the known freshwater/saltwater interface at the margin of the salar, to reduce mixing of lateral freshwater inflows with salt water.

Solute transport properties have no measured values in Salar de Atacama. Dispersion (transversal, longitudinal, and vertical), diffusion and effective porosity were assumed based on the QP’s experience in similar deposits and the calibration process. Table 12-5 present a summary of the simulated solute transport properties. Dispersion and diffusion coefficients were uniformly assigned in the groundwater model.


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Table 12-5: Simulated Other Solute Transport Properties


Transport Parameter		Value	Units
Dispersion Coefficient	Longitudinal	20	(m)
	Transverse	2	(m)
	Vertical	0.2	(m)
Molecular Diffusion		8.64x10-5	(m2/day, model units)
		1x10-9	(m2/s, standard units)

Source: SRK 2021

12.1.4Calibration and Predictive Simulations Simulated Pre-Development Conditions

Lithium mining activities occurred before 1997; however, there are no reliable data of pumping rates, water levels, or lithium concentration for that period. The pre-development model simulates equilibrium conditions before 1997 considering natural groundwater flow conditions only (no pumping). Even though this steady-state model represents a starting point for the calibration process and does not represent a target of calibration by itself, the conceptual hydrologic fluxes in Salar de Atacama (VAi, 2021) were used as calibration targets in this model. Table 12-6 shows the conceptual and simulated fluxes for the pre-pumping natural conditions. The intermedial marginal zone has 42.7% of discrepancy, however it represents a small part of the total flux in the nucleus, which has 3.9% of discrepancy.


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Table 12-6: Simulated Hydrologic Fluxes for Steady-State Conditions


Zone		Inflows (L/s)				Outflows (L/s)		Discrepancy (%)
		Conceptual Hydrologic Balance		Simulated		Conceptual Hydrologic Balance	Simulated
		Groundwater	Stream/Lagoon	Groundwater	Stream/Lagoon	Total	Total
Sub-Basins Reporting to Marginal Zone	SubC 6	200	14	200	8.5	214	177	-17.1%
	SubC 7	425	7	425	6.9	436	380	-12.9%
	SubC 8 & 9	389	9	389	5.5	398	417	4.8%
	SubC 10a *	611	4	611	2.2	615	586	-4.7%
	Subtotal	1,625	34	1,625	23.2	1,663	1,560	-6.2%
Nucleus	Intermedial Marginal Zone **	-	59	0	59	202	288	42.7%
	Nucleus ***	0	265	0	270	1,057	1,020	-3.5%
	Lateral Recharge from West	207	0	207	0	-	0	0.0%
	Lateral Recharge from North	684	0	684	0	-	0	0.0%
	Subtotal	891	324	891	329.0	1,259	1,308	3.9%
Total		2,516	358	2,516	352.2	2,922	2,868	-1.8%

Source: SRK, 2021

(*) Sub-basin 10b is not included in the original Hydrologic Balance

(**) Infiltration form Soncor Lagoon (25 L/s) is included

(***) Infiltration form Peine Lagoon (11 L/s) is included


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The 3D distribution of lithium concentrations in the model domain, as initial conditions for the transient calibration simulation, were calculated from interpolation of available concentration data. Geochemical data at the Albemarle property are not available prior to the year 1999. Moreover, most monitoring locations had continuous lithium concentration data from recent years only. Outside the Albemarle claims, a few data points in the shallow subsurface were available from Kunasz and Bell (1979) and several from SQM (SQM, 2020) with data from 2011 and 2017-2018. To achieve a salar-wide distribution of lithium, average concentrations from each location – 431 in total – were interpolated in 3D space using a kriging technique via the Vulcan software (Maptek Pty Ltd, 2019). The kriging parameters and zonation were similar to those used for the resource estimate, as described in Section 11.

12.1.5Simulated Historical Operations

The transient calibration model of historical lithium mining activities was simulated from November 1997 through September 2018. Historical water levels, lithium concentration, and achieved pumping rates served as calibration targets.

Groundwater levels from 182 monitoring wells across the entire Salar de Atacama were used for water level calibration, with a total of 20,786 individual water level measurements during the transient calibration period. These water level measurements were obtained from an Albemarle historical database included in the 2019 environmental report (SGA, 2019) and Albemarle operational database; and from an SQM environmental report (SQM, 2020).

Lithium concentrations in groundwater were available for 86 monitoring locations, with a total number of 5,282 individual concentration measurements during the transient calibration period. The earliest available concentration data were from January of 1999. Lithium concentration data were obtained from the Albemarle historical database (Albemarle, 2021).

Historical brine pumping from 92 wells and 10 trenches on the Albemarle property were available through August 2021, and from 180 wells on the SQM property through July 2021. Albemarle freshwater withdrawal from three wells were available through August 2021 and SQM freshwater withdrawal from six wells through August 2021. A timeline of historical Albemarle and SQM pumping rates is provided in Figure 12-6, along with SQM brine injection rates (four locations). The total simulated Albemarle pond seepage did not surpass 5% of the total brine pumping rate.


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Note: Graphs include transition period (October 2018 to August 2021)

Source: SRK 2021

Figure 12-6: Pumping Rates used for Transient Calibration

Figure 12-7 presents the comparison between observed and simulated water levels at the year 2018 (average data in form of a quality line), i.e., at the end of the transient calibration period. Table 12-7 lists calibration statistics for this period. A notable statistic is the scaled root mean square error (RMSE) of 4.3. An RMSE statistic below 10% is generally considered as adequate calibration. Several representative hydrographs showing observed and simulated water levels over time are included in Figure 12-8. The top 12 hydrographs are from monitoring locations on the Albemarle property, while the bottom three are from other locations in the salar. Overall, in the QP’s opinion, simulated water levels replicate observed water levels well.


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Source: SRK 2021

Figure 12-7: Comparison of Simulated and Observed Water Levels in the Year 2018 (Average Data)


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Table 12-7: Statistics of Transient Model Calibration to Observed Water Levels, 2018 Average

Source: SRK, 2021

(1) Where R is the residual (observed minus simulated)


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Source: SRK 2021

Figure 12-8: Water Level Comparison Hydrographs in Select Wells

The overall groundwater budget for the end of the transient simulation is presented in Table 12-8. The overall water balance error is –1.8% for the transient calibration period, which support a valid solution for the numerical simulation.


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Table 12-8: Water Balance at End of Transient Calibration (Sep 2018)


Flow Component			Flow Rate (L/s)
Inputs to Groundwater System
Recharge
Lateral			2,407
Direct Precipitation			-
Lagunas			50
Artificial Injection
SQM Injection			315
Albemarle Pond Leakage			15
Groundwater Storage Release			611
Total			3,398
Outputs from Groundwater System
Evapotranspiration			1,409
Surface Water Outflow			125
Pumping
Albemarle Freshwater Extraction			6
Albemarle Brine Extraction			321
SQM Freshwater Extraction			172
SQM Brine Extraction			1,012
Groundwater Storage Replenishment			415
Total			3,459
Percent Difference			-1.8%

Source: SRK 2021

Figure 12-9 A presents calibration to lithium concentrations for the year 2018, with data points grouped by the monitoring location according to Albemarle claim properties (A1 through A3), and outside the Albemarle property. Figure 12-9 B focuses only on targets at the Albemarle property, with circle sizes corresponding to historical operational pumping rates at each location (smallest circle sizes indicate monitoring wells without pumping). Table 12-9 provides a statistical summary for this calibration. Overall, the model tends to underpredict lithium concentrations on the Albemarle property for 2018, which suggests a conservative starting point for the predictive simulations.


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Source: SRK 2021

Figure 12-9: Observed vs Simulated Lithium Concentrations,) All Calibration Targets, B) Targets on Albemarle Property, Circle Size 2018 Averages. A Weighted by Historical Operational Pumping Rate.


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Table 12-9: Statistics of Transient Model Calibration to Lithium Concentrations, 2018 Average

Source: SRK 2021

Figure 12-10 A shows the average lithium concentration in the extracted brine, both historical and simulated. The model tends to overpredict concentrations in the beginning of the simulation, when overall pumping rates are low, and underpredicts average concentrations starting in 2019. This underestimation is interpreted to reflect a conservative starting point for the predictive simulations. Another measure of calibration quality is shown in Figure 12-10 B, where simulated cumulative mass of historically-extracted lithium by Albemarle is compared to known calculated produced mass from two water quality data databases provided to SRK. In SRK’s opinion, the model reasonably reproduces the cumulative extraction of lithium over time.

The average lithium mass transfer rates in the calibration period are shown in the Table 12-10. As expected, pumping wells represent the main loss of lithium mass from groundwater (247,700 kilograms per day [kg/d]), followed by evaporation (88,430 kg/d). The main source of lithium gains in groundwater is groundwater storage, and to a minor degree, the artificial injection and natural lateral recharge.


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Table 12-10: Average Lithium Mass Transfer Rate for Calibration Period


Component			Mass Rate (Kg/day)
Lithium Gain in Groundwater
Boundary Recharge and artificial recharge (ALB ponds and SQM Injection)			87,320
Storage Release			373,150
Total Gain			460,470
Lithium Loss in Groundwater
Pumping wells			246,700
Surface Water (Drain cells)			6,320
Plant Uptake and Chemical Precipitation			88,430
Storage Replenishment			119,020
Total Loss			460,470
Percent Difference			0.00%

Source: SRK 2021

Source: SRK 2021

Notes: Graphs include transition period (October 2018 to August 2021). Brinechem is the primary hydro-chemical database prepared by Albemarle. Chemistry_dt is the alternative hydro-chemical data base prepared by Albemarle.

Figure 12-10: Comparison of Measured and Simulated Average Lithium Concentration and Cumulative Lithium Mass Extraction

Calibration of the model to mass extracted by the production wellfield annually and comparison of simulated to observed lithium concentration versus cumulative production pumping are both reasonable. Calibration of the model to the mass extraction rate at the end of 2018 also looks reasonable. It is SRK’s opinion that the numerical model adequately represents the historical and


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current wellfield production of lithium from the basin and can be used for future production plans to support a reserve estimate

Validation period has a reasonable representation of the simulated water levels. The calibration graph shows an average residual mean of 0.88 and scaled RMS of 5.4%. Figure 12-11 present the average calibration during the year 2021.

Figure 12-11: Comparison of Simulated and Observed Water Levels in the Year 2021 (Average Data)

12.1.6Predictive Simulations

Predictive simulations include a transition period from October 2018 to August 2021, and a production plan period from September 2021 to March 2042 (end of pumping).

Historical brine pumping data from the Albemarle property were available through August 2021; in addition, planned production pumping for September 2021 through March 2042 were available (Albemarle pumping plan 2020 was assumed). Projected Albemarle brine pumping includes 72 wells and trenches, with pumping rates up to 30 L/s for a given well location and from 315 to 532 L/s for the entire system (Albemarle, 2020). Details of well location and screen intervals are explained in Section 13.

Projected SQM brine pumping rates were used in the transition and predictive models starting in October 2018 and are scheduled to terminate at the end of December 2030 (SQM, 2020). Projected


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SQM brine pumping includes 144 wells, with pumping rates up to 112.1 L/s for a given location and from 616 to 2,723 L/s for the entire system.

Brine pumping rates for the Albemarle and SQM properties are shown in Figure 12-12 and well locations are shown in Figure 12-13. Seepage from the Albemarle processing ponds and brine injections at the SQM property were not included in the base case predictive simulation.

Source: SRK 2021

Figure 12-12: Simulated Brine Total Planned Pumping Rates for The Albemarle and SQM Properties


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Source: SRK 2021

Figure 12-13: Location of the Pumping Wells at Albemarle and SQM Properties Used for Predictive Simulations


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Projected Albemarle freshwater withdrawals were assumed to be constant throughout the predictive simulations. Projected SQM freshwater withdrawals correspond to maximum legal flowrate (240 L/s). Projected freshwater pumping rates are listed in Table 12-11.

Table 12-11: Simulated Predictive Freshwater Withdrawals


Owner			Projected Pumping Rate (L/s)
Albemarle			18.1
SQM			240.0

Source: SRK, 2021

A summary of groundwater inflows and outflows at the end of the transient calibration, the end of SQM brine pumping, and at the end of Albemarle pumping are presented in Table 12-12. Recharge inputs to the groundwater system and evapotranspiration outputs vary among the time snapshots because they represent different months of the year. However, decline in evapotranspiration and surface water outflows from September 2018 to March 2042 can be attributed to the decline in water levels in the salar and along its margins. The water balance error averages 1.2% for the predictive model period. Figure 12-14 shows all the components of the water balance in the calibration and predictive periods.

Table 12-12: Groundwater Balance Summary


Flow Component	End of Transient Calibration (Sep 2018)	End of SQM Extraction (Dec 2030)	End of Albemarle Extraction (March 2042)
Inflows to Groundwater System
Recharge
Lateral	2,407	2,374	2,312
Direct Precipitation	-	-	14
Infiltration from Lagunas	50	-	36
Artificial Injection/Infiltration
SQM Injection	315	-	-
Albemarle Pond Leakage	15	-	-
Groundwater Storage Release	611	2,710	179
Total	3,398	5,083	2,540
Outflows from Groundwater System
Evapotranspiration	1,409	1,711	1,571
Surface Water Outflow	125	55	56
Pumping
Albemarle Freshwater	6	16	16
Albemarle Brine	321	469	499
SQM Freshwater	172	240	-
SQM Brine	1,012	2,618	-
Groundwater Storage Replenishment	415	16	367
Total	3,459	5,126	2,509
Percent Difference	-1.8%	-0.85%	1.22%

Source: SRK 2021


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Source: SRK, 2021

Figure 12-14: Components of Water Balance for All Simulated Periods


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Lithium mass flux components throughout all simulated periods are shown in Figure 12-15 and the distribution of the simulated lithium concentration in Figure 12-16. Solute transport simulation presents a percent difference lower than 0.01% during calibration and predictive model periods.


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Source: SRK 2021

Figure 12-15: Components of Lithium Mass Transfer Rate for All Simulated Periods


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Figure 12-16: Distribution of Simulated Lithium Concentration in the beginning and End of the Prediction Period


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12.2Mineral Reserves Estimates

Using the hydrogeologic properties of the salar combined with the wellfield design parameters, the rate and volume of lithium projected to be extracted from the Project area was simulated using the predictive model. The predictive model output generated a brine production profile appropriate for the salar based upon the wellfield design assumptions with a maximum pumping rate of 442 L/s (i.e., maximum authorized extraction rate) over a period of 21 years (through March 2042). The use of a 21-year period reflects the timing required to extract the full, authorized quota of lithium production. Given the approximately two years delay in timing from pumping to final production, this also is the last year that extraction from the salar can be reasonably expected to still result in lithium produced by the 2043 expiry of Albemarle’s production quota. See Section 16.3.1 for more discussion of the quota and regulatory limits on lithium extraction.

The predicted monthly and annual average extracted lithium concentrations, and the predicted cumulative mass of lithium extracted from groundwater at the Albemarle property are plotted in Figure 12-17. The annual-average lithium concentrations, mass lithium in extracted brine, annual-average pumping rates and annual volumetric brine pumping are summarized in Table 12-13. Additional details on the wellfield design and pumping schedule are discussed in Section 13.

SRK cautions that this prediction is a forward-looking estimate and is subject to change depending upon operating approach (e.g., pumping rate, well location/depth) and inherent geological uncertainty. The schedule includes summaries for observed pumping and lithium from 2018 through the August of 2021 as this production is required to support the first 24 months of production in the economic model. This brine is currently going through the evaporation process, is treated as work in process inventory and is reported separately on the reserve table for clarity.

The seasonal concentration fluctuations in Figure 12-18 correspond to seasonal fluctuations in pumping rates. The predictive model simulates a decline of annual-average lithium concentrations from 2,221 mg/L in last trimester of 2021 to 1,830 mg/L at the end of pumping (March 2042). Annual lithium mass extraction from groundwater is predicted to decline from 31,563 MT in the year 2022 (first full year of pumping) to 26,447 MT in the year 2041, and lastly to 7,171 MT in the year 2042 (note that pumping is scheduled for 3 months in 2042). The predicted cumulative lithium mass extraction, from September 2021 to March 2042, is 590,862. Figure 12-18 shows the projected annual mass of lithium extracted by production wellfield.


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Source: SRK, 2021

Figure 12-17: Projected Wellfield Average Lithium Concentration


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Table 12-13: Predicted Lithium and Brine Extractions


Period	Li Mass	Pumping		Li Conc.
	Li Mass (MT)	Rate (L/s)	Vol (m3)	mg/L
2021 Sep-Dec	11,285	482	5,076,315	2,223
2022	31,563	441	13,913,454	2,268
2023	31,157	442	13,924,730	2,238
2024	31,149	442	13,974,710	2,229
2025	30,696	442	13,930,955	2,203
2026	30,392	442	13,930,955	2,182
2027	29,939	442	13,930,955	2,149
2028	29,510	442	13,974,710	2,112
2029	29,020	442	13,930,955	2,083
2030	28,727	442	13,930,955	2,062
2031	28,447	442	13,930,955	2,042
2032	28,280	442	13,974,710	2,024
2033	27,958	442	13,930,955	2,007
2034	27,694	442	13,930,955	1,988
2035	27,474	442	13,930,955	1,972
2036	27,351	442	13,974,710	1,957
2037	27,052	442	13,930,955	1,942
2038	26,837	442	13,930,955	1,926
2039	26,569	442	13,930,955	1,907
2040	26,447	442	13,974,710	1,893
2041	26,145	442	13,930,955	1,877
2042 Jan - Mar	7,171	493	3,919,362	1,830

Source: SRK 2021

Source: SRK

Figure 12-18: Projected Annual Mass of Lithium Extracted by Production Wellfield


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12.3Cut-Off Grades Estimates

Due to the extraction of lithium from the aquifer, combined with mixing of freshwater inflows or low-grade brines, the concentration of lithium in brine pumped from the mineral resource decreases over time. While there is some ability to selectively extract areas of the mineral resource with higher grades by targeting the location of new extraction wells, the impact of dilution cannot be fully avoided. Therefore, as the brine concentration declines over time, the quantity of lithium production, for the same pumping rate, also declines. As lithium brine production operations have relatively high fixed costs, eventually the quantity of lithium contained in the extracted brine is not adequate to cover the cost of operating the business.

As discussed in Section 19, the economic model provides positive operating cash flow for the entire life of the reserve, so it is clear that the entirety of the reserve estimated herein is above the economic cutoff grade, utilizing the assumptions described in that section. This includes the use of a long-term price assumption for technical grade lithium carbonate of $10,000/t (see Section 16 for discussion on the basis of this assumption).

While the pumping plan supporting this reserve estimate is above the economic cutoff grade for the operation, for the purposes of disclosure and resource estimation, SRK calculated an approximate breakeven cutoff grade for the operation. To calculate the breakeven cutoff grade, SRK utilized the economic model and manually adjusted the input brine concentration downward until the after-tax cash flow hit a value of zero. This estimate effectively includes all operating costs in the business as well as sustaining capital with other inputs such as lower process recovery with lower concentration also being accounted for. Note that expansion capital in the model (effectively the cost to complete La Negra III) has been excluded as it is more appropriately viewed as development capital, in the QP’s opinion, and therefore not typically included in a cutoff grade estimate.

Based on this modeling exercise, SRK estimates that the breakeven cutoff grade at the assumptions outlined in Section 19, including the reserve price of $10,000 / metric tonne of technical grade lithium carbonate, is approximately 783 mg/l Li (for comparison, the last year of pumping in the approximately 21-year life of mine plan has a lithium concentration of 1,940 mg/l).

12.4Reserves Classification and Criteria


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the remainder (10.3 years) of production classified as probable. Notably, this results in approximately 49% of the reserve being classified as proven and 51% of the reserve being classified as probable. For comparison, the measured resource comprises approximately 52% of the total measured and indicated resource. In the QP’s opinion, this is reasonable as the overall geological and technical uncertainty for the Salar de Atacama resource and reserve are similar.

12.5Summary Mineral Reserves

The estimation of mineral reserves herein has been completed in accordance with CFR 17, Part 229 (S-K 1300). Mineral reserves were estimated utilizing a lithium carbonate price of US$10,000/t of technical grade Li2CO3. Appropriate modifying factors have been applied as discussed through this report. The positive economic profile of the mineral reserve is supported by the economic modeling discussed in Section 19 of this report.

Table 12-14 presents the Salar de Atacama mineral reserves as of August 31, 2021.


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Table 12-14: Salar de Atacama Mineral Reserves, Effective August 31, 2021


	Proven Reserve		Probable Reserve		Proven and Probable Reserve
	Contained Li (Metric Tonnes x 1000)	Li Concentration (mg/L)	Contained Li (Metric Tonnes x 1000)	Li Concentration (mg/L)	Contained Li (Metric Tonnes Li x 1000)	Li Concentration (mg/L)
In Situ	312	2,162	279	1,948	591	2,061
In Process	24	2,685	0	0	24	2,685

Source: SRK, 2021

•Proven reserves have been estimated as the lithium mass pumped during Years 2020 through 2030 of the proposed Life of Mine plan

•Probable reserves have been estimated as the lithium mass pumped from 2030 until the end of the proposed Life of Mine plan (2041)

•Reserves are reported as lithium metal

◦A technical grade lithium carbonate price of US$10,000 / metric tonne CIF Asia.

◦A fixed average annual brine pumping rate of 442 l/s is assumed, consistent with Albemarle’s permit conditions.

◦Sustaining capital costs are included in the cutoff grade calculation and post the SYIP installation, average around US$54M per year.

•Mineral reserve tonnage, grade and mass yield have been rounded to reflect the accuracy of the estimate and numbers may not add due to rounding.


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In the QP’s opinion, key points of uncertainty associated with the modifying factors in this reserve estimate that could have a material impact on the reserve include the following:

•Resource dilution: the reserve estimate included in this report assumes that the salar brine is replenished at its boundaries at certain rates and with certain chemical composition. Changes in the rate of inflows, versus those assumed, will impact the reserve. For example, an increase in the magnitude of lateral flows into the salar could act to dilute the brine and reduce lithium concentrations in extraction wells, primarily in the southwest area of the Albemarle property. Figure 12-19 compares simulations with an increasing in the lithium concentration in the inflows from sub-catchment 11 (scenarios 2 and 3). These scenarios show minimum changes in the predicted average lithium concentration.

•Initial lithium concentration: The current initial concentration was estimated based on the best data available by space distribution and date (2018 –2019 sampling campaign), which was assigned to the year 1999 as initial condition for calibration purposes. This assumption underestimates the lithium concentration at the beginning of the production. In order to illustrate this effect of the initial lithium concentration, the lithium distribution mentioned above was set up at the end of the transition model (August 2021). As a result, the average lithium concentrations increase by 9% (Figure 12-19, scenario 1).

•Seepage from processing ponds: the predictive simulations did not consider potential seepage of concentrated brine from the processing pond. Such seepage may have two opposing effects: on one hand loss of lithium mass between extraction from groundwater and production of lithium carbonate at the end of the concentration process, and on the other hand replenishing groundwater with lithium that could be captured by extraction wells. Figure 12-19 compares the annual-averaged lithium concentration in extracted brine, between the base estimate, which does not include pond seepage, and a predictive simulation with pond seepage up to 2% and 5% of extracted brine (scenarios 6 and 7)). This example sensitivity simulation predicts that pond seepage would result in average lithium concentrations increase of approximately 10% at the end of production as compared to the base case.

•Freshwater/brine mixing: the numerical model implicitly simulated the density separation of lateral freshwater recharge and salar brine by imposing a low-conductivity zone at the brine-freshwater interface. It is possible that lateral recharge of freshwater into the salar may increase without this restriction, as the water table declines as a result of pumping and reducing the amount of freshwater lost to evaporation at the periphery of the salar. Figure 12-19 compares the base case annual-averaged lithium in extracted brine with a scenario where the hydraulic conductivity at the freshwater/brine interface was increased by half an order of magnitude (scenario 4). This scenario resulted in no material change compared to the base case.


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specific yields lower than assumed in the numerical model would result in reduced pumpability and reduced lithium mass extraction. Specific yields and porosities lower than assumed in the model would lead to faster migration of fresh / brackish water from the edges of the salar and dilution of lithium concentrations in extraction wells. Figure 12-19 is a sensitivity that compares the base case estimate of annual-averaged extracted lithium with a scenario where effective porosities in the upper part of the salar were reduced by 20% (scenario 5). This scenario resulted in average lithium concentrations reduction of approximately 5% at the end of production as compared to the base case.

•Lithium carbonate price: although the pumping plan remains above the economic cutoff grade discussed in Section 12.33, commodity prices, can have significant volatility which could result in a shortened reserve life.

•Process recovery: the ability to extract the full lithium production quota within the defined production period relies upon the ability to increase recovery rates of lithium in the evaporation ponds from historic levels of approximately 40% to a target of approximately 65%. This will require updating the process flow sheet at the salar to reduce lithium losses to precipitated salts. In the QP’s opinion, the assumed recovery rates are reasonable; however, there remains uncertainty in performance of the new process and any material underperformance to these targets could limit Albemarle’s ability to extract its full lithium quota prior to expiry of the quota.

•Lithium production quota: the current production quota acts as a hard stop on the estimated reserve both from a total production mass and time standpoint. The expiry date for production of this lithium is 2043. If raw brine grades, pumping rates or process recoveries underperform forecasts and Albemarle cannot produce the full quota by 2043, this potential reserve will be lost (i.e., it cannot recover lost production in later years and cannot pump faster than the regulatory limit of 442 l/s to offset any underperformance). Conversely, with lithium grades well above economic cutoff and approximately 30% of the estimated mineral resource converting to reserve, the potential to negotiate an additional production quota with the government of Chile presents an opportunity to increase the current reserve, which is artificially constrained by the current quota.


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Source: SRK 2021

Figure 12-19: Comparison of Predicted Extracted Lithium Concentration between Base Case and Sensitivity Scenarios


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13Mining Methods

The extraction method for the reserve is pumping of the raw brine from the aquifer utilizing a network of wells and trenches. This method of brine extraction has been used at the Salar de Atacama since 1984. As will be discussed in detail in Section 14, the extracted brine is concentrated using solar energy in a series of evaporation ponds prior to final processing in the lithium carbonate production plant at La Negra.

The brine extraction equipment includes a number of submersible pumps installed inside the production wells whose diameter is variable, generally between 10 inches and 14 inches. The pumps extract a brine with at rate between 5 and 30 L/s.

Shallow wells generally have a depth between 25 and 50 m. The wells walls are stable and have low risk of collapse, which facilitates the entry of brine into the well, thus reducing load losses. In deep wells, which typically have a depth of around 90 m, a seal is normally installed in the annular space of the upper part to a depth of about 25 to 40 m. A screen section is typically installed at the bottom well interval from around 50 m to 90 m.

In RCA 21/2016, which authorized the rate of brine extraction to increase to 300 L/s (achieving the combined 442 L/s combined in areas A1 and A2), the position of pumping wells is not set to pre-determined coordinates. Therefore, as wells degrade from flow depletion, excessive dynamic levels or operational problems and are replaced, they may be set at the same location or moved if desired to optimize pumping results.

For the deep wells, the provisional authorization to pump 120 L/s up to 200 m deep ends in August 2023. By that date, Albemarle will need a new authorization, or an extension of the current one to sustain pumping from deep wells. If not, the operational depth of the deep wells (i.e., the screen interval) must be adjusted to a depth of 50 m or less. SRK’s Life of Mine (LoM) production plan assumes the authorization is not received and pumping reverts to only shallow wells.

HDPE lines, typically 8 inches in diameter from the pumping system feed the pre-concentrator ponds, which are large ponds that regulate the brine chemistry (calcium and sulfate). Another set of HDPE lines, generally 8 inches in diameter, move brine by pumping from the pre-concentration ponds to feed the five evaporation pond systems.

The following elements can be found in the typical scheme of a pumping well:

•Pump

•Impulse pipe

•Valve

•Flow meter

•Split valve

•Backflow valve

•8-inch HDPE pipe to the ponds

Additional equipment at the pump site include a diesel generator, a pump control panel that monitors the pump's working frequency, perimeter fencing, and a telemetry system. Figure 13-1 and Figure 13-2 show the detail of the pumping equipment.


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Source: GWI, 2019

Figure 13-1: Pumping Well Installation


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Source: GWI, 2019

Figure 13-2: Surface Pumping Equipment

Other equipment utilized at site to support mining operations is drilling and salt harvesting equipment. Drilling and installation of new production wells is completed by contractors and Albemarle does not own this equipment. Approximately 250 people are assigned to the Salar operations, 100 of them directly to the processing operation.

13.1Wellfield Design

A total of 72 to 75 production wells are modeled to support the annual average permitted brine pumping rate of 442 L/s from 2020 to 2041. The permit details extracting an annual average of 360 L/s from extraction area A1 and an annual average of 82 L/s from the extraction area A2. For reference the A1 and A2 areas can be seen in Figure 7-6.

The schedule considers a reduction of number of wells and screen intervals in July 2023, according to the expiration of the provisional authorization to pump from the deep wells (August 2023). This scenario assumes a restriction in the pumping capacity, if the provisional authorization is extended beyond August 2023, the potential pumpability of the production wells will be increased. The schedule of active production wells is shown in Table 13-1.

Based on information provided by Albemarle, existing production wells require periodic replacement of approximately 5 to 10 wells per year, on average, for the current wellfield. For the purposes of this reserve estimate, SRK has assumed replacement of 10 wells for each full


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year of production (2021 and 2042 as a trimester assumes three wells). A map showing the predicted locations for the LoM production wells is presented in Figure 13-3.

Table 13-1: Wellfield Development Schedule


Period	Number Active Wells at Start of Period	Number Replacement Wells	Number Wells Removed	Number New Wells	Total Number Wells Drilled	Number Active Wells at End of Year
Sept.2021	73	3	0	0	3	72
2022	72	10	0	0	10	72
2023	72	10	17	17	27	72
2024	72	10	0	0	10	72
2025	72	10	0	0	10	72
2026	72	10	0	0	10	72
2027	72	10	0	0	10	72
2028	72	10	0	0	10	72
2029	72	10	0	0	10	72
2030	72	10	0	0	10	72
2031	72	10	0	0	10	72
2032	72	10	0	0	10	72
2033	72	10	0	0	10	72
2034	72	10	0	0	10	72
2035	72	10	0	0	10	72
2036	72	10	0	0	10	72
2037	72	10	0	0	10	72
2038	72	10	0	0	10	72
2039	72	10	0	0	10	72
2040	72	10	0	0	10	72
2041	72	10	0	0	10	72
March 2042	72	3	0	0	3	72

Source: SRK 2021


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Note: Wells with screen interval below 50 m depth are considered deep wells.

Source: SRK 2021

Figure 13-3: Predicted Life of Mine Well Location Map and Average pumping Rate

13.2Production Schedule

A total of 75 wells locations were used to simulate brine production at the Salar de Atacama. The pumping schedule for the simulation is shown on Figure 13-4. Production was maintained at 72 of the wells from year 2024 to 2042.


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Source: SRK 2021

Figure 13-4: Operational Schedule of Production Wells


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Pumping rates per well range from being turned off with no flow up to 28.25 L/s: only 10 wells pump above 10 L/s. The yearly average total pumping rate for the combined wellfield is 442 L/s. Maximum pumping occurs in January (up to 540 L/s) and minimum pumping in June (300 L/s). Figure 13-5 shows the pumped volume per year.

Source: SRK 2021

Figure 13-5: Pumped Volume and Predicted Lithium Concentration

Factors such as mining dilution and recovery are implicitly captured by the predictive numerical model. Reporting of these factors is not practical due to the disconnect between the static resource model and the dynamic predictive model utilized for reserve estimation as well as other factors such as mixing of brine during production.

Simulated pumped volume generates a drawdown up to 25 m in the pumping wells, it includes simulated drawdown in the model cells, and accounts for corrections due to cell-size and estimated well efficiency. Considering the max depth of production wells is 50 m the saturated thickness in the well is sufficient to support the planned pumping rate.


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14Processing and Recovery Methods

Albemarle's operations in Chile are in two separate areas, the Salar de Atacama and La Negra. The Salar de Atacama operation extracts lithium brines from groundwater wells. These brines are discharged to solar evaporation ponds to concentrate the lithium brine, which is then transferred to the La Negra plant by tanker truck for processing. The La Negra plant refines and purifies the lithium brines, producing both technical and battery grade lithium carbonate. Albemarle has also historically produced lithium chloride product although it does not forecast this production in the future.

At the salar, the lithium chloride brine concentration process is carried out by solar evaporation in concentration ponds. The objective of the process is to obtain a concentrated lithium chloride brine of around 6% lithium, which is transported to the La Negra chemical plant for further processing. A basic flowsheet for the salar is presented in Figure 14-1. As seen in this figure, beyond the concentration of lithium, there is also a potash (KCl) plant for byproduct potash production. Albemarle also harvests halite and bischofite salts as byproduct production for third party sales.

Source: Albemarle, 2019

Figure 14-1: Salar Process Flow Sheet

The La Negra plant receives the concentrated brine from the salar, and the brine is further processed with several purification steps followed by the conversion of the lithium from a chloride to a lithium carbonate. A basic flow sheet for the La Negra process is presented in Figure 14-2.


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Source: Albemarle, 2021

Figure 14-2: La Negra Process Flow Sheet

14.1Salar de Atacama Processing

The process of concentrating the raw brine pumped from the aquifer to the concentrated brine shipped to La Negra is made possible by the favorable weather conditions of the Salar de Atacama (the area’s evaporation rate is 1,270 to 1,780 millimeters (mm) (50 to 70 inches per year) with very little rainfall most years (10 to 30 mm), but on rare occasions there are heavy storms. The solar radiation in the area is high, the relative humidity as low as 5% and moderately intense winds rise in the afternoons) and the high solubility of the lithium in this type of brine. The process consists of evaporating water from the brine utilizing solar energy, resulting in a fractional crystallization of salts and the progressive increase in the lithium concentration in the brine until reaching the final stage.

Source: GWI, 2019

Figure 14-3: Evaporation Ponds


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14.1.1Solar Evaporation

Evaporation ponds are arranged in “systems” of 15 ponds, with five total systems at the operation, for a total of 75 ponds. As the brine progresses through the pond system, sequential evaporation and precipitation removes unwanted deleterious elements and by products through five stages of fractional precipitation (Figure 14-4). The evaporation sequence essentially follows a process of increasing brine concentration from approximately 0.2% Li in the raw brine to 4.3% Li in a series of solar ponds with only limited formation of complex lithium-bearing salts (i.e., limited loss of lithium with most of the losses to bischofite) through precipitation, as shown in Stages 1 through 4 in Figure 14-4. During concentration from 4.3% Li to the final target of around 6% Li (Stage 5), a lithium carnallite salt forms and precipitates. Lithium-rich brines entrained in the bischofite harvest (Stage 4) are drained and recovered and a portion of the entrained lithium-rich brine as well as lithium sulfate precipitate from Stage 5 (lithium carnallite precipitation) is recovered through washing and dissolution with a natural brine.

Source: Albemarle, 2019

Figure 14-4: Lithium Brine Evaporation Stages

During the course of solar evaporation, almost all of the sodium and potassium are precipitated and about 95% of the magnesium. By concentrating up to 6% of lithium, saturation of all salts is achieved, and the brine behaves like molten salt of lithium carnallite and bischofite. The 6% Li brine is loaded into trucks and transported to La Negra.

Four km2 of solar evaporation ponds are required for the current annual production rate of approximately 45,000 t/y of LCE. Expansions to 8.4 km2 (836 ha) of solar ponds are underway for a brine input flow of 442 L/s with a target of more than 80,000 t/y LCE production, when incorporating the SYIP. The brine concentration process takes 18 to 24 months and is characterized by changing brine colors as the concentration of the desired salts increases and by-products drop out and are harvested (Figure 14-5). Salts that will not be processed for muriate of potash (MOP) are stacked as waste near the ponds.


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Source: Albemarle, 2018

Figure 14-5: Aerial View of ALB Evaporation Ponds

One of the key features of the concentration strategy at the salar is the ratio of calcium to sulfate in the brine that is processed in the ponds. The Salar de Atacama brine is generally sulfate-rich although it has areas that are calcium-rich. To limit losses of lithium during the concentration process, a blend of these calcium and sulfate-rich brines must be maintained. By blending the calcium-rich brine with the sulfate-rich brine an initial precipitate of gypsum is formed, removing much of the calcium and reducing the sulfate to a level that prevents significant losses of lithium to sylvinite as KLiSO4. Going forward, based on the life of mine pumping plan, SRK predicts this balance of calcium-rich to sulfate-rich brine will not be maintained. This pumping plan shows a lack of calcium-rich brine starting in 2027. Based on this prediction, SRK has assumed a liming plant will be required at the start of 2027 to add calcium to the system to offset this reduction in calcium content in the blended brine feeding the evaporation ponds, however this could be also solved by optimizing the pumping plan for next years instead of keeping it fixed. Given the extended time until this assumed liming plant is required (i.e., five years), Albemarle has yet to complete the metallurgical testwork supporting this addition and the use of lime versus other alternatives (e.g., CaCl2) has not been set as a final decision. However, given the use of lime to reduce sulfate content in lithium brine operations is standard technology (in use at Albemarle’s Silver Peak operation as well as


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Orocobre’s Olaroz operation), in SRK’s opinion, this approach presents limited risk to future Salar de Atacama operations and this reserve estimate. Further, the current pumping plan has not been optimized to manage the Ca:SO4 ratio and it may be possible to further delay the need to add calcium to the system with further evaluation (to date, this has not been a priority given it is still a longer-term issue).

Potash Production

The potash precipitated as sylvinite and carnallite is harvested from the ponds to produce MOP. The production of KCl from the Potash Plant has historically averaged around 136,000 t/y. The production capacity was authorized environmentally through resolutions issued by the Regional Environment Commission of the Second Region. Potash is not included in this reserve estimate or the project economics and therefore the potash plant is not described herein.

14.1.2Salar Yield Improvement Program

As part of Albemarle’s strategy to expand lithium production rates from the current level of around 45,000 t LCE/yr to the targeted level of more than 80,000 t LCE/yr, Albemarle is targeting reducing lithium losses in evaporation ponds from current recovery. Albemarle refers to this strategy as the salar yield improvement program or SYIP. In support of this effort, in 2017, one of which targets recovering lithium from bischofite salts and the second targets recovering additional lithium from the lithium-carnallite salts. Both options utilize a similar strategy, including crushing/milling of the harvested salts before vat leaching with a dilute brine to recover a portion of the entrained lithium while limiting dissolution of the contained magnesium. Figure 14-6 presents the design layout for this facility. Section 10 presents summary information on the metallurgical testwork completed to support this project, but the expectation is that the SYIP will increase process lithium recovery up to a target of around 65%.

The SYIP was originally intended to enter production in 2021. However, due to recent depressed lithium markets it was delayed. Although a new timeline for development is not yet set, SRK has assumed primary construction activities will occur in 2022 and 2023 and the plant will come online in 2024.


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Source: Albemarle, 2019

Figure 14-6: SYIP Facility Layout

14.2La Negra Plant

The last stages of brine purification and the conversion stage to lithium carbonate are carried out at the La Negra Plant. Lithium chloride and both battery and technical grade lithium carbonate have been historically produced at La Negra. Going forward, Albemarle does not plan to produce lithium chloride and will limit future production to technical and battery grade lithium carbonate.

There are currently two process trains in production, La Negra 1 and La Negra 2 which have a production capacity of approximately 45,000 t LCE per year. A third production train, La Negra 3, is currently under development and forecast to increase the La Negra production capacity to around 84,000 t LCE per year. All three production trains utilize a similar flow sheet.

The primary process steps that occur at La Negra include boron removal with solvent extraction, impurity removal through chemical precipitation, lithium production utilizing chemical precipitation and final washing/drying/packaging (Figure 14-7).


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Source: Adenda EIA, SGA, 2015

Figure 14-7: La Negra Flow Sheet


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The mass balance for La Negra in its current configuration (i.e., La Negra 1 and La Negra 2) and associated with Figure 14-7 is presented in Table 14-1. As the La Negra 3 flow sheet is similar to La Negra 1 and La Negra 2, scaling up to the future targeted 84,000 tonne per year production rate would generally scale these mass flows proportionately.

Table 14-1: La Negra Mass Balance


Process	Figure 14-7 Reference	Annual Mass Flow (tonnes)
Brine for solvent extraction	A1	180,000
Hydrochloric Acid HCl for solvent extraction	A2	1,957
H2SO4 Sulfuric Acid for solvent extraction	A3	468
Solvent	A4	131
Extractant	A5	56
Water for solvent extraction	A6	156,000
Lime for purification	A7	7,322
Soda Ash	A8	79,966
HCl Hydrochloric Acid	A9	627
Industrial water	A10	19,021
Sulfuric Acid H2SO4	A11	264
Water dilution	A12	5,430
Water for the treated water system	A13	440,235
Flow	1	182,613
Flow	2	169,297
Flow	3	88,925
RIL Water with Boron	B1	156,000
RIS Mg (OH) 2 / CaCO3	B2	32,629
Water vapor drying Lithium Carbonate TG	B3	16,920
Technical Grade Lithium Carbonate (TG)	B4	25,380
Dried Water Steam Lithium Carbonate BG	B5	3,526
Battery Grade Lithium Carbonate (BG)	B6	19,980
Mother Liquor Purge	B7	83,329
Mother Liquor Purge	B8	105,713
Purge Liquor Mother of the wash	B9	463,356
Emissions of Hydrochloric Acid HCl 32%	B10	0.44
Hydrochloric Acid HCl 32%	C1	1,024
50% NaOH Sodium Hydroxide	C2	328
Water for dilution of NaOH and HCl	C3	27,314
Disposal water from the neutralization pond	D1	13,312

Source: Adenda EIA, SGA, 2015

14.2.1Boron Removal

The concentrated brine from the Salar is received at La Negra with a nominal concentration of 0.8% by weight of boron. Boron is considered a contaminant and this boron content needs to be reduced to a value less than 10 ppm. This boron removal stage is completed utilizing a solvent extraction (SX) process (Figure 14-8).


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Source: GWI, 2019

Figure 14-8: Boron Removal Scheme by Solvent Extraction


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The concentrated brine is acidified using hydrochloric acid. The acidified brine is mixed with an organic solution of an extractant and a solvent in mixing tanks that maximize the contact between the phases, where the boron is selectively extracted from the aqueous phase of the brine. After the stirring time between the aqueous and organic phases, both immiscible with each other, they are separated in a settler tank.

The purified brine obtained from the settlers goes to the next stage of brine purification. The organic is treated with extraction water in a stripping unit to remove the boron. The low boron organic stream is reused in the extraction stage, with a solvent and extractant make up to compensate for the organic and carryover losses. The wastewater is collected in evaporation ponds.

14.2.2Calcium and Magnesium Removal

The refined brine obtained in the SX stage must be processed to eliminate the remaining impurities, which are mainly magnesium and calcium. These impurities are removed from the brine through chemical precipitation, settling, filtration (Figure 14-9).


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Source: GWI, 2019

Figure 14-9: Scheme Removal of Calcium and Magnesium by Precipitation with CaO and Na2CO3


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The refined brine from the boron SX enters the magnesium reactor, where it is mixed with lime in a stirred tank to precipitate magnesium as magnesium hydroxide. Then, the suspension is pumped to the calcium reactor, which is also stirred, where it is mixed with a recirculating solution from the carbonation process (mother liquor) and a sodium carbonate solution to precipitate calcium carbonate.

The resulting pulp is sent to a clarifier and the underflow is filtered to recover the lithium chloride solution which feeds the lithium carbonate plant. The overflow goes directly to a finishing filter to remove fine solids. The purified brine is sent to storage tanks for later use. The filtered cake is disposed of as a solid residue.

14.2.3Lithium Carbonate Precipitation and Packaging

With the boron, calcium and magnesium impurities removed, the brine is ready for the carbonation process, which is utilized to produce lithium carbonate.

The purified brine is divided into a series of trains, each having three stirred reactors in series where the purified brine reacts with sodium carbonate in solution. Each reactor train has a fourth tank at the end that serve as homogenizers, from which the slurry is sent to a solid-liquid separation system utilizing hyrdrocyclones / filters or centrifuges before drying (Figure 14-10).


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Source: GWI, 2019

Figure 14-10: Scheme of Obtaining Lithium Carbonate by Precipitation with Na2CO3


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Subsequently, the dry product is stored in silos and distributed in the dry area for the manufacture and packaging of the different product formats, both technical grade (TG) and battery grade (BG):

•Li2CO3 TG Compacted

•Li2CO3 TG Compacted Pharmaceutical Grade

•Li2CO3 TG Granule

•Li2CO3 TG Fine-60

•Li2CO3 TG Fine-140

•Li2CO3 BG Fine-40

•Li2CO3 TG 1040 Extra Fine Grade

•Li2CO3 TG 1040 Fine Grade

•Li2CO3 TG Coarse Crystals

14.3Process Design Assumptions

One of the key limiting factors for Albemarle is the permitted brine extraction rate. Historically, the brine extraction permit allowed for an annual average of 142 L/s. In October 2016, a quarterly increase of 60 L/s began until the new annual average of 442 L/s was reached, which corresponds to the current extraction rate. With this flow, for a 365-day year, approximately 14 million m3 are extracted from the aquifer, equivalent to 171 kt LCE with an average lithium concentration of 0.20%.

Historically, the recovery of lithium in the salar has been around 50% although this has ranged from 40% to closer to 55%. For the purposes of this reserve estimate, SRK has assumed the current recovery rate of 40% will be maintained through 2023. In 2024, SRK assumes the two salt treatment plants associated with the SYIP will come into operation and forecasts an increase in the lithium recovery rate to 65%. Notably, Albemarle has already added a process to drain the bischofite salts which should improve short-term recovery beyond historic performance. However, data is not available to quantify the performance increase for this drainage process and SRK has therefore maintained historic recovery levels as a conservative approach.

At La Negra, the current process recovery is approximately 80% and SRK has assumed that La Negra maintains this recovery rate. The production of lithium carbonate at La Negra is driven by the concentrated brine dispatched from the salar. As noted above, the current combined La Negra 1/La Negra 2 production capacity is approximately 45,000 t LCE per year. Construction on La Negra 3 is anticipated to be completed in 2021 with commissioning and ramp-up starting that year. La Negra 3 is forecast by SRK to achieve a full, targeted production capacity of 84,000 t lithium carbonate in 2024 (Figure 14-11). The 84,000 t/y maximum production capacity is held constant for the remainder of the mine life through 2043.


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Source: SRK, 2021

Figure 14-11: Forecast La Negra Annual Production Capacity

14.3.1Process Consumables

Key reagents and associated forecast consumption rates are provided in Table 14-2. Note that these reagents are all utilized at La Negra and can vary depending upon the final product mix produced. While some reagents are consumed at the salar, these are all currently utilized in potash production (excluded from this reserve estimate). In the future, if lime addition is required at the salar to maintain lithium recovery rates, as assumed by SRK (see Section 14.1.1), additional lime will be required beyond that reported in the table. This assumed future lime consumption is variable and based on the forecast SO4/Ca ratio.

Table 14-2: Current Process Consumables


Item			Consumption Rate
Soda Ash			2.27 tonne/tonne LCE sold
Lime			0.21 tonne/tonne LCE sold
HCl			0.11 tonne/tonne LCE sold
Water			14.3 tonne/tonne LCE sold

Source: SRK, 2021

Other reagents/consumables utilized in the process include the following:

•Caustic soda

•Sulfuric acid

•Solvent

•Extractant

•Flocculants


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•Diatomaceous earth

•Oxalic acid

•Barium chloride

•Carbon dioxide

•Lithium hydroxide

•Energy consumption is covered in Section

Personnel at the salar currently utilized in the process component of the operation average around 100 and those at La Negra average around 250.


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15Infrastructure

The project is a mature functioning operation with two separate sites that contain key facilities. Access is fully developed, with the majority accessible by paved major highway and local improved roadways on site. A local air strip services the Salar operations. The Antofagasta airport is the nearest major commercial airport servicing the La Negra operation (the Calama airport is the closet major commercial airport to the salar). The infrastructure is in place, operating and provides all necessary support for ongoing operations as summarized in this report.

Final products from the La Negra plant are delivered to clients by truck, rail, or through two port facilities near the plant.

15.1Access, Roads, and Local Communities

15.1.1Access

The project is located in north central Chile in the Antofagasta region. Primary access is from Antofagasta or Calama, the major cities in the region. The major plant facilities are at two separate sites. The refining plant site (La Negra) is closest to Antofogasta, near the small community of La Negra. Travel from Antofogasta to the La Negra refining plant site is approximately 20 km southeast on the major paved, four-lane, Chile Route 28. At La Negra, the Albemarle La Negra site is approximately 2 km north from the intersection of Route 28 on the multi-lane, paved, Chile Route 5 (the Panamerican Highway).

From the La Negra plant to the source of the lithium brine at the Salar de Atacama, where the Albemarle Salar facilities are located, is approximately 250 km to the east. Access from La Negra is north via Route 5, approximately 75 km, and then east on paved highway B-385 for


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approximately 175 km. The Albemarle Salar site is on the south-central area of the Salar de Atacama.

Figure 15-1 shows the general location of the project.

Source: SRK, 2020

Figure 15-1: General Project Major Facility Location

15.1.2Airport

Antofagasta has an international airport, but primary flights are national, and it is the primary airport for the region. The city of Calama, located approximately 190 km to the northwest of the Salar, has the closest commercial airport to the Salar. A smaller airport is located at the Salar for direct access. This air strip is located at the south end of the Salar facilities. The site air strip is for smaller jets and prop planes and is approximately 2,235 m in length and has a clay surface.

15.1.3Rail

A rail owned and operated by Ferrocarril de Antofagasta a Bolivia (FCAB) exists about 80 km south of the Salar site at Pan de Azucar, connecting to La Negra, approximately 170 km away, that had been used historically for moving concentrated brine. It is no longer used as all brine is trucked directly to La Negra. The La Negra facility does not have access to the rail system as this time.

15.1.4Port Facilities

Port facilities are located in Antofagasta within 20 km of the La Negra plant. The medium size coastal breakwater port has facilities for both container and bulk transport. The port can accommodate ships over 150 m in length. Figure 15-2 shows the port facilities. An additional port facility is the Port of Mejillones 80 km from La Negra to the south.


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Source: Google Earth/SRK, 2020

Figure 15-2: Antofagasta Port

15.1.5Local Communities

The majority (nearly 95%) of the 438 employees who work at La Negra live in the City of Antofagasta and its suburbs. Antofagasta is the regional capital and major population center, with approximately 440,000 people living there. Employees are bussed approximately 25 km to the La Negra plant.

Personnel who work at the Salar Plant travel from around the region. Table 15-1 shows the regional communities, population, distance to the Salar Plant and approximate number of employees in each community. Nearly 85% of the employees live in Antofagasta, San Pedro de


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Atacama or Calama. There are 27 communities in the Other Communities category where employees reside with one to four employees living in each community. Figure 15-3 shows the communities where most employees reside. Most employees travel to site by company bus.

A company camp is located in Peine approximately 30 km east of the Salar Plant. The camp consists of 10 houses with a capacity of 77 persons. There is also a hotel with 26 single rooms and five modules with five-person capacity. The 250 people that work on site on various rotations stay at the camp along with approximately 51 contractor personnel. A company bus provides transportation from the camp to site and back.

A second camp known as the Chépica Camp permitted for approximately 600 people is permitted and the first phase has been constructed (300 people) and is use with a second phase (300 additional people) planned as needed with future expansions. The camp is located approximately 2 km to the east of the Salar plant.

Table 15-1: Regional Community Information for the Salar Plant


City	Number of Employees	Population	Distance to Salar Plant (km)
Antofagasta	101	440,000	250
San Pedro de Atacama	80	4,000	130
Calama	28	150,000	190
Other Communities	41	Varies	Varies
Total	250

Source :SRK, 2020

Source: Albemarle, 2020

Figure 15-3: Regional Communities


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There are an additional 48 people that work in the corporate offices in Santiago and support the production activities. Santiago is the capital of Chile and the major population center for the country with a population of approximately 6.8 million in the metro area. Santiago is approximately 1,600 km south of the Salar Plant, traveling through Antofagasta.

15.2Facilities

15.2.1Salar Plant

The Salar plant located in the mining concession area consists of lithium-rich brine recovery wells, pipeline delivery system to the concentration/evaporation pond systems and two leaching plants that create a concentrated brine product that is shipped by truck to La Negra for further processing. Additionally, a potassium processing and drying plant creates a co-product, potassium chloride also commonly referred to a muriate of potash (MOP).

Other site facilities include the salt harvest storage areas, fuel storage and fueling systems, electrical delivery and distribution systems, airfield, security guard house, warehouses, change room, dining room, administrative office building, maintenance facilities, operations building, and laboratory.

Figure 15-4 shows the Salar plant layout.

Source: SRK, 2020

Figure 15-4: Salar Plant Facilities


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Future expansion work includes the addition of the SYIP (described in Secion 14 and a power system upgrade that will add a new 23kV powerline from the Sistema Eléctrico Nacional (SEN) transmission system to a new substation located north of the power plant. The power upgrade is further discussed in Section 15.4.1.

15.2.2La Negra Plant

Source: SRK, 2020

Figure 15-5: La Negra Plant Facilities

Lithium Chloride Conversion Plant

The lithium chloride conversion plant consists a three-level building, service buildings, control room and supporting equipment buildings. Inside the main building is a system of four reactors with "scrubber", a press filter, storage ponds, a distiller and four cooling towers, a crystallizer, a centrifuge, a rotary dryer and a cooler.

Calcium and Magnesium Removal Plant

The calcium and magnesium removal plant has four reactors for the treatment of calcium and magnesium. In addition, it has a clarifier and solid-liquid separation equipment.


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Boron Removal Plant

The plant consists of a multilevel process tower, service buildings, control room, maintenance shop and other minor facilities.

Lithium Carbonate Conversion Plants

The carbonate conversion plant consists of six reactor trains and a serial homogenization reactor, referred to as LAN 1, LAN 2 and LAN 3. In particular, for LAN 1 there is a hydrocyclone plus a filter press. While for the other trains (LAN 2 and LAN 3) there are centrifuges. Rotary-type drying systems are also included in the plant.

Evaporation-Sedimentation Ponds

Five ponds are located on-site for storage of industrial waste (three evaporation and two sedimentation). The ponds cover a total area of 60 ha.

"Off Site" Area

The “Off Site” area includes liquid storage ponds, reverse osmosis plant and preparation reactors.

Dry Area

The dry area of the process facility includes grinding systems, compactors, granulators and storage silos.

Support Facilities

The support facilities include a container yard, water reservoirs, access roads, smaller sheds and maintenance workshops, among others.

15.3Energy

15.3.1Power

Salar Area

Power is supplied to the Salar Plant area via on site generation by a central diesel fueled generation plant. The generating plant is 2.4 MW. The generation plan is made up of three Caterpillar C-18 generator sets rated at 508kW each and one Caterpillar C-32 with a capacity of 880 kW. The gensets operate based on load requirements, typically with two to three units operating and one unit on standby. Additionally, 1.7 MW of distributed generation is used on the site with 70 separate small generators used for the individual well pumps. The individual generator sets range from 16 kW to 63 kW in size. The largest number of units are either 16 kW or 24 kW. Finally, there are two 421 kW generator sets located at the Chépica Camp site. This brings the total installed generating capacity to 4.9 MW.

The primary electricity consumption is the potassium plant using nearly 90% of the total electricity on site. Annual consumption for the last three years averaged just over 6 million kWh per year. The Phase 1 addition of the SYIP will add approximately 2 MW additional load.

Table 15-2 shows the percentage use by load center.


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Table 15-2: Salar Plant Electricity Consumption by Load Center


Primary Loads			Percent of Total
Potash Plant			87%
Carnalite Conversion Plant			0%
Lithium Plant			2%
Peine			9%
Lixiviation Number 1			1%
Total			100%

Source: Albemarle, 2020

The power system will be upgraded with the addition of a new substation, a 35 km 23 kV transmission line that will tie into the local SEN system at the SS Tap Off West owned by AES Gener, and 6 km of 13.8 kV transmission line on site to support the local distribution system, once this system is connected the diesel power plant will perform as a backup. Construction will occur in 2021 and the system is planned to be in service in 2022. The connection will reduce the use of diesel significantly.

La Negra

Power is available from the 110 KVA Norte Grande Interconnected System (SING) Network. Local diesel generation is available as a backup system for critical systems. The total installed load on site is approximately 29 MVA.

Table 15-3 shows the primary loads.

Table 15-3: La Negra Primary Electrical Loads


Primary Loads			Installed Capacity (MVA)
Evaporator Terminal			6.5
LAN 3, PF 5.1, PF 5.2, PF 6.1			4.5
LAN 1, Two Step, PF 3, PF 3.5, Central Lab			4.5
LAN 2, PF 4			4
One Step 2			2
One Step , SAS Wetting System			2
SAS Phase Thickening/Dilution, SX3, North Tank Farm, Brine unloading			2
Chloride Plant, SX1			1.5
Sodium Plant, SX 2			1
Cafeteria, Admin offices, contractor facilities, training room, project offices, investigation laboratory			0.5
Truck shop, North Guard Shack, North dining room			0.15
Water Treatment Plant			0.075
Hazardous Waste Storage			0.075
Total			28.8

Source: Albemarle, 2020

15.3.2Natural Gas

Salar Plant

The Salar Plant does not use natural gas or propane.


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La Negra Plant

The primary source for process and heating at La Negra is natural gas. The gas is supplied by pipeline. The primary use is for drying and water heating/steam generation. The primary loads are summarized in Table 15-4.

Table 15-4: Primary Natural Gas Loads

Energy

Natural Gas Consumption

Location

Equipment

Make

Min

Max

Units

Gas Pressure

Units

Min

Max

Units

Chloride Plant

Direct Dryer

Cleaver Brooks

2,041

20,412

MBTU/h

200

psi

Nm3/h

Boiler

Maxon

750

1,600

MBTU/h

m3/h

Plant 1

Hurst Water Boiler

John Zink Co.

12,320

12,600

MBTU/h

349

357

m3/h

Terminco Thermopack oil fluid heater

Fulton

800

MBTU/h

m3/h

Direct Dryer 1

S/I

7,931

MBTU/h

m3/h

Direct Dryer 2

Etchegoyen

3,470

MBTU/h

m3/h

Plant 2

Water heater

North American

46,200

MBTU/h

125

psi

330

1308

US gph

Indirect heater

Cleaver Brooks

3,999

4,000

MBTU/h

113

m3/h

Plant 3/4

Indirect heater

Stelter&Brinck

2,650

11,400

MBTU/h

psi

306

Nm3/h

Total

21,760

108,413

MBTU/h

Source: Albemarle (modified by SRK), 2020

Propane is not used at the La Negra plant. It is available as a backup fuel sources from Antofagasta by tanker truck.

15.3.3Fuel

Salar Plant

The Salar plant has fuel storage on site including two diesel tanks that are 120,000 liters and 60,000 liters. A smaller 15,000 liter tanks hold gasoline. Fuel is supplied by a regional supplier. The fuel is delivered to site by over the road tanker trucks from Antofagasta every other day.

La Negra Plant

No fuel is stored at the La Negra plant.

15.4Water and Pipelines

Albemarle has water rights granted by the General Water Directorate (DGA) for those wells where fresh water is extracted, which is used as industrial water for the process. The water rights correspond to the wells located in Tilopozo (8.5 L/s), Tucucaro (10 L/s), and Peine (5 L/s), with a total right to extract 23.5 L/s, of which the Tilopozo and Tucucaro wells are currently used, for a total of 16.9 L/s. Water from the Peine well is provide by 6 inch HDPE pipe to the Peine camp 20,000 m3 covered storage pond. The Tilipozo well discharges into an 8 inch pipe that reports to a 2,000 m3 post-processing thickening pond. The Tucucaro well feeds a 6 inch pipe that also discharges to the same post-processing thickening pond. It should be noted that, for brine extraction wells, no groundwater rights are required, as this corresponds to the extraction of a mineral resource.


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In La Negra there is are two wells that have water rights granted by the DGA for the extraction of 13 L/s. Well 1 North is permitted at 6 L/s and Well 2 South is permitted at 7 L/s. Additional water can be supplied by a local water system.


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16Market Studies

SRK was engaged by Albemarle to perform a preliminary market study to support resource and reserve estimates for Albemarle’s mining operations. This report covers the Salar de Atacama and associated La Negra processing facility. The combined Salar de Atacama/La Negra facilities primarily produce lithium products and the market study supporting this reserve estimate is specific to lithium production.

The Salar de Atacama operation also produces potash (potassium chloride), bichofite, halite and sylvinite as byproducts for commercial sale. However, the production of these byproducts has limited materiality to the economics of the operation. Therefore, SRK did not include these products in its estimate of reserves for the operation and did not complete a market study regarding sale of these products.

16.1Market Information

This section presents the summary findings for the preliminary market study completed by SRK on lithium.

16.1.1Lithium Market Introduction

Lithium is currently recovered from hard rock sources and evaporative brines. Current and potential future hard rock sources include minerals such as spodumene, lepidolite, petalite, zinnwaldite, jadarite, and lithium-bearing clays. Most brine operations pump a chloride-sulfate rich solution in which most of lithium occurs as lithium chloride (LiCl) (there is more limited production and production potential from carbonate brines). For the rest of this document, unless specifically noted, when referring to brine production SRK will be referring to chloride brines, and when referring to hard rock, again unless specifically noted, SRK will be referring to spodumene. This is to minimize the complexity of this explanation and given these are the dominant forms of production from both sources, this simplification covers the majority of current and future production sources.

For use in batteries appropriate for electric vehicles, lithium is generally used in either a carbonate or hydroxide form. For this type of production, both brine and hard rock sources require separation of lithium and then conversion to a form that can be purified into a feed solution to produce lithium carbonate, which is then converted to a hydroxide or, in some cases, directly produces lithium hydroxide. Current practice allows direct production of lithium carbonate from either brines or hard rock sources, whereas only hard rock sources directly produce lithium hydroxide (brine operations all first produce lithium carbonate which is then


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converted to hydroxide, if desired). However, multiple parties are evaluating the potential to produce lithium hydroxide directly from a brine source, and there is a reasonable probability this dynamic will change over time.

For existing producers, the major differences in cost between brine and hard rock include the following:

•Hard rock sources require additional mining, concentrating, and roasting/leaching costs.

•Brine sources require concentration prior to production, as natural brine solutions are generally too diluted to allow for precipitation of lithium in a salable form.

•Brine sources generally have a higher level of impurities (in solution) that require removal.

16.1.2Lithium Demand

In recent years, the lithium industry has gone through an evolution. The ceramic and glass sectors were traditionally the largest source of demand for lithium products globally. However, the development boom in demand for mobile consumer applications reliant upon lithium ion batteries has structurally changed the industry. Much of this change, through approximately 2015, was driven by devices such as phones, laptop computers, tablet computers, and other devices (e.g., speakers, lights, wearables, etc.), as well as small mobility devices (e.g., electric bikes). However, the use of lithium in the recent nascent adoption of BEVs has quickly become the most important aspect of overall lithium demand, not just within the battery sector of demand, but for lithium demand on whole. This is seen in Figure 16-1, with BEV market share rapidly growing in importance and driving overall demand growth in the lithium industry.


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Source: SRK, 2021

Figure 16-1: Global Electric Vehicle Lithium Demand

Nonetheless, acceleration in the growth of the BEV industry appears to have a high probability. Demand growth in 2019 and 2020 were relatively disappointing but were likely driven by external factors (e.g., changes in BEV subsidies in jurisdictions such as China as well as the global COVID-19 pandemic) that have largely moved through the system. Even with COVID-19 still a major health issue, SRK believes the lockdowns of early 2020 that created major economic damage will not be repeated as governments are learning to better manage the disease. Most auto makers and other industry participants have invested heavily to expand into BEV production and transition overall toward expectations of future dominant consumption of EVs instead of internal combustion engine (ICE)-based vehicles. However, in SRK’s opinion, there remain several barriers to BEVs becoming the dominant type of vehicle sales, including:

•Costs

•Changes to buyer perceptions

•Raw material availability

Currently, for BEVs to have a range that is competitive with ICE-powered cars, they have to have a large and expensive battery pack. Based on recent estimates by Bloomberg New Energy Finance (BNEF), in 2020, the battery pack comprised approximately one third of the total up-front cost of a new BEV. For higher end vehicles, this cost is manageable in the context of the overall vehicle cost. However, for entry level vehicles, the cost of the battery pack remains a hurdle to BEVs being competitive with ICE cars. The price of batteries has been rapidly decreasing as the scale of production has increased and technological advances have focused on cost reduction. A 2020 prediction by BNEF assumes that these trends will continue and the threshold where BEVs become generally affordable (US$90/kWh on unit basis for the battery pack) is predicted to occur in 2024 (BNEF, 2020).

Consumer preference is a major barrier that will have to be passed to allow widespread adoption of BEVs. Currently, SRK believes this is an issue because many of the auto


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manufacturers have treated BEVs as niche vehicles that were meant to appeal to buyers wishing to make a statement. While this works for the niche population that wishes their vehicle to make such a statement (i.e., following the Toyota Prius strategy), a typical buyer will likely be turned off by this style of marketing. Further, to date, auto manufactures have focused on developing electric vehicles as sedans and compact cars and have not targeted the booming SUV and pickup truck market. However, these trends are changing, with Tesla producing cars that have widespread appeal from a style standpoint and take advantage of the inherent performance advantages of BEVs (e.g., outperformance relative to ICEs for handling and acceleration) and not surprisingly leading all other global manufacturers in BEV sales. In addition, SUV-type BEV models started sales in 2020 and BEV pickup truck sales are expected to start in 2021.

In SRK’s opinion, raw materials and supply chain limitations are the other major risk to widespread EV adoption. SRK does not expect this bottleneck to come from lithium, at least in the short- to mid-term (longer term, it may become an issue, but widespread recycling will likely mitigate this risk). Downstream production (e.g., battery-grade lithium carbonate/hydroxide, cathode precursor, cathodes, batteries, etc.) also appears to have a low risk of creating a bottleneck, as extensive investment in this manufacturing capacity has already happened and continues. However, other raw materials, especially nickel and cobalt, both of which are critical to the key cathode technology of NMC and NCA, appear to create future supply risk. SRK believes it is likely that additional nickel supply can be developed at a cost (i.e., higher nickel prices will be required), but adequate cobalt supply to maintain current levels of cobalt in batteries will likely not be feasible. The most likely solution to this bottleneck will be the elimination (or reduction to minimal levels) of cobalt in BEV batteries through technological improvements.

Beyond these three primary barriers, SRK does not view other potential barriers (e.g., charging infrastructure, substitution away from personal vehicle ownership, etc.) to be major hurdles to widespread adoption of BEVs.

Overall, given the discussion above, SRK expects near- to mid-term growth in the BEV market to pick back up from the two recent relatively slow growth years. However, there remains the risk that BEVs stay a niche vehicle or are eliminated completely. The most serious risks that SRK can foresee are technology related, such as substitution of alternative technology (e.g., fuel cells make a comeback), battery costs plateau, and BEVs remain uncompetitive on low-cost vehicles or cobalt cannot be substituted out of batteries and adequate supply cannot be sourced. Under any of these three scenarios, demand for lithium from BEVs would be severely curtailed (if not eliminated). However, overall SRK does not view these downside scenarios as the most likely outcomes for the sector.

To quantify potential demand growth, SRK constructed a basic demand model. In its model, SRK ran three scenarios through 2029:

•The first scenario, as the base case, assumes that demand growth will slowly pick back up in 2021 and start to really accelerate in 2022 as reduced costs make EVs fully competitive and the wide range of new models proposed by the major auto manufacturers can appeal to the average consumer. At this point, demand growth accelerates again until EVs reach 20% market share (2024), at which point demand


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growth starts to slow but remains robust, reaching 40% of overall vehicle demand in 2027 and continuing to grow at a slower rate through the end of the model period (2029).

•The second scenario, as the high scenario, assumes that demand growth accelerates more quickly (2021 as a major growth year), accelerates into the early 2020s as battery prices fall, and then starts to slow as EVs reach 20% market penetration (likely limited by manufacturing capacity), but continues at a faster growth rate than the base case with 40% market penetration by 2026 and more than 60% by 2029. This scenario is feasible if new BEV models are highly desirable to consumers, subsidies can bridge the gap to battery costs dropping to the point that BEVs are cheaper to buy than economy gas powered vehicles (i.e., sub US$60/kWh battery costs), and the manufacturing supply chain can support this growth. Alternatively, even with somewhat slower personal consumer purchases of BEVs, significant uptake of commercial vehicles, such as large trucks and taxis, or major growth in grid or home power storage could also drive this scenario.

•The third scenario, as the low scenario reflects a potential scenario where the auto industry does not transition to lithium-based BEVs presenting a significant component of global transportation. This could reflect an alternative power source being developed for individual and commercial transportation that does not use lithium (e.g., fuel cells or alternative battery technologies) or simply the inability to bring lithium battery costs to a competitive level with BEVs never developing beyond a niche product. The demand assumption is that demand growth does not recover in Q4 2020 and stays flat for an extended period into the mid-2020s. At this point, with either inexpensive batteries as part of the transportation mix or alternative use of lithium batteries (e.g., grid power or commercial transportation), growth slowly picks up. Under this significantly curtailed growth scenario, BEV sales do not exceed 5% of global vehicle sales in the model period.

16.1.3Lithium Supply

Lithium supply is currently sourced from two types of lithium deposit: hard rock (spodumene, lepidolite, and petalite minerals) and concentrated saline brines hosted within evaporite basins (largely salt flats in Chile, Argentina, and Bolivia termed salars). Exploration and technical studies are currently ongoing on three additional types of deposits: hectorite clay deposits, a unique hard rock deposit with a lithium-boron mineral named Jadarite, and other deep brines (e.g., geothermal and oil field). Although, extensive study has been completed on these alternate lithium sources, they have not yet been commercially developed.

Currently (i.e., 2020), approximately 48% of lithium produced comes from brines and 52% from hard rock deposits. Hard rock deposits have traditionally produced mineral concentrate (e.g., spodumene or petalite) with a wide variety of technical specifications that are used in a wide variety of industrial activities, often being converted to lithium carbonate or hydroxide as intermediate products through hydrometallurgical processes. Brines have traditionally produced a lithium carbonate product (of varying qualities) which may then be converted to a variety of lithium products for various commercial activities. Brines have traditionally been the lowest-cost producers of lithium carbonate, and its derivative products with hard rock deposits act as primary mineral supply or swing production for lithium carbonate and derivatives.


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Until recently, global lithium production was dominated by two deposits: Greenbushes in Australia (hard rock) and the Salar de Atacama in Chile (brine), which has two commercial operations on it. SRK estimates that close to 75% of global production was sourced from those two deposits. With lithium prices significantly increasing from 2015 to 2018, two closed mines (Quebec Lithium and Mt. Cattlin) were restarted (although Quebec Lithium recently closed again), one closed mine is in the process of restarting (Jiajika), five mines that produced other commodities either added lithium or restarted as lithium mines (Mibra, Wodgina, Bald Hill, Lanke, and Jintai, although Wodgina and Bald Hill have subsequently closed again), and five new mines have come online (Salar de Olaroz, Mt. Marion, Pilgangoora, Altura, and Yiliping). At the same time, the existing operations, including Greenbushes and Atacama, have expanded, but nonetheless, this major increase in supply has reduced the dominance of Greenbushes and Salar de Atacama, which, when combined, SRK estimates will produce approximately 50% of global lithium in 2020.

Note that while all of these projects are well-advanced, with most already being financed and construction underway, if lithium prices stay at current levels, projects in the financing phase may not receive development capital (although SRK has already eliminated those projects it believes will be the most difficult to finance), and some of the higher cost producers may not expand as predicted. Nonetheless, given the demand outlook discussed above, SRK believes it is likely these projects will be incentivized to reach these production levels. Some of this production increase is likely to happen even at current prices (e.g., Salar de Atacama expansions), although other increases will likely only occur if prices increase from current levels. In short, SRK has already discounted ramp-up timing and performance for expected delays and inability to meet targets and has tied project production rates to expected demand growth, but there nonetheless remains uncertainty in the forecast.

Beyond 2024, the supply pipeline still has remaining development capacity as well. The 2024 forecast of 780,000 tonnes LCE assumes several of the advanced projects are either not producing or not producing at full capacity. In addition, there are further moderate to high quality brine projects that are not included given their long timelines to development. Finally, existing large producers have announced further expansions that are currently on hold and not included.


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16.1.4Pricing Forecast

As discussed above, while lithium demand has been increasing (driven by recent historically elevated prices and leading the BEV demand boom), the lithium market is currently in an oversupply situation. In fact, SRK believes this market surplus has been in place since at least 2016. With significant additional production coming online from 2020 through 2030 (projects currently under construction or under financing), demand will have to accelerate its rate of growth to keep up with potential supply.

The historical commodity pricing for lithium carbonate and lithium hydroxide is provided in Figure 16-2.

Source: S&P Global Market Intelligence, 2022

Figure 16‑2: Historic Lithium Prices (Lithium Carbonate/Hydroxide)

Figure 16‑3 presents a comparison of SRK’s three demand scenarios against its base-case supply growth forecast


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Source: SRK, 2020

Figure 16-3: Supply/Demand Scenarios (2016 to 2023)

Although there is a near-term market oversupply of lithium, in the long-term, even with aggressive supply growth to date, significant new supply will need to be incentivized to fulfill demand requirements for the base-case demand projection. Therefore, in SRK’s opinion, the lithium price will need to exceed the production cost for new projects and provide an adequate rate of return on investment to justify development. Overall, SRK believes essentially all lithium producers currently producing or in its supply growth forecast would be profitable at US$9,000/t LCE or less. However, additional projects not in this outlook are clearly needed to meet demand forecasts. Therefore, SRK forecasts a price of US$10,000/t for technical grade lithium carbonate (CIF terms) as its long-term price. This price should be adequate to incentivize all projects included in Figure 16-2 plus additional projects required to close the projected supply gap shown in 2023, 2024 and 2025 (many of the earlier stage projects are third to fourth quartile and therefore should be profitable at this pricing level). Due to typical price volatility, SRK expects in the short-term prices may spike well above or fall well below this level, but from an average pricing perspective, in SRK’s opinion, this forecast is reasonable.

16.2Product Sales

The Salar de Atacama is an operating lithium mine. The mine pumps a subsurface brine that is rich in elements targeted for commercial production (e.g., lithium and potassium) as well as other elements generally viewed as deleterious to production but some of which may have some commercial value (e.g., magnesium) to evaporation ponds on the surface of the salar. These evaporation ponds concentrate the brine utilizing solar energy. During the evaporation process, potassium chloride and other byproduct salts (e.g., bischofite) precipitates from the concentrated brine and is harvested on the salar where it is further processed prior to sale. Lithium chloride is concentrated to approximately 6% lithium at which point it is trucked to the La Negra processing facility, located near Antofagasta, Chile where it is further processed into lithium chemicals that include technical grade lithium carbonate and battery grade lithium


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carbonate. Historically, La Negra has also produced technical grade lithium chloride although it is not currently producing this product.

Specifications for each of these products is provided in Table 16-1 through Table 16-3.

Table 16-1: Technical Grade Lithium Carbonate Specifications


Chemical	Specification
Li2CO3	min.	99%
Cl	max.	0.015%
K	max.	0.001%
Na	max.	0.08%
Mg	max.	0.01%
SO4	max.	0.05%
Fe2O3	max.	0.003%
Ca	max.	0.016%
Loss at 550°C	max.	0.75%

Source: Albemarle 2017

Table 16-2: Technical Grade Lithium Chloride Specifications


Chemical	Specification
LiCl	min.	99.2%
Na	max.	0.35%
H2O (400°C)	max.	0.5%

Source: Albemarle 2017

Table 16-3: Battery Grade Lithium Carbonate Specifications


Chemical	Specification
Li2CO3	min.	99.80%
Cl	max.	0.015%
K	max.	0.001%
Na	max.	0.065%
Mg	max.	0.007%
SO4	max.	0.05%
Fe2O3	max.	0.001%
Ca	max.	0.016%
H2O (110°C)	max.	0.35%

Source: Albemarle 2017

Historic production rates for each of these products, with brine sourced from the Salar de Atacama, as processed at the La Negra facility are presented in Table 16-4.

Table 16-4: Historic La Negra Annual Production Rates (Metric Tonnes)


	2015	2016	2017	2018	2019	2020
Technical Grade Lithium Carbonate	10,945	10,581	9,822	8,628	5,658	6,829
Battery Grade Lithium Carbonate	13,323	16,573	20,324	27,998	32,874	35,256
Technical Grade Lithium Chloride	2,143	1,900	3,209	3,821	1,824	-

Note 2015-2019 data reflects actual production, 2020 production is an estimate

Source: Albemarle 2020


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Looking forward, Albemarle has recently significantly expanded its production facilities the salar and those at La Negra are in the final stages of construction to increase lithium production rates. The new production capacity for each lithium chemical is provided in Table 16-5. This expansion of process capacity is forecast for completion in 2021 and is forecast by SRK to ramp up over a three year period before reaching the expanded production capacity in 2024.

Table 16-5: Current and Forecast La Negra Production Capacity by Product


	Current Annual Capacity (Tonnes)	Forecast Annual Capacity (Post Completion of La Negra 3) (Tonnes)
Technical Grade Lithium Carbonate	5,925	6,000
Battery Grade Lithium Carbonate	38,576	78,000
Technical Grade Lithium Chloride	3,600	0

Source: Albemarle 2020

To simplify the analysis for the purposes of this reserve estimate, SRK has assumed that all lithium production from the combined Salar de Atacama/La Negra operation is sold as technical grade lithium carbonate. This is the lowest value product forecast for production and adds a layer of conservatism to the reserve estimate.

The three lithium products from the Salar de Atacama/La Negra operation are all marketable lithium chemicals that can be sold into the open market. However, Albemarle is an integrated chemical manufacturing company that operates multiple downstream lithium processing facilities. Therefore, a proportion of the production from the Salar de Atacama/La Negra operation is utilized to as source product for Albemarle’s downstream processing facilities. A breakdown of the volume of Salar de Atacama/La Negra product that is consumed internally for further downstream processing versus sales to third parties is presented in Table 16-6.

Table 16-6: Historic Salar de Atacama Product Consumption


	Production Consumed Internally (Tonnes LCE)	% Production Sold to Third Parties (Tonnes LCE)
Technical Grade Lithium Carbonate	870	6,031
Battery Grade Lithium Carbonate	0	33,154
Technical Grade Lithium Chloride	0	0

Source: Albemarle 2020

While a portion of the production may be consumed internally, for the purposes of this reserve estimate, SRK has assumed that 100% of the production from the Salar de Atacama/La Negra operation will be sold to third parties. Further, as noted above, although the Salar de Atacama/La Negra can and does produce higher value battery grade lithium carbonate, SRK’s assumption for the purpose of this reserve estimate is that all production will be sold as the lower value technical grade lithium carbonate. This simplifies the assumptions for the estimate and does not materially impact the magnitude of the reserve estimated herein as the reserve is contract constrained (see Section 16.3.1) and not economically constrained.


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16.3Contracts

As outlined above, the lithium chemicals produced from the Salar de Atacama/La Negra operations are either consumed internally for downstream value-add production or sold to third parties. These sales may be completed in spot transactions or the chemicals may be utilized to satisfy sales contracts for lithium chemicals held at the consolidated corporate Albemarle level or its affiliates. These contracts are not generally specific to sourcing product from the Salar de Atacama/La Negra, although product sourced from other operations would need to be certified to meet customer quality requirements. Therefore, these contracts are not included in this analysis of reserves at the Salar de Atacama, and this analysis instead assumes a typical market price.

Salar de Atacama/La Negra sell all lithium products to its foreign related party Albemarle US Inc., where their sales and marketing teams provide instructions about specified locations where Chile should deliver the products. Extraction and sales of lithium and other products are regulated by contracts agreed with the Chilean Nuclear Energy Commission (CCHEN) and the Chilean Economic Development Agency (CORFO). These contracts are summarized in Section 16.3.1.

SRK is not aware of any other material contracts for the Salar de Atacama / La Negra operation.

16.3.1CCHEN and CORFO Agreements

Decree Law No. 2,886, published on November 14, 1979 and effective January 1, 1979, reserved lithium extraction for the State of Chile. However, the concessions held by Albemarle, for the purposes of producing lithium from the Salar de Atacama were registered in 1977 and therefore are exempt from this law. Nonetheless, under Law No 16,319, establishing the CCHEN, lithium can only be mined by CCHEN or with prior authorization from CCHEN. Under this law, producers of lithium are subject to a production quota that caps total production from the concessions and Albemarle is subject to such a CCHEN production quota. CCHEN also limits the extraction rate of brine from the Salar de Atacama.

In 2016, CCHEN increased the allocated pumping rate for Albemarle at the Salar de Atacama from the prior 142 liters/second (l/s) to 442 l/s. As part of the same agreement, the CCHEN production quota was increased from 200,000 t lithium (as lithium metal), inclusive of historic production to 540,240 t lithium (as lithium metal), again inclusive of historic production.

Further, CORFO was the original owner of the concessions in the Salar de Atacama from which Albemarle’s resources and reserves are derived. A predecessor of Albemarle (Foote Mineral Company) entered into an agreement with CORFO in August 1980 to establish production of lithium and other products from these concessions. From this original contract, Albemarle was limited to a total production quota of 200,000 t of lithium (as lithium metal), without an expiry date, and was not required to pay royalties on lithium production. A 1987 agreement with CORFO establishing production of potassium byproduct salts includes a royalty on the production of this product equal to 3% of the sales price for potassium products. The 1980 agreement for lithium extraction was subsequently amended in 2016 to allow for an increase in the production quota of lithium from these concessions. This amendment increased the company's authorized lithium production quota by an additional 262,132 tonnes of lithium


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(as lithium metal). With approximately 78,038 t remaining from the original quota (as of August 31, 2021), this additional quota results in a total remaining production quota of 340,170 t lithium as lithium metal (1.81 Mt LCE). As the CORFO quota has less allowable lithium production than the CCHEN sales quota, SRK has used the CORFO quota numbers as the limiting factor on this reserve estimate.

As part of the 2016 amendment to the CORFO agreement, Albemarle agreed to additional conditions around its production of lithium, including the following:

•A quota expiry of January 1, 2044 (i.e., any quota not utilized by this date will be forfeited).

•Albemarle agreed to invest in a third lithium carbonate plant in Chile with production capacity of at least 20,000-24,000 t battery grade LCE per year no later than December 31, 2022. If this new battery grade production facility is not in production by December 31, 2022, the new quota will be reduced from 262,132 t to 43,132 t LME. In addition, the quota will expire on December 31, 2035 (i.e., any quota not utilized by this date will be forfeited). Albemarle currently forecasts completion of the new battery grade production facility around mid-year 2021 (i.e., it is expected to meet this deadline).

•Provides for an additional quota of 34,776 t (as lithium metal) to feed a lithium hydroxide plant with production capacity of at least 5,000 metric tons/year should Albemarle construct a lithium hydroxide plant in Chile. Note SRK has not assumed the development of a lithium hydroxide plant and therefore has not included this quota in its analysis.

•Establishes royalties or commissions paid to CORFO on every tonne of product sold from the Salar de Atacama/La Negra according to the schedule presented in Table 16-7.

•Commencing on January 1, 2017 and continuing for approximately five years (until 31,559 t LME are produced), Albemarle will pay a commission on the production still remaining under the original quota, Thereafter, Albemarle will no longer pay any commissions on the lithium produced at the original 24,000 Mt carbonate plant, allowing Albemarle to produce the then-remaining metric tons of the original quota on a commission-free basis as per the terms of the original agreement with CORFO.

•If Chile develops a local downstream industry that requires battery grade lithium salts, Albemarle agrees to allocate a portion of its production (up to 25%) of those salts for sale to those local downstream producers at a discounted price (relative to Albemarle's export sales price). To date, development of downstream industry has not occurred, and Albemarle is therefore not selling any production at this discounted rate. SRK has not assumed any future discounted sales associated with this clause in this TRS as it is not aware of any planned or established downstream development.

•Albemarle will annually pay into a fund that will be used to develop R&D to benefit the Atacama, the country of Chile, and local industry. This payment is a fixed amount, inflated each year through the expiry of the quota at the end of 2043.

•Albemarle makes certain commitments to the local communities in the Atacama to use in local development projects equal to 3.5% of sales from Chilean production.

•Prohibits the sale of products with low value-add (e.g., raw brine, concentrated brine and/or refined brine in any degree of concentration).

•Royalty rates on potassium chloride will follow a sliding scale ranging from 3 to 20% of the sales price.

•Royalty rates on magnesium chloride, bischofite, carnalites, silvenites and halites is set at 10% of sales.


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Table 16-7: Updated CORFO Royalty/Commission Rates


Lithium Carbonate		Lithium Hydroxide
Price Range (USD/ton)	Progressive Commission Rate (%)	Price Range (USD/ton)	Progressive Commission Rate (%)
0-4,000	6.8%	0-4,000	6.8%
4,000-5,000	8%	4,000-5,000	8%
5,000-6,000	10%	5,000-6,000	10%
6,000-7,000	17%	6,000-9,000	17%
7,000-10,000	25%	9,000-11,000	25%
Over 10,000	40%	Over 11,000	40%

Source: Albemarle 2017

The royalty/commission rate agreed with CORFO on Albemarle’s lithium production (lithium carbonate and other salts, excluding lithium chloride sales) from the combined Salar de Atacama/La Negra operation is calculated on the weighted average of third party sales (i.e., royalty is calculated based on end-customer price). For the purposes of this reserve estimate, SRK has utilized the US$10,000/t price for technical grade lithium carbonate forecast in Section 16.1.4 and applied the above royalty formula, which results in a product pricing forecast as outlined in Table 16-8 (a calculation at US$8,000/t is also shown for reference). Note that while the combined Salar de Atacama/La Negra operation will have the capacity to produce approximately 44,000 t of battery grade lithium carbonate (for LN1 and LN2 – 84,000 t considering LN3), for the purpose of simplifying the reserve modelling, SRK has assumed all production is technical grade product. Given Albemarle’s production and therefore reserve is limited by its production quota and not economic factors, in SRK’s opinion, this simplification will not impact it estimation of reserves for the operation.

Table 16-8: Product Pricing Forecast


		Example Weighted Average Third Party Sales Prices (US$/Metric Ton LCE)
		Example 1	Example 2
		$8,000	$10,000
Weighted Average Third Party Sales Price (US$/Metric Ton LCE)	Progressive Commission Rate (%)	Incremental Commission Paid (US$/Metric Ton LCE
0-4,000	6.8	272	272
4,001-5,000	8.0	80	80
5,001-6,000	10.0	100	100
6,001-7,000	17.0	170	170
7,001-10,000	25.0	250	750
>10,000	40.0	-	-
Example Total Commission: Example Effective Rate		$872 10.9%	$1,372 13.7%

Source: SRK 2021


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17Environmental Studies, Permitting, Social Factors

The following discusses reasonably available information on environmental, permitting and social or community factors related to the Salar de Atacama and La Negra operations. Where appropriate, recommendations for additional investigation(s), management actions, or expansion of existing baseline data collection programs are provided.

The section was developed through a desktop review, including information provided by Albemarle, and meetings with relevant Albemarle environmental staff. A site visit could not be conducted due to COVID-19 restrictions.

17.1Environmental Studies

Baseline studies, in both operational areas, have been developed since the first environmental studies for permitting were submitted; 1998 in La Negra, and 2000 at Salar de Atacama. The latest environmental baseline studies at La Negra were for the project "Modification Project La Negra Plant Expansion Phase 3" in 2018, and the latest studies for Salar de Atacama were for the project "La Negra Plant Expansion Phase 3" in 2016. With the ongoing monitoring programs in both locations, environmental studies, such as hydrogeology and biodiversity, are regularly updated.

The following is a summary of the environmental studies/conditions at both operational locations to date, including the latest monitoring information.

17.1.1General Background

La Negra is located in a normal desert climate, characterized by low relative humidity and large variability in daily temperatures. Average annual rainfall is less than 5 mm, and maximum daily rainfall is 48 mm on a return period of 100 years. Although precipitation is scarce, storm events of considerable magnitude can occur.

There are no perennial streams or drainages in the area of La Negra. However, some intermittent or ephemeral drainages occur in the northern area where the process facilities are located. These ephemeral drainages typically only flow following extreme precipitation events.

Salar de Atacama is located in a Marginal High Desert climate. The rainfall regime corresponds to summer rains, and also cyclonic origin rains, although both cases are rare events. Due to the altitude, temperatures are generally colder, with nominal annual temperature fluctuations, but larger daily low and high temperature ranges. Relative humidity is very low.

Average rainfall in Salar de Atacama is around 13 mm, with a maximum daily rainfall of 45 mm on the 100-year events. The Albemarle facilities are located entirely inside the Salar de Atacama, with few to no discernable surface water drainages, as rainwater quickly infiltrates the highly permeability flat saline crust.

Vegetation and wildlife are scare at La Negra. It is located within an industrial area which is in saturation conditions for the daily and annual standard of inhalable particulate matter (PM10). Although there are no surface water courses, there is an aquifer that could be affected by potential infiltrations from the plant facilities. As such, a water quality monitoring program is in place. Air quality, hydrogeology, and water quality have been deemed as key environmental characteristics of the La Negra area, and are carried forward for additional discussion below.


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No cultural inventories of relevance have been registered within the areas of disturbance for either La Negra or Salar de Atacama.

17.1.2La Negra

Air Quality

As the La Negra plant is located in an industrial area, there are several sources of air pollutant emissions. As noted above, the general area is in saturation conditions for PM10 in relation with the Chilean primary daily and annual standard.

For the projects that have been submitted for environmental evaluation at La Negra, the concentrations of inhalable (PM10) and fine particulate matter (PM2.5), and combustion gases (COx, NOx, and SOx) have been modeled, and the conclusions indicate that emissions from the La Negra Plant are not significant in relation to the other activities of the industrial area. Emissions from the La Negra Plant are related to vehicle traffic and emissions from fixed sources associated with the plant's processes.

Air quality is monitored at the existing Coviefi, La Negra and Inacesa stations.

Hydrogeology and Water Quality

The La Negra area contains four major hydrogeological units that are composed of alluvial and fluvial deposits of varying ages, and that represent different types of aquifers. In the upper level, the aquifer is of the semi-confined type and thick lithologies predominate in it with alternating levels of silts, clays and saline layers. In the underlying unit, fines predominate in relation to the other units. In the base, the unit of Old Gravel presents a high hydraulic conductivity since it is formed mainly by gravelly sands and sandy gravels, and whose confinement is given by the content of fines and the thickness of the superjacent unit in the sector. A lower sedimentary unit, corresponding to the Caleta Coloso Formation and with aquitard characteristics, outcrops mainly to the west of the fault zone, and is not represented in the profiles. The aquifer system overlies a more impermeable unit constituted by slightly fractured rocks of igneous origin belonging to La Negra Formation and Palaeozoic granitic rocks.

As a commitment of the environmental approval resolutions, monthly monitoring of an extensive list of physical and chemical parameters was developed, along with piezometric levels in two wells. (Figure 17-1) The monitoring points are:

•La Negra well: which corresponds to a groundwater exploitation well located at the La Negra Plant, in compliance with the resolution of water extraction, RE N°354/1989 of the General Water Directorate (DGA).

•Inacesa monitoring well: which is located in the plant of the same name of the cement company of the same name. It is a large diameter and shallow well. This well is in intermittent operation.


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•Carrizo: which corresponds to a surface water sampling location at the confluence of the Carrizo spring with the La Negra creek.

Source: Albemarle (2020). Informe de Seguimiento Ambiental. Monitoreo Mensual de Agua Subterránea y Superficial. Sector La Negra – Enero 2020. (Environmental Monitoring Report. Monthly Ground Water Monitoring La Negra Area – January 2020)

Figure 17-1: La Negra Water Quality Monitoring Points

The last two monitoring reports (January and February 2020) for these locations were reviewed for this assessment; no anomalies or exceedances of Chilean regulations where identified. Notwithstanding this, and according to information provided by Albemarle and historical information, some high concentrations of some parameters have been detected in the past, mainly in the Carrizo stream, where the groundwater and soil have high concentrations of several parameters (namely, arsenic, boron, lithium salts), but it is not known whether their origin is related to the Albemarle operations, third parties’ discharges, or natural sources. Specific studies of ecological risk and of risk to human health are being carried out, and a land survey has been scheduled, the results of which are expected to be available by the end of 2020, and through which an action plan will likely be defined.


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17.1.3Salar de Atacama

Hydrology - Hydrogeology

The Salar de Atacama is located in an endorheic basin with elevations ranging between 2,300 mamsl and 6,200 mamsl, covering an area of approximately 17,300 km2.

The area of lowest elevation in the basin corresponds to the salt flats (2,300 masl), which has an area of approximately 1,600 km2. Around the core, there are wetlands and lagoons that cover an area of approximately 1,100 km2. This area is known as the Marginal Zone. The lagoons are fed by limited surface runoff that reaches them through ephemeral surface drainages and groundwater springs.

The Salar de Atacama basin, and in the area surrounding the Albemarle facilities, there are areas of high sensitivity and ecological value. These are the lagoons located in the Salar's Marginal Zone. These lagoon systems mainly depend on the water contributions mostly coming from the aquifers, which in turn are recharged by the rainfall in the upper part of the basin. These sensitive areas include:

•La Punta-La Brava Lagoon System

•Peine Lagoon System

•Quelana Lagoon System

•Soncor Lagoon System

The brine of the Salar de Atacama core is currently being exploited by two mining companies: SQM (1,700 L/s) and Albemarle (442 L/s). This exploitation lowers brine water levels, which are measured in several monitoring locations. As expected, the drawdowns are greatest in those areas closest to the extraction wells, reaching several meters in some cases, and decreasing as the monitoring points move away.

Freshwater in the basin is also exploited. The largest exploitations are linked to mining activity by companies like Minera Escondida and Zaldívar, in the Negrillar and Monturaqui aquifers, in the south of the basin, and SQM along the eastern edge. Albemarle's freshwater rights represent less than one percent of the water rights granted in the basin.

Because of the sensitivity of these hydrologic systems, the environmental analysis of the La Negra Phase 3 Project required the development of a conceptual and numerical hydrogeological model (SGA, 2015) to evaluate both the direct effects of the project's brine extraction as well as the cumulative effects with other operations in the area. The results of the modeling effort concluded that the La Negra Phase 3 Project would not have significant effects on the sensitive areas, even under a non-favorable scenario of reduced recharge over the next 25 years.

In general, monitoring data of freshwater aquifer levels indicate that the levels in the system remain within their historical values allowing for the seasonal fluctuations typical of the Marginal Zone, due to the seasonal variation of the evaporation rate. Albemarle’s reports indicate that, in some areas, the above mentioned larger exploitations of freshwater have produced some reductions in water levels in the vicinity of the Soncor and Aguas de Quelana systems, and upstream of the La Punta-La Brava lagoon system, though without significant effects on the lagoon systems or protected ecosystems being observed so far.


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Considering that the last hydrogeological model available for review that assessed impact to water levels, was conducted in 2019, SRK recommends that this assessment be updated as needed based on monitoring information available to date.

It is important to note that the water authority is seeking to generate an integrated hydrogeological model of the entire basin, which will be fed by the monitoring information collected by all of the companies in the area, and which will allow a comprehensive follow-up of the effects of brine and freshwater extractions on water levels in ecologically sensitive areas.

Biodiversity

Lagoons, wetlands, and saltwater ecosystems have developed in the lower part of the Salar de Atacama basin, particularly on the margins of the Salar. These ecosystems contain a high degree of biological diversity in relation to their surroundings. These systems are made up of interconnected lagoons that possess unique characteristics and properties.

The systems of La Punta-La Brava and Peine in the south, and Aguas de Quelana and Soncor in the east (lagoon systems Soncor, Aguas de Quelana, Peine, La Punta and La Brava) constitute singular areas, given their importance in reproductive terms, their richness and proportion of species with conservation challenges, since inside these areas there occur species whose requirements of habitat are restricted, presenting a high sensitivity to changes in the environment.

Currently, this area has three types of protection, focused on preserving different components of each system. The first is focused on the protection of flamingos and includes the Soncor and Aguas de Quelana lagoon systems. It is established as the Los Flamencos National Reserve managed by the National Forestry Corporation (CONAF), created in 1990. The second is the site protected by the Convention on Wetlands (RAMSAR), which corresponds to the area of Soncor, which was incorporated in 1996, mainly because it is a nesting area for flamingos and migratory species. And finally, the third is Resolution No. 529 of the DGA of the Antofagasta region, which protects 17 wetlands within the Salar de Atacama.

In the Salar de Atacama, surfaces have been identified as having ecological elements and/or attributes, which could be negatively affected by any threat. These include:

•Presence of biological species in conservation category

•Presence of species with local and/or regional endemism

•Unique components

•Breeding areas of endangered species

Figure 17-2 shows the ecologically important areas, according to these criteria. All of the areas associated with the lagoon systems and wetlands of the Salar de Atacama are highly vulnerable, as they represent a significant number of sensitive and endemic species, with the presence of breeding areas for threatened species and the presence of sensitive elements, such as the wetlands.


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Source: Centro de Ecología Aplicada (2015). Plan de Manejo Biotico. Prepared for Rockwood Lithium. December 2015. (Biodiversity Management Plan)

Figure 17-2: Sensitive Ecosystems in Salar de Atacama


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The ecosystems and organisms found in the various wetlands are dependent on the contribution of groundwater that was structured in the Salar de Atacama basin. Therefore, any extraction that generates significant fluctuations in that water supply, particularly in the freshwater-salt aquifer, has the potential to impact these ecosystems and overall biodiversity.

From the point of view of species in conservation status, the mentioned systems present a high degree of sensitivity due to the presence of threatened species (according to the regulations for the classification of wild species Supreme Decree Nº 29/2011 from the Environment Ministry). Such is the case of the aquatic snail Heleobia atacamensis (Critically Endangered), the Yanez's tree iguana and Fabian's lizard Liolaemus fabiani (Endangered), the camelid Vicugna (Endangered), and eight species in the Vulnerable category (Lama guanicoe, Ctenomys fulvus, Vultur gryphus, Rhea pennata tarapacensis, Phoenicoparrus andinus, Phoenicopterus chilensis, Phoenicopterus jamesi and Chroicocephalus serranus).

Albemarle has developed a functional ecological model of the area, from which it has defined a biological environmental monitoring plan.

In the monitoring report available for review (winter 2018 to summer 2019), the state of the ecosystem is evaluated in the period 2016 to 2019). The results indicate that, in general terms, there is a maintenance of the current ecological state, without variations that constitute significant changes, which could be framed in the cycles of historical variation of the Salar ecosystem.

In addition to the biological monitoring plan, a Water Monitoring Plan and an Early Warning Plan have also been implemented. The details of these plans are discussed in the environmental monitoring section.

Social Issues and Communities

Salar de Atacama is located in the Antofagasta Region, municipality of San Pedro de Atacama, south-east of the city of Calama. Albemarle facilities at Salar de Atacama are located within an Indigenous Development Area (ADI) called “Atacama La Grande”, which has a population belonging to the Atacameña ethnic group.

The economy of the indigenous population is mainly based on primary and secondary economic activities. Cattle raising and agriculture, linked to the ancestral uses and customs of the Atacameña ethnic group, tourism and handicrafts.

In the municipality of San Pedro de Atacama, the most representative organizations are the indigenous organizations, which have been articulated around the ancestral ayllus of the Atacama ethnicity. There are 16 indigenous communities with legal status in San Pedro de Atacama.

Another category of indigenous associativity is that of indigenous associations or groups, which bring together different individuals or communities, from different territories, to develop areas of common interest. There are a total of 18 indigenous associations or groups in the San Pedro de Atacama municipality.

In general, and according to official surveys, the communities and people who live in the villages, identified as Atacameños, are below the poverty level or slightly above it. However, when making a detailed analysis of the situation in each locality, there is an important impact


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on the local economy produced by tourism (which provides direct resources in the villages), and above all, by the mining activity, where the inhabitants of Toconao, Socaire and Peine (mainly) work as employees.

The town of Peine is located 27 km from the Albemarle facilities and 108 km from the town of San Pedro de Atacama, at the southern end of the Salar de Atacama. Peine is a town that works as a residential site and as an agricultural productive area.

The Salar de Atacama area is also a relevant sector for tourism and is part of the Zone of Tourist Interest (ZOIT) San Pedro de Atacama Area - El Tatio Geothermal Basin.

Albemarle maintains agreements and relationships with all communities and groups in its area of influence.

Considering the presence of indigenous communities in the area, the development projects, that are submitted into the environmental impact assessment system, may require the development of an Indigenous Consultation Process according to the Chilean legislation.

17.1.4Known Environmental Issues

One foreseen potential risk is that the Early Alert Plan (PAT) could be activated because of the exceeding of any established threshold, which could imply reducing the amount of brine to be extracted.

17.2Environmental Management Planning

The environmental management of the operations in La Negra and Salar de Atacama are developed according to their environmental commitments that have emerged from the projects evaluated and approved by the environmental authority (SEA) and supervised by the Environmental Superintendence (SMA).

Chilean environmental legislation does not consider additional environmental management plans, with the exception of Hazardous Waste Management Plans, required by the Health authority for operations that annually generate more than 12 t of hazardous industrial waste.

According to each operation, and their environmental commitments, the following are the management plans for La Negra and Salar de Atacama facilities:

•La Negra:

◦Water Quality Monitoring Plan

◦Emergency and Contingency Prevention Plan

◦Hazardous Waste Management Plan

•Salar:

◦Biodiversity Monitoring Plan


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◦Environmental Water Monitoring Plan

◦Early Warning Plan

◦Emergency and Contingency Prevention Plan

◦Hazardous Waste Management Plan

The main environmental management issues for the La Negra and Salar de Atacama facilities are summarized below.

17.2.1Tailing Disposal

Although Albemarle's operation does not have tailings, per se, it does generate liquid waste at La Negra, which is managed as follows.

The process at the La Negra Plant up to Phase 2, collects solid/liquid waste together (in a wet state) in the existing system of evaporation and sedimentation ponds. Phase 3 considers a waste disposal system that includes the segregation of liquid and solid waste. The solid waste will be stored as low moisture solids (collection sites) and the liquid waste will be treated as recovery waste to be recycled to the plant using the La Negra Evaporation and Sedimentation Ponds system.

The Lithium Carbonate Plant generates liquid waste, mainly from the SX process. The operation considers technology to reuse the mother liquor and thus optimize the use of process water and in turn recover lithium. The water generated in the different stages of the process, including the solutions coming from the cleaning of equipment (HCL or H2SO4), will be taken to the thermal evaporator and then returned to the process for reuse.

The mother liquor is sent to the thermal evaporation plant or to the solar evaporation system. From the thermal system, a high purity water stream (condensate) is recovered for recycling into the process. The by-products of the thermal evaporation plant are NaCl (salt) and a weak LiCl brine stream that is recycled to the process. In the solar evaporation system, the water is evaporated by solar radiation and the by-product salt is precipitated and accumulated in ponds.

The process of brine concentration by means of solar evaporation ponds generates the precipitation of waste salts that are extracted from the ponds and are currently accumulated in stockpiles. (See waste discussion)

The evaporation/sedimentation ponds are lined with low-permeability PVC geomembrane.

The operation at La Negra has a system of wells to monitor infiltration. In the event that infiltration is detected, either due to an increase in the piezometric level or changes in the chemical quality of the water attributable to such infiltration, these are captured by the wells, and the relevant studies will be carried out. At the same time, the possible point of infiltration from the pond will be detected in order to proceed with its repairs (as needed).

According to information provided by Albemarle, the plant's water balance was recently updated, and the results indicated that the current and approved facilities may not be enough to handle the future process' liquid waste solutions. As such, a work plan has been defined to provide a solution to this issue in the long term, along with defining and implementing measures in the short term to manage the liquid waste until a final solution is identified and developed. Albemarle is progressing these plans and SRK sees this as a low risk.


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17.2.2Waste Management

La Negra

Process Reagents

Processing reagents used at La Negra include hydrochloric acid (HCl), sulfuric acid (H2SO4), an extractant, sodium hydroxide (NaOH), a solvent, soda ash, and lime. All of these are stored in warehouses authorized by the Chilean Health Service and comply with the conditions established in the legislation applicable to hazardous substances, when applicable.

Fuels

Fuel is not stored at La Negra. Rather, it is brought from the Salar de Atacama facilities and other authorized suppliers. The fuel is transported in trucks certified by the Superintendence of Electricity and Fuel.

Disposal of Non-Hazardous and Hazardous Waste

Domestic solid waste is temporarily stored of at a site authorized by the Health Service and transferred for final disposal outside the facilities to an authorized landfill in the region. Non-hazardous waste is segregated at its source and disposed of in a yard (salvage yard) authorized by the Health Service. From here, it is disposed of in authorized locations or reused. Hazardous industrial waste, which includes mainly vehicle batteries, oil filters, rags contaminated with grease and oil, waste oils, paints, contaminated personal protective equipment (PPE), among others, are temporarily disposed of in a warehouse authorized by the Health Service, and then transported to authorized off-site disposal sites.

Residual Salts

The process of brine concentration by means of solar evaporation ponds generates the precipitation of waste salts that are excavated from the pools and accumulated in stockpiles. (See tailings section)

The process generates three types of solid salt wastes:

•Ca and Mg carbonates and hydroxides from the brine purification stage

•Ca/Na borates from the boron precipitation (removal) process

•NaCl from the thermal evaporation system

Stockpiles of these materials are located to the north and south of the plant. The solids are separated and placed in stockpiles; specifically, the sodium chloride is separated from the rest of the solids.

The solid waste has a typical moisture content of less than 30%, which allows it to be stored in collection sites with an average height of 6 m above ground level and an area of approximately 5 to 30 ha each.

The salt stockpiles are constructed on a 0.75 mm-thick PVC geomembrane with chemical resistance and resistance to ultra-violet radiation. In addition, they have a 200 gr/m2 geotextile layer in order to prevent the geomembrane from breaking.


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Salar de Atacama

Process Reagents

The chemical reagents used at Salar de Atacama include: HCl, methyl iso-butyl carbonyl (foaming agent), Crisamine (collector) and Cricell (depressant). These are stored in warehouses authorized by the Health Service, and which comply with the conditions established in the legislation applicable to hazardous substances, when applicable.

Fuels

Salar de Atacama maintains a plant fuel supply, operated by an authorized outside company, which consists of a tank, which complies with the regulations for the storage of liquid fuels for self-consumption (Supreme Decree Nº 379/86 of the Ministry of Economy) and is authorized by the Superintendence of Fuels.

Disposal of Non-Hazardous and Hazardous Waste

Domestic solid waste is temporarily stored onsite at a location authorized by the Health Service and later transferred offsite to an authorized landfill in the region for final disposal. Non-hazardous waste is segregated at its source and disposed of in a yard (salvage yard) authorized by the Health Service, from here, it is disposed of in authorized locations or reused. Hazardous industrial waste, consisting of mainly vehicle batteries, oil filters, rags contaminated with grease and oil, used oils, paints, contaminated PPE, among others, are temporarily stored in a warehouse authorized by the Health Service, and then transported to authorized final disposal sites.

Residual Salts

At Salar de Atacama, brine is extracted from wells, and the brine concentration process is through solar evaporation ponds, where the precipitation of waste salts is generated, these waste salts are excavated from the ponds and deposited in stockpiles. As the lithium chloride solution is concentrated, different salts precipitate in each pond, among which include halite, bischofite, carnallite and sylvite. The latter is entered into the Potash Plant to produce KCL and carnallite. Once the brine is concentrated at 6% Li, the brine is sent to La Negra Plant.

17.2.3Water Management

La Negra

The industrial water used in the operation comes from water acquired from third parties and, to a lesser extent, from an existing well at the facilities with water rights for up to 6 L/s.

At La Negra, the brine from Salar de Atacama is purified for the extraction of lithium. All solutions are evaporated and/or recirculated to the process. As indicated in the waste section, the updated process water balance indicates that the current facilities are not sufficient to handle the residual solutions, and a long-term solution needs to be identified.

Stormwater runoff, though infrequent, is managed through a series of diversion channels around the plant, ponds, and stockpiles areas.


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Salar de Atacama

The freshwater used in the process at Salar de Atacama is extracted from wells in Tilopozo, Tucucaro, and Peine, with a total water right granted by the DGA of 23.5 L/s. Currently, 16.9 L/s are being consumed in the process.

Albemarle exploits brine from the core of the Salar de Atacama by means of extraction wells, with an authorized exploitation extraction rate of 442 L/s.

As noted above, the extraction of brine and freshwater by Albemarle and other companies in the basin, has the potential to cause groundwater levels to drop which could impact lagoon and wetland systems of high ecological value. Albemarle has an Environmental Water Monitoring Plan (EWMP), a Biodiversity Monitoring Plan, and an Early Warning Plan, oriented to follow up on critical variables, and prevent unexpected effects on these systems that are being monitored. These plans are described in the monitoring section.

17.2.4Monitoring

La Negra

The monitoring at La Negra is related with the commitments from the main environmental approvals (RCA Nº46/1999 and RCA Nº 278/17). There is an eight point monitoring program, seven for underground water and one for surface water. For RCA Nº46/1999, monitoring points are La Negra well, Well Nº4 of INACESA, and a spring in Carrizo drainage. For RCA Nº278/17, 5 new wells were added to the monitoring program, with the objective of monitoring eventual infiltrations from the ponds. The parameters measured at these monitoring points are presented in Table 17-1.

Table 17-1: La Negra Water Monitoring Parameters


Parameters	Number of Monitoring Points	Frequency
In-Situ Parameters
Water Level
pH (s.u.) Electrical Conductivity (EC) Temperature (*)
In Laboratory:
pH () EC Total Dissolved Solids (TDS) Density () Total alkalinity () (reported expressed as CO3) Cl dissolved SO4 dissolved () HCO3 dissolved NO3 dissolved Ca total () and dissolved Na total () and dissolved Mg total () and dissolved K total () and dissolved Li total () B total () Strontium (Sr) total Iron (Fe) total Iron (III) (*) (expressed as Fe2O3)	8 (*)	Monthly

(*) Parameters measured for the sample points associated to RCA 46/1999.

Source: Albemarle (2020): Respuestas para auditoría interna realizada por SRK Consulting.


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Salar de Atacama

Environmental Water Monitoring Plan

At Salar de Atacama, an EWMP has been implemented which includes meteorological, hydrological, and hydrogeological data from both the Salar de Atacama core and its eastern and southern edges, and the Marginal Zone, where the Soncor, Aguas de Quelana, Peine and La Punta-La Brava lagoon systems are located. These data are used to update the numerical model developed to evaluate the behavior and cumulative effects of the different brine and freshwater extraction projects that coexist in Salar de Atacama area.

Monitoring is carried out in four sectors, determined according to their hydrological and hydrogeological characteristics:

•La Punta-La Brava áreas

•Peine area

•North and east side of Salar de Atacama

•Salar de Atacama core area

A summary of the environmental variables and parameters are presented in Table 17-2.

Table 17-2: Salar de Atacama Environmental Monitoring Points

Environment Component

Environment Variable

Parameters

Number of Measurements

Frequency

Climate and Meteorology

Meteorological

Variables

Daily precipitation [mm], Atmospheric temperature [ºC], Evaporation [mm],

Atmospheric pressure [mbar]

Diary (Continuous)

Hydrology

Surface covered by lagoons

Area in [m2] of lagoon systems

Biannual

Limnimetric Level of the Lagoons

Water level [meters amsl]

Monthly

Surface flow rate

Flow rate [L/s]

Quarterly

Hydrogeology

Evapotranspiration

Evaporation rate [mm/day]

Quarterly

Phreatic levels in brine and freshwater

Depth Level [meters amsl]

124

Monthly

Saline Interface Position

Electrical Conductivity [µS/cm] v/s Depth [meters amsl]

Quarterly

Brine and Freshwater Pumped Flow

Brine flow rate [L/s]

Monthly

Industrial water flow rate [L/s]

Monthly

Water Quality

Chemical quality of surface and groundwater

Physical parameters in situ: pH, EC, temperature, TDS and Dissolved Oxygen (DO).

Laboratory physical-chemical parameters: pH, EC, TDS and density.

Major elements: Cl, SO4, HCO3, NO3, Ca, Mg, Na, and K.

Minor elements and dissolved traces: Al, As, B, Fe, Li, Si, Sr.

Quarterly

Source: Albemarle (2020): Answers for internal audit by SRK Consulting


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The results database of the water environmental monitoring plan is submitted to the SMA on a quarterly basis, and a consolidated report is delivered annually. In addition, data on brine and freshwater extraction rates are reported online.

Early Warning Plan

The operation has an Early Warning Plan (PAT) whose objective is to timely detect any deviation from baseline conditions. The plan includes status indicators and activation levels or thresholds at specific points, from which measures are activated to mitigate potential impacts.

The PAT is focused on the prevention and control drops in groundwater levels in the Salar de Atacama Core (brine levels) in points located in front of the Peine and La Punta-La Brava lagoon systems, as well as in the areas that feed these systems, located in the Marginal Zone. The plan also considers the adoption of preventive measures in relation to the activation of some of the Phases foreseen by SQM's PAT in the brine level control points in the core in front of the Soncor and Aguas de Quelana systems, where the cumulative effects of the different existing extractions have to be evaluated, if a threshold is exceeded. For this purpose, a specific tool to verify the cumulative effect has been defined in order to validate the overlapping effects on the levels of the basin, considering the extraction of all the operators in the basin.

The execution of the EWMP, together with the actions or preventive measures included in the PAT and the activation of the cumulative effect tool, are used to monitor and mitigate any groundwater level issues in the Salar de Atacama basin and, more importantly, any effect beyond that which has already been predicted through hydrogeological modeling strictly and decisively.

Biodiversity Environmental Monitoring Plan

The Biodiversity Environmental Monitoring Plan (PMB) aims at early detection of any changes in the ecological status in the area of influence of the operation as a result of local, regional and/or global phenomena. The PMB includes monitoring in the following areas:

•La Punta and La Brava System, including La Punta and La Brava lagoons

•Peine System, including Salada, Saladita and Interna lagoons

•Tilopozo System, formed by the Tilopozo wetlands

•The plan also includes two areas located in the north and east zone of the Salar de Atacama for which lagoon surface areas and flora are monitored:

◦Soncor system, including Barros Negros and Chaxa lagoons

◦Quelana and Aguas de Quelana (both located in the Los Flamencos National Reserve)

Table 17-3 summarizes the parameters and frequency for each of the monitoring points in the PMB.


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Table 17-3: Salar de Atacama Biodiversity Monitoring Plan

Component

Sub-component

Frequency

General variables

Number of Points

Biota

Terrestrial Flora

Biannual

Species composition and coverage

Terrestrial Vegetation

Biannual/ Annual

Distribution and coverage of azonal vegetation

Wildlife

Biannual

Composition, Richness and Abundance

Aquatic flora and fauna

Biannual

Composition, Richness and Abundance

Microbial Mats

Biannual

Characterization/Presence of evaporites and microbialites

Soil

Substrate

Biannual

Physics and Chemistry

Sediment

Biannual

Physics and Chemistry

Water

Water Quality

Biannual

Physics and Chemistry

Lagoons

Biannual

Phreatic level lagoons

Lagoons

Biannual

Surface of water bodies

Source: Albemarle, 2020 (Respuestas para auditoría interna realizada por SRK Consulting

Monitoring is conducted on a semi-annual basis (winter and summer), except for active vegetation coverage (according to the NDVI index estimation), which is annual and must be done in post-rain periods, typically after the Altiplanic Winter. With respect to lagoon coverage, the surveys are carried out in the months of August (together with the winter field survey) and December of the calendar year (summer analysis).

A report of each winter and summer survey, and an annual report, are sent to the SMA.

17.2.5Air Quality

Based on atmospheric emissions studies conducted for various Albemarle projects, the contributions of the La Negra Plant to the total emissions in the area, are low in proportion to the other industrial activities.

The environmental management measures to minimize air emissions from the operation at La Negra include:

•Dust collectors in the equipment of Planta La Negra

•Paving of access road (7 km) to the stockpile area

•Installation of bischofite in interior roads

•Waterproofing of salt collection sites and ponds

•Transfer of residual salt in trucks

•Transfer of the final product in airtight containers

•Transfer of brine in watertight cistern trucks

•Paving of 1,002 m of streets in the project's area of influence

An isokinetic measurement for Particulate Matter of 10 microns (PM10) is performed annually by means of the CH-5 method, in at least five emission control equipment per year (four from the Lithium Carbonate recovery section and one from the Soda Ash preparation section), alternating until completing the 15 equipment and continuing with the cycle.


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17.2.6Human, Health and Safety

Albemarle has an Occupational Health and Safety Management System. The framework of this system was taken from the System Manual, applicable to the plant at Salar de Atacama. The Salar Plant has a Safety Department and a Joint Hygiene and Safety Committee in accordance with the regulations for mining and safety in Chile. Albemarle also has an integrated management policy for Quality, Environment, Safety and Occupational Health and Sustainability. The system includes an annual audit to verify compliance with the regulations associated with the relevant occupational health and safety regulations, and includes the following preventive management tools:

•Safety meetings

•Inspections and planned observations

•Safe Work Permit

•Safe Work Analysis

•Executive monthly report from the Safety Department

•Hazard Identification and Risk Assessment

•Emergency Plan

Albemarle has an annual risk management program for its contractors and subcontractors, in which all elements of the management system are applied and monitored, including a program for the accreditation of contractors and subcontractors.

17.3Project Permitting

17.3.1Environmental Permits

SCL began operating in the Salar de Atacama in 1981 when there was no environmental legislation in Chile. It was not until 1998 that SCL projects were submitted to the Chilean environmental evaluation system, with the facilities in La Negra, and in the year 2000 for the facilities in Salar de Atacama. In 2012, SCL became Rockwood Lithium, which was acquired by Albemarle Corporation three years later.

The environmentally approved operation includes a brine extraction of 442 L/s, the production of 250,000 m3/year of brine concentrated in solar evaporation ponds with an approximate surface area of 1,043 ha, for a production of 94,000 t/year of LCE. Brine exploitation is authorized until 2043. Any modification of the production and/or extraction, or to any approved conditions, will require a new environmental permit.

The subsequent environmental approvals at La Negra and Salar de Atacama are presented in Table 17-4. The table also provides information about the instrument submitted to the Chilean Environmental Impact System (SEIA). According to Chilean legislation, an Environmental Impact Study (Estudio de Impacto Ambiental, EIA) is required to be submitted by the proponent for projects or project modifications where significant environmental impacts are expected to occur, and where specific measures for impact avoidance, mitigation, or compensation will need to be agreed upon. Alternatively, an Environmental Impact Declaration (Declaración de Impacto Ambiental, DIA) is required to be submitted by the proponent for projects or project modifications that are significant enough to warrant environmental review, but which are not expected to result in significant environmental impacts, as these are defined legally. A Relevance Consultation (Consulta de Pertinencia) must be submitted when the project


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proponent has doubts or needs clarification on whether a project, activity, or modification must submit to the SEIA.


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Table 17-4: Albemarle Projects in the Antofagasta Region with Environmental License

Project Name

Instrument

Location

Legal Approval

Description

Lithium Chloride Plant

EIA

La Negra

RCA N° 024/1998

Diversification of the product portfolio offered to the market through the production of anhydrous lithium chloride, with a production of 3,628 tonnes/year of lithium chloride.

Lithium Chloride Plant Modification

DIA

La Negra

RCA N° 046/1999

Change of the raw materials (lithium carbonate and hydroxide) that feed the Lithium Chloride Plant to refined brine and purified lithium carbonate, in order to reduce the consumption of both hydrochloric acid and lithium hydroxide.

Construction of solar evaporation ponds

DIA

Salar de Atacama

RCA N° 092/2000

Construction of 10 additional wells to the 17 already existing ones, comprising a total area of 680,000 m2. The project will allow for an increase in brine production from 60,000 tonnes/year to 80,000 tonnes/year, due to the increase of brines treated, because of the expansion of the well system with a total extraction flow of 113 L/s distributed in 12 pumping wells. Monitoring commitments were established.

Conversion to natural gas

DIA

La Negra

RCA N° 200/2000

Change of the supply of the La Negra Plant from diesel to natural gas by pipeline connection.

Modification of the “Construction of solar evaporation ponds” project

DIA

Salar de Atacama

RCA N° 3132/2006

The amount of brine production of 80,000 m3 was not achieved, so 3 wells are added to complete two systems of 15 wells each, adding an area of 37 ha and additional brine extraction of 29 L/s, reaching a total of 142 L/s.

Monitoring commitments were established.

Modification and improvements of the Operations of La Negra Plant

Phase 1

DIA

La Negra

RCA N° 264/2008

Consider the regularization of the increase in the production capacity of the lithium carbonate plant from 45 to 53 million pounds/year and the construction of 5 sedimentation and evaporation ponds with a capacity of 1,330,000 m3 for the disposal of liquid and solid waste.

Use of new technologies for process automation.

Expansion of La Negra Lithium Chloride Plant

Phase 2

DIA

La Negra

RCA N° 236/2012

Increase in the production capacity of the Lithium Carbonate Plant from 53 million pounds per year authorized to reach 100 million pounds per year, through the expansion and improvement of the processes of the La Negra Plant.

Potash Plant Rockwood Litio Ltda.

DIA

Salar de Atacama

RCA N° 0403/2013

Operation of the Dryer and the construction and operation of a Granulation Plant, both of which will form part of the process to obtain the product potassium chloride.

Removal of nitrate from lithium chloride brine, La Negra Plant

Consulta de Pertinencia

La Negra

Extent Resolution Nº 400/2013

Considers standardizing the removal of nitrate from lithium chloride brine by incorporating a second stage of solvent extraction (SX) from refined brine following the boron extraction process, using tributyl phosphate (TBP) as the extractant and a solvent, both of which are confined to a closed system, to be subsequently recirculated to the extraction process.

Research drilling in the Southwest of Salar de Atacama

Consulta de Pertinencia

Salar de Atacama

Extent Resolution Nº 614/2013

Drilling of research wells in the protected area, specifically in the aquifer that feeds the wetlands of the southern sector of the Salar de Atacama.

Research drilling in the Salar de Atacama Core area

Consulta de Pertinencia

Salar de Atacama

Extent Resolution Nº 673/2014

Drilling of research wells and observation piezometers in the Salar de Atacama core area, in addition to the execution of pumping tests to determine the hydraulic properties of the medium.


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Use of weak brine from Planta La Negra in process Planta el Salar process.

Consulta de Pertinencia

Salar de Atacama y La Negra

Extent Resolution Nº 673/2014

Re-use of 8,030 m3/m of the supernatant of the solution arranged in the evaporation pond of the La Negra plant towards the productive process of the Salar de Atacama Plant, to be reincorporated in the existing system of solar evaporation ponds. In this way, this brine is concentrated up to 6% of lithium, which will be sent to the La Negra plant to be used in the process.

Modification and improvement solar evaporation ponds system

EIA

Salar de Atacama

RCA N° 021/2016

Considers the increase of the brine extraction flow rate in 300 L/s (total 442 L/s), pumping of 16.9 L/s of water from the Tucucaro and Tilopozo wells, the construction of 2 well systems and 4 pre-concentration wells. The project has a useful life of 25 years.

Includes the construction of new solar evaporation surfaces. The project considers increasing the current 326 hectares in an area of 510 hectares, to reach a total area of 836 hectares.

Monitoring and an early monitoring plan were committed.

The operation of this project started on September 28, 2016.

Phase 3 La Negra Plant Expansion

DIA

La Negra and Salar de Atacama

RCA N° 0279/2017

Increases the production capacity of the Lithium Carbonate Plant located in the La Negra from 45,300 tonnes/year to reach a production of 88,000 tons/year of lithium carbonate, maintaining the production capacity of 4,500 tons/year of lithium chloride (equivalent to 6,000 tons/year of lithium carbonate equivalent (LCE)), thus achieving a total production of 94,000 tonnes/year LCE. In order to achieve this increase in production, modifications are required in the La Negra and Salar de Atacama Plants. The changes in the Salar de Atacama are:

New pre-concentrator and a new system of evaporator wells, which will allow a production of 250,000 m3/year of concentrated lithium brine at 6%, without modifying the amount of brine extraction authorized from the Salar de Atacama (442 L/s).

Twelve new salt collection sites, which will allow the precipitated salts of the current evaporation pool systems and the new evaporation pool system (System N° 5) to be disposed of.

Optimizing Efficiency and Sustainability Lithium Recovery Salar de Atacama Plant

Consulta de Pertinencia

Salar de Atacama

Extent Resolution 052/2018

Introduces improvements in the process of obtaining concentrated brine through the treatment processes of Bischofite and Li Carnalite, to improve efficiency in the recovery of lithium from 55% to a value in the order of 67%.

Modifications Phase 3 La Negra Plant Expansion

Consulta de Pertinencia

La Negra

Extent Resolution 89/2018

Makes modifications in the lithium carbonate processing lines and related services, with the aim of achieving the authorized processing capacity.

Exploration campaign for A2 area and the polygon South-East of the Salar de Atacama

Consulta de Pertinencia

Salar de Atacama

Extent Resolution 113/2018

Well drilling and pumping tests for exploration and geotechnical and hydrogeological knowledge of the surrounding of the exploitation areas.

Albemarle Camp, Planta Salar de Atacama

Consulta de Pertinencia

Salar de Atacama

Extent Resolution 158/2018

Installation of a new camp to serve a total population of 600 people in 2 phases.

Deepening of brine extraction wells in the Salar de Atacama

Consulta de Pertinencia

Salar de Atacama

Extent Resolution 947/2018

Pumping of 120 L/s of brine authorized in zone A1, up to a depth of 200 m, for a period of 5 years.


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Modification of the project Phase 3 La Negra Plant Expansion

DIA

La Negra

RCA N° 077/2019

Incorporation of new equipment in La Negra, in order to have an operational improvement and reach the approved production.

Regularization and modification of the contour channel.

Expansion of the Salar de Atacama water monitoring network

Consulta de Pertinencia

Salar de Atacama

Extent Resolution 323/2019

Construction of 16 boreholes to obtain information on freshwater-salt water levels in order to better understand the hydrogeological behavior in some sensitive sectors, where there is not enough information.

Source: Prepared by SRK based on information from Albemarle projects submitted into the Chilean Environmental Impact Assessment System, available at www.sea.gob.cl


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A new EIA is planned in order to make production in the Salar de Atacama more flexible. This will begin to be developed during 2020 and should be submitted by the end of 2021. Increased brine extraction over what has already been approved (442 L/s), is currently not being considered.

In order to follow the compliance with applicable regulations and the obligations established in the environmental approvals of Albemarle's operations in Chile, a management platform (GISMA) was fully implemented during 2020.

17.1.2Operating Permits

In addition to the main environmental permit, there are sectorial permits or operational permits that are required for construction and operation of new facilities or modification to approved facilities. These permits are granted by many different agencies, including the DGA (Dirección General de Aguas, DGA), the National Geology and Mining Service (Servicio Nacional de Geología y Minería, SERNAGEOMIN), and the Health Ministry (Ministerio de Salud).

Both La Negra and Salar de Atacama have their main permits to operate. Table 17-5 shows the types of permits granted for each area. Currently, there are some operational permits which have not yet been granted. These permits are mainly related to new facilities or changes associated to the Phase 3 of the operation. Pending permits are related with construction permits granted by the local municipality. The company is working on obtaining these permits, with a schedule anticipating approval in Q2 2021.

Table 17-5: Operational Permits for La Negra and Salar de Atacama Albemarle Facilities


Facility/Activity	Area	Permit	Issuing Authority
Evaporation ponds Sedimentation ponds Tailings ponds	La Negra	Disposal of industrial liquid waste	Regional Ministry of Health
Sedimentation ponds Evaporation ponds	La Negra	Disposal of industrial solid waste	Regional Ministry of Health
All industrial facilities	La Negra Salar de Atacama	Industrial Technical qualification	Regional Ministry of Health
Solid waste disposal yards	La Negra Salar de Atacama	Temporary disposal of non-hazardous waste, project and operation	Regional Ministry of Health
Hazardous waste warehouses	La Negra Salar de Atacama	Temporary disposal of hazardous waste, project and operation	Regional Ministry of Health
All areas	La Negra Salar de Atacama	Temporary disposal of domestic wastes, project and operation	Regional Ministry of Health
All areas	La Negra Salar de Atacama	Hazardous waste management plan	Regional Ministry of Health
All areas	La Negra Salar de Atacama	Potable water supply system, project and operation	Regional Ministry of Health
All areas - Sewage treatment plants	La Negra Salar de Atacama	Sewage system, project and operation	Regional Ministry of Health
Hazardous substances warehouse	Salar de Atacama	Storage of hazardous substances	Regional Ministry of Health
Equipment washing area	Salar de Atacama	Water treatment system	Regional Ministry of Health


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Casinos	La Negra Salar de Atacama	Casino operation	Regional Ministry of Health
Transport of food for the Casino	Salar de Atacama	Sanitary Authorization for Vehicles Transporting Foods that Require Cold Storage	Regional Ministry of Health
Discard salt	Salar de Atacama	Disposal of mining waste	Regional Ministry of Health
Ambulance	La Negra Salar de Atacama	Sanitary transport	Regional Ministry of Health
Polyclinic	La Negra Salar de Atacama	Sanitary authorization for medical procedure room	Regional Ministry of Health
Chloride Pant Fourth Train Plant Carbonate plant	La Negra	Boiler register	Regional Ministry of Health
Stockpiles of discard salts	La Negra Salar de Atacama	Waste dumps	National Service of Geology and Mining
All areas	La Negra Salar de Atacama	Closure plans	National Service of Geology and Mining
Brine extraction	Salar de Atacama	Exploitation method	National Service of Geology and Mining
All plants	La Negra	Mineral processing plant	National Service of Geology and Mining
Sedimentation and evaporation ponds	La Negra Salar de Atacama	Hydraulics works	General Directorate of Water
Several new constructions (Phase 3)	La Negra Salar de Atacama	Building permits	Municipality
All constructions	La Negra Salar de Atacama	Favorable report for construction (land use)	Regional Ministry of Agriculture
Various new facilities (Phase 3)	La Negra	Final reception of works
All areas	La Negra Salar de Atacama	Limited telecommunications service permit	Undersecretary of communication
All areas	La Negra Salar de Atacama	Declaration of indoor installation of gas and liquid fuels	Superintendence of Electricity and Fuels
All areas	La Negra Salar de Atacama	Internal electrical declaration	Superintendence of Electricity and Fuels
Main stack gas emission natural gas (CO2, NOx, SO2) Wet air stack with particulate emissions	La Negra	Application for Height Certificate for buildings near an airport, airfield, heliport or radio aid	Ministry of Justice
Densimeters	La Negra	Transport of radioactive material	Chilean Nuclear Energy Commission
Plant access	La Negra	Access to public road	Highway administration Bureau
Crossing Line 23kV with Aqueduct FCAB Crossing HDPE (Tunnel Liner) under FCAB Railway Line Crossing Sewer Line with Aqueduct FCAB	La Negra	Interferences with railroads	Ministry of Economy


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Source: Prepared by SRK based in the permit spreadsheet delivered to SRK by Albemarle (2020)

17.1.3Water Rights

Albemarle has water rights granted by the DGA for those wells from which freshwater is extracted and used as industrial water for the process. The water rights correspond to the wells located in Tilopozo (8.5 L/s), Tucucaro (10 L/s), and Peine (5 L/s), with a total right to extract 23.5 L/s. The Tilopozo and Tucucaro wells are the only wells currently used, for a total of 16.9 L/s.

In La Negra, there is a well that has water rights granted by the DGA for the extraction of 6 L/s.

It should be noted that, for brine extraction wells, no groundwater rights are required, as this corresponds to the extraction of a mineral resource.

17.4Plans, Negotiations, or Agreements

Albemarle maintains a Social Management Plan which is part of the guidelines, strategies and corporate actions for community relations. Within the framework of these guidelines, Albemarle currently has formal agreements, since 2016, with the Council of Atacameño Peoples and with the 18 Indigenous Communities (Atacameñas) that make up the ADI; with the Atacameña Community of Peine, since 2012; with the municipality of San Pedro de Atacama, the Culture and Tourism Foundation of San Pedro de Atacama and the Sports Corporation of the same commune, since 2017.

These agreements, which represent the main stakeholders of the project's area of influence in the Salar de Atacama area, are predicated on constant dialogue through permanent Working Groups (on a monthly basis), in which all the challenges, projects, and/or scopes of the same agreements are presented. These Working Groups are where Albemarle presents proposed projects and socially manages them with all the stakeholders. The Working Groups function, among others, is to be a channel for grievance and/or complaints, in which any participant and/or community member can present their claims. Additionally, there is a web channel and helpline where the community can make complaints (www.IntegrityHelpline.Albemarle.con).tOf particular note is the agreement signed with the 18 indigenous communities that make up the Council of Atacama Peoples which is an agreement of Cooperation, Sustainability and Mutual Benefit. Through this partnership agreement, Albemarle undertakes to deliver 3.5% of the sales of lithium carbonate and potassium chloride produced at the Salar Plant and to establish joint work for monitoring and surveillance of the Salar de Atacama's environmental resources. The agreement also includes the accompaniment and advice of the Inter-American Development Bank with a view to jointly generate a formula for economic governance of the resources, so that this agreement translates into the institutional strengthening of the indigenous organizations involved.

17.5Mine Reclamation and Closure

17.5.1Closure Planning

As mentioned in Section 17.3.2, Albemarle has a closure plan approved by SERNAGEOMIN (National Service of Geology and Mining) in 2019 (Res. Ex. N°287/2019). This closure plan includes all environmental projects approved until 2016, including EIA “Modification and improvement solar evaporation ponds system” (RCA N°021/2016).


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As part of the closure plan, the life of mine must be defined based on proven and probable reserves. In the approved closure plan, an ending date of operation has been defined as 2043. However, this date is only defined for financial assurance purposes, and it does not define the date of definitive closure.

The approved closure plan, developed based on the environmental projects approved until 2016, include all the following facilities:

•La Negra Plant

◦Lithium chloride plant

◦Leaching (SX) or Boron plant

◦Lithium carbonate plant

◦Evaporation ponds – sedimentation

◦Auxiliary facilities

◦Sodium ash warehouse

◦General

•Salar de Atacama Plant

◦Extraction wells

◦Evaporation ponds – concentration

◦Carnallite leaching plant

◦Potash plant

◦Drying plant

◦Leaching plant 1

◦Leaching plant 2

◦Service area

◦General/Waste salts stock.

To define the closure measures described in the closure plan, a closure risk assessment was developed to ensure physical and chemical stability of the remaining facilities after closure. For all infrastructure, standard activities have been considered. Closure measures included in the closure plan are:

•Pond backfilling, and profiling. Pond’s liner removed from slopes and covered in pond’s bottom

•Dismantling of all infrastructure

•Demolish of all concrete structures

•Equipment disassembly

•Piping and fitting disassembly (includes piping flushing)

•Dismantling of electric poles and equipment

•Final disposal of all concrete and steel structures

•Ground profiling

Based on these closure measures, a 17-months period has been estimated for the closure execution program in the approved closure plan. This program considers both La Negra and Salar de Atacama activities to begin at the same time (August 2038). The closure execution program considers work fronts for each of the different specialties involved in the dismantling process, as follows: de-energizing activities, equipment dismantling, piping dismantling, steel and concrete dismantling and demolish and at the end, profiling and backfilling as necessary. Based on the facilities complexity


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and quantities estimated, the critical path of the closure execution program includes both the Carbonate Lithium plant dismantling process and the sedimentation ponds closure activities.

There is no internal closure plan of La Negra or Salar de Atacama plants. Therefore, no closure analysis has been developed nor reviewed in terms of social transition, post closure land use, stakeholder engagement or mine closure provisions.

17.5.2Closure Cost Estimate

Albemarle does not maintain a current internal LoM cost estimate to track the closure cost to self-perform a closure for the site. The closure cost reviewed was prepared to comply with financial assurance requirements of Chilean law. The estimate was prepared by SGA based on the approved closure plan and a conceptual estimate of all environmental projects presented in Table 17-6 that were not included in the closure plan.

The total closure costs of La Negra and Salar de Atacama Plants are presented in Table 17-6. Note, these values correspond to financial assurance costs and do not necessarily reflect actual closure costs.

Table 17-6: La Negra and Salar de Atacama Closure Costs1


Description	La Negra (US$)	Salar de Atacama (US$)	Total (US$)
Direct cost	12,990,548	12,970,789	25,961,337
Indirect cost	4,582,075	2,586,305	7,168,380
Contingency	4,262,421	3,500,054	7,762,475
Total	21,835,044	19,057,149	40,892,193

Note that La Negra and Salar de Atacama closure plan presents costs including taxes (19% of the total closure cost presented in Table 17-6), as per required by Law 20551.

1Closure costs originally estimated in Unidad de Fomento (UF). Fx rates considered as 1 UF = 28,827.5 CLP; 1 US = 775.56 CLP.

As it is shown in Table 17-6, total financial assurance closure costs include direct and indirect costs, as well as the contingencies associated to the engineering level of the estimate. As it was mentioned before, closure costs come from two different estimates: (1) approved closure plan (which represents 65% of the total closure costs), and (2) environmental projects approved after closure plan was approved (which represents 35% of the total closure costs). Due to this, two different approaches have been considered for the estimate of the closure costs, which are described as follows.

Closure costs estimated in the approved closure plan consider:

•Direct Costs: these costs are considered as all costs related to the execution of the closure measures and works, and they have been estimated as the product of material quantities and unit prices. Unit prices have been estimated including all contractor costs (labor, equipment, and contractor’s indirect costs), meanwhile material quantities were estimated from field measurements, and drawings.


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•Indirect Costs: these costs have been estimated considering administration, technical inspection, meals, cleaning staff, transport, surveillance and maintenance for a total period of 20 months, which includes execution, mobilization and demobilization of contractors.

•Contingency: contingencies have been estimated based on a range analysis of all variables involved in the cost estimate, ranging from 0% on the most certain items to 52% on the most uncertainty factors.

Closure costs estimated for the environmental projects not included in the approved closure plan consider:

•Direct Costs: the estimate of these costs have been also estimated as the product of material quantities and unit prices. Unit prices have been kept from what has been considered in the approved closure plan, meanwhile material quantities were estimated from drawings or satellite images based on material take-off factors per square meters of constructed areas.

•Indirect Costs: these costs have been estimated as 20% of the direct costs.

•Contingency: contingencies have been estimated as 30% of direct and indirect costs.

17.5.3Performance or Reclamation Bonding

Mine closure regulation in Chile (Law N°20.551) started in 2012, and its beginning marked a milestone in how mining companies in Chile address mine closure. This law specifically requires that all mining companies proposing to begin, continue or restart operations must have an approved closure plan. The mine closure law also requires that closure plans be updated at least every 5 years, and any time a mine (a) obtain environmental approval of a new project that makes significant modification to the mine configuration, (b) obtain environmental approval of a new project that changes the mine closure phase, (c) after restarting its operation, (d) after finishing partial closures, and (e) by request of the SERNAGEOMIN.

Mining companies with extraction rates larger than 10.000 t per month (mining companies with extraction rates lower that 10,000 t per month are required to present a simplified closure plan) must present in their closure plans a detailed description of the mine facilities (in their final configuration), a closure risk assessment and the closure measures proposed, design for those measures, closure costs, and a financial assurance estimate.

Financial assurances are intended to guarantee that the Government complete will have the necessary funds to implement the approved closure plan in the event of a bankruptcy or abandonment. These bonds must be determined as the net present value of the total closure cost of the mine site, based on the closure cost estimate, which assumes all facilities in their final configuration. Additionally, and considering that closure plans may be presented every five years, the Law N°20.551 requires that the financial assurance must be determined for each operating year, beginning from the year of submittal of the closure plan until the last year of operation.

Albemarle has a mine closure plan in compliance with the mine closure law and approved in 2019, with a financial assurance estimate through year 2045 (Figure 17-3).


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Source: Albemarle

Bonding values approved originally stated in Unidad de Fomento (UF). Fx rates considered as 1 UF = 28,827.5 CLP; 1 US = 775.56 CLP.

Figure 17-3: La Negra and Salar de Atacama Financial Bonding Program Approved

As it is shown in Figure 17-3, mine closure law defines a period where the financial assurance posted is lower than the present value of the total closure cost. This period finishes in 2030 when the financial assurance posted will be equal to the present value of the estimated closure liability.

17.5.4Limitations on the Cost Estimate

The closure cost estimate for the site was prepared by SGA (www.sgasa.cl). Its purpose is to provide the Chilean government an assessment of the closure liabilities at the site and form the basis of financial assurance. This type of estimate typically reflects the cost that the government agency responsible for closing the site if an operator fails to meet their obligation. If Albemarle, rather than the government, closes the site in accordance with their current mine plan and approved closure plan, the cost of closure is likely to be different from the financial assurance cost estimate approved by the government.

There are several costs that are typically included in the financial assurance estimates that would only be incurred by the government, such as government contract administration. Other costs, such as head office costs, a number of human resource costs, taxes, fees, and other operator-specific costs that are not included in the financial assurance cost estimate would likely be incurred by Albemarle during closure of the site. Because Albemarle does not currently have an internal closure cost estimate other than for financial assurances, SRK was not able to prepare a comparison of the two types of closure cost estimates. The actual cost could be greater or less than the financial assurance estimate.

The estimate uses fixed unit rates for different activities and there is no documentation on the basis of those unit rates. Because of this, SRK cannot validate any of the unit rates used in the model or the overall cost estimate.


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17.6Plan Adequacy

In SRK’s opinion, the operations of Albemarle have adequate plans to address and follow-up the most sensitive and relevant environmental issues, such as hydrogeological/biodiversity issues, and those associated with the indigenous communities in the Salar de Atacama area.

In SRK’s opinion, Albemarle adequately follows up on issues related to water quality in the Negra and fluctuations in the water table and potential effects on the sensitive ecosystems around the Salar de Atacama, including analysis of possible cumulative effects given the multiplicity of actors that extract brine and freshwater in the area. The aim of the Early Warning Plan is to promptly detect any deviation from what was indicated in the initial environmental assessment, preventing unforeseen impacts from occurring. Notwithstanding the above, the Salar de Atacama is a complex system and requires constant updating of management tools based on the results of the monitoring programs, and also be attentive to requirements or new tools that the authority may incorporate.

Albemarle maintains relations with all the communities and indigenous groups in the area that, in the QP’s opinion, are very good. Any future development or modification of the current conditions of the operation will be subject to an Indigenous Consultation Process; therefore, it is of high importance to maintain this adequate management strategy with these communities.

Management of regulatory and environmental obligations has been recently improved, incorporating a GISMA monitoring platform, which is scheduled to be completed by the end of 2020.

17.7Local Procurement

Regarding the hiring of local labor, Albemarle does not have formal commitments with any local authority; however, currently, 84% of Albemarle workers are from the Antofagasta region and 39% of the workers of the Salar de Atacama area are from nearby communities. Although there is no formal agreement, in the case of the Salar de Atacama, every new job opening is promoted in the area and within the communities. This issue will be incorporated into the community relations policy currently being developed by Albemarle.


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18Capital and Operating Costs

The Salar de Atacama and La Negra are currently in operation, producing technical and battery grade lithium carbonate as well as byproducts. Capital and operating costs are forecast as a normal course of operational planning with a primary focus on short term budgets (i.e., subsequent year). Mid (e.g., five year plan) and long-term (i.e., life of mine) planning are not as detailed although operations do evaluate conceptual long-term performance. As there is not an official mid-term or life of mine budget to rely upon to support estimation of reserves, SRK developed its own long-term operating forecast. SRK developed this forecast based on some of the forecast data utilized at the operation with adjustments made by SRK based on historic operating results. These forecasts account for changes in production rates associated with expansion plans that are largely complete and SRK utilized these adjustments, including modification, as appropriate.

Estimation of capital and operating costs is inherently a forward-looking exercise. These estimates rely upon a range of assumptions and forecasts that are subject to change depending upon macroeconomic conditions, operating strategy and new data collected through future operations. For this report, capital and operating costs are estimated to a PFS-level, as defined by S-K 1300, with a targeted accuracy of +/-25%. However, this accuracy level is only applicable to the base case operating scenario and forward-looking assumptions outlined in this report. Therefore, changes in these forward-looking assumptions can result in capital and operating costs that deviate more than 25% from the costs forecast herein.

18.1Capital Cost Estimates

Capital cost forecasts are estimated based on (i) a baseline level of sustaining capital expenditures, in-line with historic expenditure levels, adjusted for changing production rates, and (ii) strategic planning for major capital expenditures. Table 18-1 presents historical capital expenditures for reference (2015-2020) and estimated capital for 2021. Note that this is within 5% of the modeled capital amount for 2021.


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Table 18-1: Capital Expenditure (Nominal US$M for 2015-2019, Real 2020 US$M for 2020/2021)


Trailing Five Year Capital by Expenditure Type, Actual							Capital Forecast by Expenditure Type, Estimate
Salar de Atacama/La Negra	2015	2016	2017	2018	2019	2020	2021AOP
Salar (Major Projects)
Post Permit Salar Expansion	6.0	14.6	31.8
Salar Ponds and Wells		2.2	1.3	22.4	16.5	2.2
Salar Yield Improvement + New Camp Atacama			.4	10.9	24.1	2.6	40.4
Salar Drilling		1.8	10.2	9.3	9.9	4.9	4.4
La Negra (Major Projects)
La Negra 3	.0	7.1	110.3	250.5	225.0	119.0	90.0
Lithium Carbonate Expansion Phase 1-A	34.9	2.6	1.1
Lan 2 Centrifuges & Other Debottlenecking			1.9	21.3
Lan Infrastructure				5.1	3.5
Lan Milling				8.0
La Negra 1				3.6	2.7
Lan 2 Get Rights				2.6
Lithium Carbonate Expansion Phase 1-A	34.9	2.6	1.1
Major Project Subtotal	75.8	30.9	158.2	333.6	281.6	128.7	13.4.8
Salar Sustaining Expenditure
General	4.9	1.5	9.1	5.4	4.4	3.0	10.2
La Negra Sustaining Expenditure
General	18.9	10.6	13.8	7.6	12.0	13.5	23.3
Site Capital Subtotal	23.8	12.1	22.9	12.9	16.3	16.5	33.5
Total Capital Expenditure	99.6	43.0	181.1	346.6	297.9	145.2	168.3

Source: Albemarle Cost Reporting

In reviewing these costs, there has been significant capital invested in expansion of operations at both the Salar and La Negra over the past five years. Associated with expanded production rates, general sustaining capital expenditure has also increased. Looking forward, there remains material spend forecast in 2021, largely associated with completion of the La Negra 3 project. With the completion of La Negra 3 in 2021, there remains one material future capital project, the SYIP. This project has been underway for several years (as seen in Table 18-1), although the most significant investment is not anticipated until 2022.

The La Negra 3 project is part of a multi-year effort to significantly expand production from the combined Salar de Atacama and La Negra. This expansion targets taking La Negra’s annual production capacity from approximately 45,000 t LCE to approximately 84,000 t LCE. Material expenditure on this project initiated around 2016 with a total forecast capital budget of US$773 million (inclusive of $14.5 million contingency). Commissioning of La Negra 3 is expected to occur in the second half of 2021 with approximately $90.7 million budgeted for expenditure in 2021 and 2022. As the project is nearing completion of construction activities, engineering and procurement are nearly at 100%. Because of this, there is a high level of confidence in the remaining budget. Beyond 2022, Albemarle has not forecast any additional expenditure on La Negra 3 as the project will be commissioned. However, as this is a large, complex chemical production facility, it is likely that ramp-


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up will take a significant period (at least into 2022 if not 2023). Therefore, although the future need for additional capital is currently not known, SRK has included an allocation in both 2022 and 2023 to account for the potential that additional expenditure is required during ramp-up. SRK’s capital allocations associated with La Negra 3 are US$15 million and US$ 5 million in 2022 and 2023, respectively.

The SYIP is an ongoing project that is at an earlier stage than La Negra 3. The project is targeting improving recovery rates of lithium from the evaporation ponds from the Salar de Atacama and is discussed in more detail in Section 14.1.2. As of December 31, 2020, approximately US$37.5 million has been spent on this project out of the total capital estimate of $148.6 million (includes $16.5 million contingency and is dated February 2019). This capital estimate was classified as a Class 2 estimate (uncertainty estimated as approximately +/-10% and an 80% confidence interval). However, this project has been delayed from the early 2019 planning which forecast completion in late 2020. Current planning assumes a three-year delay with project ramp up in 2024. Although the current estimate is advanced as a Class 2, resulting in a relatively low level of uncertainty, the delay adds risk to the capital estimate. Nonetheless, in SRK’s opinion, even with the delay, the project meets the PFS target of this report and has therefore not modified the capital estimate beyond the projected additional spend. While this spend is higher than the initial estimate, the volatile economic environment has yielded cost changes and SRK has accepted the most recent forecast cost for modelling purposes. Based on the currently projected timing and remaining capital estimate, the remaining spend on this project is US$38.4 million, US$136.6 million in 2021 and 2022, respectively.

On a longer-term basis, as discussed in Section 14.1.1, due to a projected change in the calcium to sulfate ratio in the raw brine feed, SRK assumes that a liming system will need to be added in the future to manage this ratio and maintain current lithium recovery rates in the evaporation ponds. SRK’s life of mine pumping plan requires this plant to be operational by year end 2026. Therefore, SRK has assumed construction of this plant in 2025. As the need for this plant is still uncertain (i.e., further optimization of the pumping plan may better balance calcium and sulfate) and the timing is still several years away, there is no study supporting development of this plant. Therefore, SRK developed a scoping level costs based on benchmarking against recent estimated development cost for a similar plant in the region. SRK’s cost estimate is US$22 million for this liming plant, including a 35% contingency.

Outside of the projects discussed above, for the purpose of forecasting capital to support the reserve estimate, SRK did not include additional expenditure for operational improvement as no improvement is assumed in operating performance relative to historic. Therefore, SRK’s remaining sustaining capital forecast includes a direct estimate of replacement/rehabilitation of production wells and a single line item to capture all other miscellaneous sustaining capital.

For the estimate of replacement/rehabilitation of production wells, SRK assumes a typical cost of US$350,000 per well. At steady state, this results in approximately US$3.5 million per year in production well replacement costs.

For a typical annual sustaining capital meant as a catch-all for all other items, SRK assumes that with expanding production and operations, over time, the salar and La Negra will require higher expenditure than historic. Based on discussions with Albemarle personnel, SRK has assumed a total of approximately US$24 million per year in sustaining capex at the salar, inclusive of well replacement. Deducting the well replacement costs, this results in a non-well replacement average


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capex of around US$20 million per year at the salar. At La Negra, SRK has assumed an additional US$30 million per year, based on similarly scaling up historic norms.

Table 18-2 presents capital estimates for the next 10 years and the life of the reserve. Total capital costs over this period (July 2020 to December 2043) are estimated at $1.4 billion in 2020 real dollars.

Table 18-2: Capital Cost Forecast ($M Real 2020)


Period	Total Sustaining Capex	Total Expansion Projects	Capital Expenditure (US$M Real 2020)
2021	43.0	116.4	159.4
2022	52.6	51.0	103.6
2023	48.2	141.6	189.8
2024	51.0	-	51.0
2025	74.4	-	74.4
2026	53.8	-	53.8
2027	53.8	-	53.8
2028	53.8	-	53.8
2029	53.8	-	53.8
Remaining LOM (2031 – 2043)	685.6	--	726.5

Note: 2021 capex is September – December only, assumed at 33% of total 2020 spend

Source: SRK, 2021

18.2Operating Cost Estimates

Five years’ trailing cash operating costs are presented in Table 18-3. Operating costs are site specific (e.g., they do not include corporate overheads although there are overheads for Albemarle Chile). Note that for internal reporting purposes, Albemarle allocates brine production costs to the year the brine is processed (i.e., an approximate 24 month delay from the actual cost being incurred). The costs shown in Table 18-3 reflect the costs at the time incurred so reflect different results than Albemarle’s accounting.


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Table 18-3: Historic Operating Costs ($M, Nominal)


	2016 Act	2017 Act	2018 Act	2019 Act	2020 Act
Utilities	9.14	11.37	15.14	9.23	10.20
Salaries and Benefits	21.16	25.82	35.43	45.07	40.75
Soda Ash	14.78	18.40	22.29	25.21	26.57
Lime	0.90	1.19	1.39	1.49	1.78
HCl	2.21	3.46	4.78	2.71	1.43
Packaging	1.45	1.37	1.75	1.76	1.94
Other Raw Materials	0.58	1.03	1.22	0.98	1.15
Concentrated Brine Transport	2.68	3.32	3.72	4.69	5.71
Outside Services	5.21	10.70	14.86	36.38	28.57
Other	34.00	47.53	59.80	46.58	38.16
Total	92.14	124.18	160.39	174.10	156.27
Annual Production (metric tonnes lithium carbonate equivalent)	26,135	28,810	32,942	39,956	40,121
Unit Cash Cost ($/metric tonne lithium carbonate)	3,198	3,770	4,014	4,339	3,552

Notes:

•Costs included are cash costs only (e.g., depreciation and depletion not included)

•“Outside Services” generally reflects salt harvesting

•“Other” costs generally include SGA, insurance, community payments, maintenance and waste disposal

•2020 production is estimated as of year-end 2020, not actual

•Community royalty payment included state royalty excluded

•Costs directly associated with production of potash and other byproducts excluded as byproduct reserves are not reported and the production of byproducts is not included in the reserve assumptions (i.e., no revenue included)

Source: Albemarle Cost Reporting

As noted above, Albemarle does not have an official long term cost forecast for the operation (2021 is the latest official forecast available, although unofficial internal life of mine outlooks have been developed). Therefore, SRK developed a cost model to reflect future production costs. To develop this cost forecast, SRK worked with site personnel, including reviewing unofficial forecasts, and developed a simplified operating cost model based on fixed and variable costs, adjusted for changes in operations, as appropriate.

In evaluating the historic costs and discussing the cost profile with Albemarle, the majority of the Salar de Atacama/La Negra costs are fixed. However, there are material changes planned for the operation that are expected to change even the fixed cost basis for the operation. These changes include the following:

•Addition of R&D payment contemplated in 2016 agreement

•La Negra III increased production

•Electrical grid connection for the salar

•SYIP at the salar

•Likely long-term requirement to add a liming plant at the salar

For each of these structural changes to the operation, SRK assumed changes to the fixed cost basis. Beyond these fixed cost modifications, SRK also applied variable unit costs to a range of cost inputs. These include the following:

•Raw Materials, Including:

◦Soda Ash (modeled individually)

◦Lime (modeled individually)

◦HCl (modeled individually)


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◦Packaging (modeled individually)

◦Other (factored against historic costs)

•Concentrated Brine Transport

•Electricity (partially variable)

•Other Utilities (e.g., natural gas / water)

•Salt Removal (partially variable)

•Waste Disposal

•Maintenance / Repair (partially variable)

For key raw materials, including soda ash, lime, HCl and packaging, as well as for brine transportation, SRK individually calculated unit consumption. The remaining variable costs are calculated based on factoring historic actual costs/production rates. Forecast unit rates were provided by Albemarle for soda ash, lime, HCL and brine transport (SRK based the packaging forecast on historic costs, which have been relatively consistent). Unit consumption and costs for these items are presented in Table 18-4.

Table 18-4: Key Assumptions, Variable Cost Model


Item	Consumption Rate	Unit Cost
Soda Ash	2.27 tonne/tonne LCE sold	US$274/tonne
Lime	0.21 tonne/tonne LCE sold	US$174/tonne
HCl	0.11 tonne/tonne LCE sold	US$270/tonne
Packaging	Direct application to final product	US$44/tonne LCE sold
Raw Brine Transport	Assumes 6% Li concentration in transported brine	US$27.65/tonne

Note: Lime consumption reported above applicable to La Negra operations, in the long-term, with the assumed requirement to add liming at the salar, the assumed consumption rate increases.

Source: SRK 2021

As seen in Table 18-3, soda ash is the most important component of these key variable costs. Albemarle provided the long term price assumption for soda ash, but SRK has also tested the sensitivity of the project economics to soda ash consumption, as described in Section 19.2.

For calibration purposes, SRK compared historic costs to the cost model outputs. These results are presented in Table 18-5. As seen in this table, in comparison to the 2018 to 2020 costs, the model returns a reasonable prediction. Going back to 2016 and 2017, the model significantly overpredicts the actual costs. There are several factors in play, with the most significant being the scale of production as La Negra II was ramping up in this period with annual production rates increasing from around 30,000 t LCE in this early period to more than 40,000 t LCE. Further, final product mix has also changed over time with a historic mix of lithium chloride, technical grade lithium carbonate and battery grade lithium carbonate, transitioning to predominantly battery grade lithium carbonate, limited technical grade lithium carbonate and no lithium chloride. In short, the 2016 and 2017 operating results cannot be directly compared to the current (and forecast cost structure). When looking at the 2018-2020 costs, the operating cost model under-predicts the total operating cost by approximately 4%, on average with 2018/2019 costs underpredicted and 2020 costs overpredicted. Looking forward, in SRK’s opinion, this balance is reasonable given the 2018/2019 costs were likely slightly inflated due to higher lithium prices and significant development activities associated with ongoing expansion whereas 2020 and to date 2021 costs are likely slightly distorted, reflecting a depressed market and measures associated with COVID-19. While the cost modelling exercise requires the use of accurate historical costs for development of the model, SRK has updated, where


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possible with mid to late year 2021 forecast numbers for 2021. As a final note, given there are several structural changes forecast to the operation, as noted above, SRK has adjusted the fixed cost basis in future operating periods to account for these changes that are not reflected in this calibration exercise.

Table 18-5: Operating Cost Model Calibration Results ($M)


	2016	2017	2018	2019	2020
Utilities	6.82	7.80	9.46	9.50	10.42
Salaries and Benefits	37.99	37.99	37.99	37.99	37.99
Soda Ash	17.92	20.49	24.85	24.95	27.79
Lime	1.05	1.20	1.46	1.47	1.66
HCl	0.86	0.98	1.19	1.19	2.74
Packaging	1.27	1.45	1.76	1.77	2.62
Other Raw Materials	0.69	0.79	0.96	0.96	1.05
Raw Brine Transport	3.12	3.56	4.32	4.34	4.76
Outside Services	23.14	24.79	25.84	27.56	27.63
Other	43.29	44.44	45.24	46.36	45.71
Total Modeled	136.14	143.49	153.06	156.09	162.36
Total Actual	92.14	124.18	160.39	174.10	156.27
Model Differential	48%	16%	-5%	-10%	4%

Source: SRK

Note modeled costs are real 2020-2021 dollars, actual costs are nominal.

Based on this operating cost model, total annual forecast operating costs for the Salar de Atacama/La Negra operations are shown in Figure 18-1.

Note 2021 costs reflect a partial year (September – December)

Source: SRK

Figure 18-1: Total Forecast Operating Expenditure (Real 2021 Basis)


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19Economic Analysis

SRK has not included the production of byproduct streams into this analysis. However, the operation does produce byproducts that have historically generated approximately US$20 million per year in revenue, net of costs specific to production of those byproducts. As the byproducts are not included in the resource and reserve models, they are not included in the cashflow model.

19.1General Description

SRK prepared a cash flow model to evaluate Salar de Atacama' reserves on a real, 2021-dollar basis. This model was prepared on an annual basis from the reserve effective date to the exhaustion of the reserves. This section presents the main assumptions used in the cash flow model and the resulting indicative economics. The model results are presented in US$, unless otherwise stated.

All results are presented in this section on a 100% basis, reflective of Albemarle’s ownership.

19.1.1Basic Model Parameters

Key criteria used in the analysis are presented throughout this section. Basic model parameters are summarized in Table 19-1.

Table 19-1: Basic Model Parameters


Description			Value
TEM Time Zero Start Date			Sept 1, 2020
Pumping Life (first year is a partial year)			22
Operational Life (first year is a partial year)			24
Model Life (first year is a partial year)			25
Discount Rate			8%

All cost incurred prior to the model start date are considered sunk costs. The potential impact of these costs on the economics of the operation are not evaluated. This includes contributions to depreciation and working capital as these items are assumed to have a zero balance at model start.

The operational life extends two years beyond the pumping life to allow for recovery of the lithium pumped to the ponds from the wellfield.

Closure costs are incorporated at the end of the operational life.

The selected discount rate is 8% as provided by Albemarle.

19.1.2External Factors

Pricing

Modeled prices are based on the prices developed in the Market Study section of this report. The prices are modeled as US$10,000/t technical grade Li2CO3 over the life of the operation. This price is a CIF Asia price and shipping costs are applied separately within the model.


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Taxes and Royalties

As modeled, the operation is subject to a 27% federal income tax rate. All expended capital is subject to depreciation over an eight-year period. Depreciation occurs via straight line method.

As the operation is located in Chile, it is also subject to a Chile Specific Mining Tax at a rate of 5%of gross revenue with deductions for operating costs and depreciations.

The operation is subject to a Corfo royalty on Lithium. The royalty is a progressive royalty based on lithium price. The royalty schedule modeled is outlined in Table 19-2. Other royalties such as community payments are included in the operating cost model assumptions.

Table 19-2: Corfo Royalty Scale


LCE Price (USD/t)			Royalty Rate
0-4,000			6.80%
4,000-5,000			8.00%
5,000-6,000			10.00%
6,000-7,000			17.00%
7,000-10,000			25.00%
Over 10,000			40.00%

Source: SRK

Working Capital

The assumptions used for working capital in this analysis are as follows:

•Accounts Receivable (A/R): 30-day delay

•Accounts Payable (A/P): 30-day delay

•Zero opening balance for A/R and A/P

19.1.3Technical Factors

Pumping/Extraction Profile

The modeled pumping profile was developed by SRK. The details of this profile are presented previously in this report. No modifications were made to the profile for use in the economic model. The modeled profile is presented in Figure 19-1. Note that 2021 is a partial year.

Source: SRK, 2021

Figure 19-1: Salar de Atacama Pumping Profile (Tabular Data shown in Table 19-9)


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A summary of the modeled life of operation pumping profile is presented in Table 19-3.

Table 19-3: Modeled Life of Operation Pumping Profile


Extraction Summary	Units	Value
Total Brine Pumped	tonnes	287,809,828
Total Contained Lithium	tonnes	590,993
Average Lithium Grade	mg/l	2,053.41
Annual Average Brine Production	m3	13,082,265
Annual Average Brine Production	Acre Feet	10,606

Source: SRK, 2021

Processing Profile

The processing profile is identical to the pumping profile. The material pumped is immediately fed to the processing circuit consisting of evaporation ponds and processing plant.

The production profile is the result of the application of processing logic to the processing profile within the economic model. The recovery curve is hardcoded for the beginning of the modeled operation to reflect actual performance. The recovery curve ramps from 39% to 45% over several years. After 2023, the salar yield is governed by a recovery curve. The following recovery curve was applied to raw brine pumping profile to account for losses in the evaporation ponds:

Lithium Pond Recovery = - 19.1880 * (Li%)2 + 7.4721*Li %-0.0746

After the assumed start of operations of the liming plant in 2027, SRK has assumed a fixed 65% recovery factor in the evaporation ponds. An additional 80% fixed lithium recovery is applied to account for losses in the lithium carbonate plant.

Final lithium production in the model is delayed by two years from the date of pumping to allow for the brine to concentrate in the evaporation ponds. As a result, the production in the years immediately following the start of the model is based on historical pumping. The modeled processing and production profiles are presented in Figure 19-2 and Figure 19-3 below.

Source: SRK

Figure 19-2: Modeled Processing Profile (Tabular Data shown in Table 19-9)


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Source: SRK

Figure 19-3: Modeled Production Profile (Tabular Data shown in Table 19-9)

A Summary of the modeled life of operation profile is presented in Table 19-4

Table 19-4: Life of Operation Processing Summary


LoM Processing	Units	Value
Lithium Processed	tonnes	590,993
Combined Lithium Recovery	%	53.13%
Li2CO3 Produced	tonnes	1,672,059
Annual Average Li2CO3 Produced	tonnes	69,669

Source: SRK

Operating Costs

Operating costs are modeled in US$ and are categorized as utilities, processing and shipping costs. No contingency amounts have been added to the operating costs within the model. A summary of the operating costs over the life of the operation is presented in Table 19-5 and Figure 19-4.

Table 19-5: Operating Cost Summary


LoM Operating Costs	Units	Value
Salar Costs	US$	1,200,245,103
Processing Costs	US$	3,222,391,065
Shipping & G&A Costs	US$	1,111,471,819
Total Operating Costs	US$	$5,534,107,988
Royalty Costs	US$	2,294,064,911
Salar Costs	US$/t Li2CO3	718
Processing Costs	US$/t Li2CO3	1,927
Shipping & G&A Costs	US$/t Li2CO3	665
LOM C1 Cost	US$/t Li2CO3	3,310
Royalty Costs	US$/t Li2CO3	1,372

Source: SRK


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Source: SRK

Figure 19-4: Life of Operation Operating Cost Summary (Tabular Data shown in Table 19-9)

The contributions of the different operating cost segments over the life of the operation are presented in Figure 19-5.

Source: SRK

Figure 19-5: Life of Operation Operating Cost Contributions

Salar Cost

The salar cost consists of the operating costs incurred at the salar operation. It is built up from detailed costs described previously in this document and modeled as a fixed cost within the model. However, SRK notes that the fixed cost component is scaled by pumping volumes but is not directly a variable cost.


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Processing

Processing costs are operating costs incurred at the La Negra processing facility. These costs are modeled as fixed and variable costs within the model as discussed previously in this document. However, SRK notes that the fixed cost component is scaled by production volumes but is not directly a variable cost.

Key variable cost components were broken out separately as outlined in Table 19-6.

Table 19-6: Variable Processing Costs


Processing Costs	Units	Value
Soda Ash Consumption	t/t Li2CO3	2.27
Soda Ash Pricing	US$/tonne	274.00
Lime Consumption	t/t Li2CO3	0.21
Lime Pricing	US$/tonne	174.00
HCl Consumption	t/t Li2CO3	0.11
HCl Pricing	US$/tonne	270.00
Salar Lime Cost	US$/tonne	201.65

Source: SRK

Shipping and G&A

Shipping costs are variable and are captured at US$81.37/t of LCE produced.

G&A costs are developed from detailed costs and average roughly US$34.3M/year when the operation is at full run rate.

R&D payments to the government of Chile are included as fixed costs on schedule outlined in Table 19-7.

Table 19-7: R&D Costs


Year			US$
2021 (partial)			2,374,242
2022			11,603,135
2023			11,635,454
2024			11,668,257
2025			11,701,552
2026			11,735,347
2027			11,769,649
2028			11,804,465
2029			11,839,804
2030			11,875,672
2031			11,912,079
2032			11,949,031
2033			11,986,538
2034			12,024,068
2035			12,063,245
2036			12,102,469
2037			12,142,277
2038			12,182,683
2039			12,223,695
2040			12,265,322
2041			12,307,573
2042			12,350,458
2043			12,393,986

Source: Albemarle


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Capital Costs

As Salar de Atacama is an existing operation, no initial capital has been modeled. Sustaining capital is modeled on an annual basis and is used in the model as outlined in Section 18.1. Major projects associated with expansion or operational improvement include contingency, as noted in Section 18.1, other sustaining costs do not include contingency. Closure costs are modeled as sustaining capital and are captured as a onetime payment the year following cessation of operations. The modeled sustaining capital profile is presented in Figure 19-6.

Source: SRK

Figure 19-6: Sustaining Capital Profile (Tabular Data shown in Table 19-9)

19.1.4Results

The economic analysis metrics are prepared on annual after-tax basis in US$. The results of the analysis are presented in the table below. As modeled, at a Lithium Carbonate price of US$10,000/t, the NPV8% of the forecast after-tax free cash flow is US$2,478 million. Note that because Salar de Atacama is in operation and is modeled on a go-forward basis from the date of the reserve, historic capital expenditures are treated as sunk costs (i.e., not modeled) and therefore, IRR and payback period analysis are not relevant metrics.

Table 19-8: Indicative Economic Results


LoM Cash Flow (Unfinanced)	Units	Value
Total Revenue	US$	16,720,589,734
Total Opex	US$	(5,534,107,988)
Royalties	US$	(2,294,064,911)
Operating Margin	US$	8,892,416,835
Operating Margin Ratio	%	53%
Taxes Paid	US$	(2,394,685,717)
Free Cashflow	US$	4,977,836,374
Before Tax
Free Cash Flow	US$	7,372,522,091
NPV @ 8%	US$	3,027,458,930
NPV @ 10%	US$	2,518,956,354
NPV @ 15%	US$	1,679,104,360
After Tax
Free Cash Flow	US$	4,977,836,374
NPV @ 8%	US$	1,972,048,082
NPV @ 10%	US$	1,622,066,434
NPV @ 15%	US$	1,045,940,855

Source: SRK


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The economic results and back-up chart information within this section are presented on an annual basis in Table 19-9 Figure 19-7.


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Table 19‑9: Annual Cashflow


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Source: SRK

Figure 19-7: Annual Cashflow Summary (Tabular Data shown in Table 19-9)

19.2Sensitivity Analysis

SRK performed a sensitivity analysis to evaluate the relative sensitivity of the operation’s NPV to a number of key parameters (Figure 19-8). This is accomplished by flexing each parameter upwards and downwards by 10%. Within the constraints of this analysis, the operation appears to be most sensitive to commodity price, plant recovery and lithium grade. Note that the limited upside potential of plant recovery and grades is the result of limiting of plant production to a maximum of 84 ktpa of production in the processing facility.

Source: SRK

Figure 19-8: Relative Sensitivity Analysis


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another which may not be reflective of reality. Additionally, the amount of flex in the selected parameters may violate physical or environmental constraints present at the operation.


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20Adjacent Properties

20.1Adjacent Production

SQM is the other major producer of lithium and potassium in the Salar de Atacama (Figure 20-1, Figure 20-2 and Figure 20-3). SQM produces potassium chloride, potassium sulfate, magnesium chloride salts and lithium solutions that are then sent to SQM’s processing facilities at the Salar del Carmen, near Antofagasta.

SQM's facilities in the Salar de Atacama are located over the two currently authorized extraction areas, MOP and SOP, as shown in Figure 20-1. SQM’s production from the Salar de Atacama is important to Albemarle in multiple ways. The brine resource in SQM’s operations is connected Albemarle’s which means pumping activities from SQM’s concessions impacts brine characteristics and availability in Albemarle’s concessions. Further, the combined impact of SQM and Albemarle’s brine extraction on the overall salar (as well as water extraction for other uses) is evaluated for environmental and social purposes.


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Source: GWI, 2019

SQM, green polygon. Albemarle, red polygon.

Figure 20-1: Environmentally Authorized Brine Extraction Areas in the Salar de Atacama


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The brine extraction operation by SQM in the Salar de Atacama began in 1996. In 2006 SQM obtained its current Environmental Qualification Resolution (RCA N ° 226/2006) that allows it to increase the pumping of brine in stages up to 1700 L/s ending in the year 2030 (Figure 20-2), when the lease contract of the OMA concessions with CORFO expires.

Source: SQM, Idaea-CSIC, 2017

Figure 20-2: SQM's Brine Extraction Operational Rule

The actual or net extraction of brine by SQM is obtained by subtracting the direct and indirect reinjection flow from the total pumping (Figure 20-3).

Source: SQM, Idaea-CSIC, 2017

Figure 20-3: Historical Series of Net Brine Extraction by SQM


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The operational balance of Lithium in the Salar de Atacama by SQM is presented in Table 20-1.

Table 20-1: Operational Balance of Lithium in the Salar de Atacama by SQM


Item	1996-2017 Period	2018-2030 Period (Projected)	1996-2030 Total Period
Total Fresh Brine Extracted (Mm3)	737	779	1516
Total Lithium Extracted in Brine (Metallic Li Tons)	1,526,000	1,556,000	3,082,000
Lithium in Final Products (Metallic Li Tons)	115,000	315,800	430,800

Source: Leónidas Osses, 2019

20.1.1SQM Reserves

In the 20-F Report published by SQM for 2018, the estimates of base reserves of potassium, sulfate, lithium and boron in the Salar de Atacama are presented. SQM's mining exploitation concessions cover an area of 81,920 ha, geological exploration, brine sampling and geostatistical analyzes are carried out. SQM estimates that the proven and probable lithium reserves, as of December 31, 2018, in accordance with the cutoff grade (established at 0.05%), geological exploration, brine sampling and geostatistical analysis up to a depth 300 m within our exploitation concessions are shown in Table 20-2.

Table 20-2: SQM Lithium Reserves Estimates


	Proven Reserves	Probable Reserves	Total Reserves
	MMtons	MMtons	MMtons
Li metal	4.56	3.99	8.55

FORM 20-F: United States Securities and Exchange Commission. Washington, D.C. 20549. Annual Report corresponding to section 13 or 15 (d) of the Securities Exchange Law of 1934. For the year ended December 31, 2018. SQM S.A.

•The metric tons of lithium considered in the proven and probable reserves are shown before losses due to evaporation processes and metallurgical treatment. The recoveries of each ion depend on the composition of the brine, which changes over time and the process applied to produce the desired commercial products.

•Recoveries for lithium range from 28% to 40%.

To complement the information on reserves, SQM has an environmental qualification resolution (RCA 226/06) that defines a maximum extraction of brines until the end of the concession (December 31, 2030).

Considering the maximum authorized brine production rates, SQM has carried out hydrogeological simulations by means of numerical flow and transport models, to estimate the change in the volume and quality of the brine during the life of the project, considering the infrastructure of existing and projected wells. Based on these simulations, a total of 1.24 Mt of lithium and 14.9 Mt of potassium will be extracted from producing wells. On the other hand, the proven and probable in situ base reserve, within the authorized environmental extraction area (RCA N°226/2006), corresponds to 4.33 Mt of lithium and 30.4 Mt of potassium.

20.2Water Rights of Other Companies

Within the framework of the environmental evaluation of the Albemarle project "Modifications and Improvement of the Solar Evaporation Pools System in the Salar de Atacama", approved by RCA No. 021/2016, an analysis of the water rights in the Salar de Atacama basin shows a total of 300 water use rights constituted within the basin, including underground and surface rights, which total a flow of 5,107 L/s.


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Table 20-3 shows the average flows granted according to the nature of the water resource where the main exploitation comes from the underground resource (60%), leaving about 39% to the rights to use water of a superficial and current nature.

Table 20-3: Flows Granted According to the Nature of the Water


Nature of Water Resource	Total (lps)	Percent (%)
Groundwater	3,075.7	60.2
Surface and current	1,972.0	38.6
Surface and detained	60.0	1.2
General total	5107.7	100

Source: SGA, 2015

Figure 20-4 presents the flow data according to its supply source and its spatial distribution. It is observed that the main source that sustains the granted water use rights corresponds to the aquifer system, around the town of San Pedro de Atacama, as well as the Eastern Edge of the Salar nucleus and the southern end of the Basin. Regarding surface sources, the main rights are in the tributary rivers of the San Pedro and the Rio Vilama in the North sector of the Basin. Other surface sources, such as streams and slopes, are mainly concentrated throughout the eastern fringe of the Basin.


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Source: SGA, 2015

Figure 20-4: Spatial Distribution of Concessioned Water Rights in the Salar de Atacama Basin


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Granted water use rights are intended to be used in the following manner: it is observed that 53 files correspond to mining use with a total of 2,315 L/s, 24 to irrigation with a total of 1,572 L/s, one to industrial use with 8.5 L/s, 28 to other uses with 388.5 L/s, two to drinking/domestic use/sanitation with a total of 5.5 L/s and 47 records do not present information regarding this item (blank).

This distribution of the flows granted in the Salar del Atacama basin according to the use of the waters is shown in Table 20-4.

Table 20-4: Concessioned Water Rights by Water Use


Water Use	Total (lps)	Percent (%)
Domestic/Public/Sanitation	5.5	0.1
Industrial	8.5	0.2
Other	388.5	7.6
Agricultural	1,572.8	30.8
Mining	2,315.3	45.3
Not defined (blank)	817.1	16
General total	5,107.7	100

Source: SGA, 2015

The companies Minera Escondida (MEL), Minera Zaldívar (CMZ), SQM and Albemarle have rights to use water constituted in the brackish aquifer of the eastern and southern edge of the Salar, this data is reported to different authorities.

In the case of MEL and CMZ, the extraction of water in the south of the basin, both companies have a collaboration agreement that allows MEL to access the extraction information carried out by CMZ. MEL concentrates this activity in the Monturaqui sector and CMZ carries it out in the Negrillar sector. According to the information obtained from the DGA and after analyzing both the names of the applicants and the spatial location specified in the files, it was obtained that the water use rights granted in total identified for both companies are close to 1,720 L/s.

SQM, for its part, has rights to use water for a maximum flow of 450 L/s, which is distributed in 10 wells located on the eastern edge of the Salar. Of these rights, five have been recently granted, which is an increase in the authorized flow from 240 L/s to the 450 L/s. The data available indicates that current exploitation is very close to the total use of the flow granted to the five wells currently operating, which is 240 L/s. Of the new water use rights granted, there is no certainty of the start of their exploitation, and they are conditional on being granted the corresponding environmental authorization.


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21Other Relevant Data and Information

SRK is not aware of other relevant data and information that is not included elsewhere in this report.


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22Interpretation and Conclusions

22.1Geology and Resources

The property is well known in terms of descriptive factors and ownership. Geology and mineralization are well-understood through decades of active mining. The status of exploration, development, and operations is advanced and active. Assuming that exploration and mining continue at Salar de Atacama in the way that they are currently being done, there are no additional recommendations at this time.

Lithium concentration data from the brine sampling exploration data set was regularized to equal lengths, when possible, for constant sample volume (Compositing). Lithium grades were interpolated into a block model using OK and ID methods. Results were validated visually and via various statistical comparisons. The estimate was depleted for current production, categorized in a manner consistent with industry standards and statistical parameters. Mineral resources have been reported above a cutoff grade supporting reasonable potential for eventual economic extraction of the resource.

SRK has reported a mineral resource estimation which, in its opinion, is appropriate for public disclosure and accounts for long-term considerations of mining viability. The mineral resource estimation could be improved with additional infill program (drilling and brine sampling).

22.2Mining and Mineral Reserves

Mining operations have been established at the Salar de Atacama over its more than 35-year history of operation. Reserve estimates have been developed based on a predictive hydrogeological model that estimates brine production rates and associated lithium concentrations over time. In the QP’s opinion, the mining methods and predictive approach for reserve development are appropriate for the Salar de Atacama.

22.3Metallurgy and Mineral Processing


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SYIP performance and reduce risk in ramp up and performance. Nonetheless, in the QP’s opinion, the projected performance for the SYIP is reasonable.

SRK has assumed that a liming plant will be required starting in 2026 to offset a reduction in calcium-rich brine available for blending. If further optimization of the life of mine pumping plan is not possible (i.e., the sulfate to calcium ratio cannot be reduced by alternative pumping strategy), Albemarle will need to add calcium to the evaporation pond system to avoid additional lithium losses in the ponds. Albemarle should start conceptual evaluation of this calcium addition (whether through liming as assumed by SRK or alternative options) so that if / when this plant is required, Albemarle will have an appropriate design developed for installation.

22.4Infrastructure

22.5Environmental/Social/Closure

22.5.1Environmental Studies

Baseline studies, in both operational areas, have been developed since the first environmental studies for permitting were submitted; 1998 in La Negra, and 2000 at Salar de Atacama. With the ongoing monitoring programs in both locations, environmental studies, such as hydrogeology and biodiversity, are regularly updated.

22.5.2Environmental Management Planning

22.5.3Environmental Monitoring


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Notwithstanding the above, the Salar de Atacama is a complex system and requires constant updating of management tools based on the results of the monitoring programs, and also be attentive to requirements or new tools that the authority may incorporate.

22.5.4Permitting

Albemarle has the environmental permits for an operation with a brine extraction of 442 L/s, a production of 250,000 m3/year of brine concentrated in solar evaporation ponds with an approximate surface area of 1,043 ha, for a production of 94,000 t/y of LCE. Brine exploitation is authorized until 2043. Any modification of the production and/or extraction, or to any approved conditions, will require a new environmental permit.

22.5.5Closure

Albemarle has also an approved closure plan (Res. Ex. N°287/2019), which includes all environmental projects approved until 2016, including EIA “Modification and improvement solar evaporation system” (RCA N°021/2016). This closure plan considers a life of mine until 2043, estimated by the authority’s methodology, which is used for financial assurance purposes and it does not necessarily define the definitive closure date.

Albemarle does not currently have an internal closure cost estimate and the only cost estimate available for review was prepared for financial assurance purposes. Therefore, other costs such as head office costs, a number of human resource costs, taxes, fees and other operator-specific costs that are not included in the financial assurance cost estimate would likely be incurred by Albemarle during closure of the site. Therefore, the actual closure cost could be greater or less than the financial assurance estimate. Albemarle should prepare a detailed closure cost estimate that reflects owner-performed closure activities and that can be validated by clearly documenting sources and calculation methods used.

Due to new environmental approvals not included in the approved closure plan, Albemarle must update its closure plan in order to be able to operate some of these projects, as they require an approved closure plan prior to execution.

22.6Capital and Operating Costs

The capital and operating costs for the Salar de Atacama operation have been developed based on actual project costs. In the opinion of the QP, the cost development is acceptable for declaration of mineral reserves. However, the operation itself lacks detailed life of operation planning and costing. As such, the forward looking costs incorporated here are inherently strongly correlated to current market conditions. Due to the ongoing Covid-19 pandemic, the currently global economic environment can charitably be described as ‘somewhat chaotic’, and any forward looking forecast based on such an environment carries increased risk.


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22.7Economic Analysis

The Salar de Atacama operation is forecast to have a 24-year life with the first modeled year of operation being a partial year to align with the effective date of the reserves.

As modeled for this analysis, the operation is forecast to produce 1.7 Mt of technical grade lithium carbonate, on average, per year over its life. At a price of US$10,000/t technical grade lithium carbonate, the NPV @ 8% of the modeled after-tax cash flow is US$1,972 million.

The operation is expected to generate positive cashflow during every full year in which it is pumping or processing brine on the schedule and at the costs and process outlined in this report, supporting the economic viability of the reserve under the assumptions evaluated.

An economic sensitivity analysis indicates that the operation’s NPV is most sensitive to variations in commodity price, plant recovery and lithium grade.


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23Recommendations

23.1Recommended Work Programs

23.1.1Geology, Resources and Reserves

•Reconcile Drillhole Database: Data review and compilation efforts have identified multiple versions of corehole information that is similar but not exactly the same in several instances. Future modeling work should continue to work on reconciliation of hole names, hole aliases, and locations.

•Phased Re-Log of Coreholes: Drillholes within the concessions area (local model) were re-logged by ALB based on experience, inherent knowledge and available data including logs, core photos, etc. Drillholes outside of the concessions area do not have this background support and are limited to tabulated data extracted from previous reporting. SRK recommends developing a phased approach to re-logging coreholes outside of the concession area. Using similar codes as the local model, re-log 10 to 25 coreholes using this approach and identify if this method can be expanded to the remaining coreholes.

•Structural Model: There is extensive historic and modern data related to the structural conditions within the Atacama project. However, this data has not been compiled into a robust structural model that can be used on current and future modeling efforts and compilation of this structural model will potentially improve associated modelling.

•Field campaign in the aquifers within the claim area A3, focused on collecting K (hydraulic testing) and Sy values (through diamond drilling and core sampling) and brine samples.

•Sample collection campaign including depths from 100 m to 150 m in claim areas A1, A2, and A3.

•Sample collection campaign in the western of the salar. The target is to identify the grade of dilution of lithium, calcium and sulfate as results of the lateral recharge from southern sub-basins.

•Update of groundwater numerical model with the new collected information (Geology, hydrogeology and brine concentration), and update the predictions.

•Evaluate opportunity to maintain a lower ration of sulfate to calcium in the raw brine feed to the evaporation ponds for a longer period of time (i.e., increase proportion of calcium-rich brine pumped) with a target of improving process recovery and delaying or removing the need to develop a liming plant.

23.1.2Mineral Processing and Metallurgical Testing

•In SRK’s opinion, while the assumptions for the SYIP project are reasonable, there remains gaps in the supporting test data including questions on representivity of samples and reliability of mass balances. Therefore, SRK recommends another round of testwork with a focus on better quantifying the performance of the SYIP prior to start of full development activities.

•Based on the life of mine pumping plan developed by SRK, the ration of sulfate to calcium will reach a point in the future where sulfate cannot be adequate reduced which will result in additional lithium losses in the evaporation ponds. To mitigate the potential for these losses, SRK has assumed the addition of a liming plant, available for operations in 2026, to add calcium to the system. While it may be possible to modify the pumping plan to delay or


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eliminate the need for this calcium addition, given the currently projected requirement is approximately five years out, SRK recommends beginning conceptual studies on addition of this plant prior to transitioning to full characterization and development (if the production plan cannot be modified).

23.1.3Environmental/Closure

•Considering that the last hydrogeological model available for review and used in the assessment of impacts to water level and to the sensitive ecosystems of the area, was conducted in 2015 (and subsequent biannual updates), SRK recommends that this assessment be updated based on monitoring information available to date.

•SRK recommends developing an internal closure plan, where other costs could be determined, such as head office costs, human resources costs, taxes, operator-specific-costs, and social costs. Also, closure provision should be determined in this document. For the internal closure plan development, it is recommended to follow ICMM guidelines developed for this purpose (Integrated Mine Closure Good Practice Guide, 2nd Edition. ICMM, 2019).

23.2Recommended Work Program Costs

Table 23-1 summarizes the costs for recommended work programs.

Table 23-1: Summary of Costs for Recommended Work


Discipline	Program Description	Cost (US$)
Mineral Resource Estimates	Infilling Drilling Program to obtain brine and porosity samples over a two year period	4,000,000
Mineral Reserve Estimates	Update numerical groundwater model if additional drilling and sampling is completed	200,000
Processing and Recovery Methods	Updated SYIP testing, including mass balance and preliminary evaluation of liming plant.	300,000
Infrastructure	No work programs recommended – mature functioning project with required infrastructure in place, programs already included in operating budget.	0
Cost model	Continued development and refinement of a cost model in light of a fluid economic environment.	50,000
Closure	Update the closure plan to reflect the full life of mine plan. Prepare a detailed, internal closure cost estimate the reflects the owner-performed cost of closure.	130,000
Total US$		$4,680,000

Source: SRK, 2021


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24References

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Albemarle (2020). Informe de Seguimiento Ambiental. Monitoreo Mensual de Agua Subterránea y Superficial. Sector La Negra, Febrero 2020.

Albemarle (2020). Permisos Sectoriales La Negra. Excel spreadsheet, file Permisos_Sectoriales_09072020_La Negra, July 2020.

Albemarle (2020). Permisos Sectoriales Salar. Excel spreadsheet, file Permisos_Sectoriales_09072020_Salar, July 2020.

Albemarle (2020) Electronical comunications from Albermale to SRK during 2020. Water level and water quality database; pods historical operations database; pumping plan, recharge estimates and others input for the groundwater model.

Albemarle (2020). Plan de Seguimiento Ambiental Hídrico. Informe Anual Nº4. Periodo Enero – Diciembre 2019. Two Volumes, 15 apéndices, March 2020.

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Albemarle (2019). SYIP Decision Support Package Define to Execute Gate, Full Investment Decision. Presentation. February 2019.

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Centro de Ecología Aplicada (2015). Plan de Manejo Biotico. Prepared for Rockwood Lithium, December 2015.

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ESI, (2017). Guide to using Groundwater Vistas, version 7, code documentation report. Reinholds, PA: Environmental Simulations, Inc.

Foote Mineral Company (1979). Recovery of Lithium from The Salar de Atacama. October 1979.

Geodatos (2017). Estudio geofísico de resistividad métodos TEM y nanoTEM, sector sur Salar de Atacama. Región de Antofagasta, Chile. Prepared for Albemarle.

Gestión Ambiental Consultores (2009). Estudio de Impacto Ambiental Modificaciones y Mejoramiento del Sistema de Pozas de Evaporación Solar en el Salar de Atacama. Prepared for Sociedad Chilena de Litio Ltda. May 2009. Approved by RCA Nº21/2016. Available online at: https://seia.sea.gob.cl/expediente/expedientesEvaluacion.php?modo=ficha&id_expediente=3788682.

González, G.; Cembrano, J.; Shyu, J.B.H. (2009). Coeval compressional deformation and volcanism in the central Andes, case studies from northern Chile (23°S-24°S). Tectonics 28. doi:10.1029/2009TC002538.

GWI (2019) Informe Técnico de Recursos y Reservas de Litio en la concesión minera de Albemarle en el Salar de Atacama, Chile. August 2019.

Hatch (2019). Capex Estimate.

Houston, J. (2009). A recharge model for high altitude, arid, Andean aquifers. Hydrol. Process. 23 (16), 2383–2393. http://dx.doi.org/10.1002/hyp.7350.

HydroGeoLogic, Inc., 2011, MODFHMS/MODFLOW-SURFACT, A Comprehensive MODFLOW-Based Hydrologic Modeling System, HydroGeoLogic, Inc., Reston, Virginia, 1307 p.

HydroSOLVE, Inc., 2008. AQTESOLV for Windows: HydroSOLVE, Inc., Reston, Virginia, version 4.5.

Jordan, T.E.; Munoz, N.; Hein, M.; Lowenstein, T.; Godfrey, L.; Yu, J. (2002a). Active faulting and folding without topographic expression in an evaporite basin, Chile. Bull. Geol. Soc. Am. 114 (11), 1406–1421. http://dx.doi.org/10.1130/0016- 7606(2002)114<1406:AFAFWT>2.0.CO;2.

Jordan, T.E.; Nester, P.L.; Blanco, N.; Hoke, G.D.; Dávila, F.; Tomlinson, A.J. (2010). Uplift of the Altiplano-Puna plateau: a view from the west. Tectonics 29 (5). http://dx.doi.org/10.1029/2010TC002661.

Kunasz, I.A. & Bell R.R. (1979). Salar de Atacama – Lithium Reserves High Calcium Brine Exploration Report. Prepared for Foote Mineral Company.

K-UTEC (2017). Scoping Study for Improvement of Albemarle’s Salar Operation for Production of MOP and Li-Brine at Salar de Atacama, Chile. Prepared for Albemarle Germany. September 2017.


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K-UTEC (2017). Scoping Study for Improvement of Albemarle’s Salar Operation for Production of MOP and Li-Brine at Salar de Atacama, Chile. Appendix 1.1: Laboratory Report Preliminary. Prepared for Albemarle Germany. September 2017.

K-UTEC (2017). Scoping Study for Improvement of Albemarle’s Salar Operation for Production of MOP and Li-Brine at Salar de Atacama, Chile. Appendix 1.2: Pilot Scale Work Report Preliminary. Prepared for Albemarle Germany. September 2017.

Lameli, C.H. (2011). Informe Final Estudio Hidrogeológico Proyecto “Planta de Sulfato de Cobre Pentahidratado”. pp. 0–33.

Lin, Y.S. ; Chuang, YiR. ; Liou, YaH. (2016). Structural characteristics of an active fold-and-thrust system in the southeastern Atacama Basin, northern Chile. Tectonophysics 685, 44–59. doi:10.1016/j.tecto.2016.07.015.

Maptek Pty Ltd., 2019. 3D Mine Design and Planning Toolset, Vulcan Envisage Version 11.0.4, Denver, Colorado, USA.

Munk, L.A.; Boutt, D.F.; Corenthal, L.; Huff, H.A.; Hynek, S.A. (2014). Paleoenvironmental records from newly recovered sediment cores at the southeast margin of the Salar de Atacama, Chile. In: Abstract PP23C-1408 Presented at 2014 Fall Meeting, AGU, San Francisco, Calif., 15–19 Dec.

Munk, L.A; Boutt, D.F; Hynek, S.A.; Moran, B.J., 2018. “Hydrogeochemical fluxes and processes contributing to the formation of lithium-enriched brines in a hyper-arid continental basin”.. Chemical Geology, Vol. 493, p. 37-57.

Niemeyer R., Hans ; SERNAGEOMIN. Geología del área Cerro Lila - Peine, región de Antofagasta, Escala 1:100.000 [monografías]. Santiago : SERNAGEOMIN, 2013. 37 p.: 1 mapa pleg. (Carta Geológica de Chile, Serie Geología Basica : n.147)

Ramirez, C. & Gardeweg, M. (1982). Hoja Toconao, Región de Antofagasta. Carta Geológica de Chile. Servicio Nacional de Geología y Minería de Chile. 54 (p.122).

Reutter, K.J.; Charrier, R.; Gotze, H.J.; Schurr, B.; Wigger, P.; Scheuber, E.; Belmonte- Pool, A. (2006). The Salar de Atacama Basin: A Subsiding Block Within the Western Edge of the Altiplano-Puna Plateau. Active Subduction Orogeny, Andes, pp. 303–325.

SGA Ambiental (2016). Declaración de Impacto Ambiental Proyecto Ampliación Planta La Negra – Fase 3. Prepared for Rockwood Lithium. Submitted to the Chilean Environmental Impact Assessment System. November 2016. Approved by RCA Nº279/16. Available online at: https://seia.sea.gob.cl/expediente/expedientesEvaluacion.php?modo=ficha&id_expediente=2131946967.

SGA (2018). Declaración de Impacto Ambiental Modificación Proyecto Ampliación Planta La Negra – Fase 3. Submitted to the Chilean Environmental Impact Assessment System. June 2018. Approved by RCA Nº077/19. Available online at: https://seia.sea.gob.cl/expediente/expedientesEvaluacion.php?modo=ficha&id_expediente=2140672714.

SGA (2015). Estudio Hidrogeológico y Modelo Numérico Sector Sur del Salar de Atacama. Prepared for Rockwood Lithium, December 2015.


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SGA (2015). Plan de Seguimiento Ambiental y Plan de Alerta Temprana de los Recursos Hídricos. Prepared for Rockwood Lithium, December 2015.

SGA (2019) Primera Actualización Del Modelo De Flujo De Agua Subterránea En El Salar De Atacama Según Rca 21/2016. Prepared for Albermale, March 2019.

SQM, 2020 PROYECTO ACTUALIZACIÓN PLAN DE ALERTA TEMPRANA Y SEGUIMIENTO AMBIENTAL, SALAR DE ATACAMA. April 2020.

Suez (2019). Informe de resultados de ensayos packer en pozos del Salar de Atacama. Prepared for Albemarle.

Vai, 2021. Complemento a la Segunda Actualización del modelo de Flujo de Agua Subterránea en el Salar de Atacama RCA 21/2016. Prepared for Albermale, Junio 2021.

Waterloo Hydrogeologic, 2016. AquiferTest Pro, An Easy-to-Use Pumping Test and Slug Test Data Analysis Package.

Wealth Minerals, 2017. 43-101 Technical Report on the Atacama Lithium Project El Loa Province Region II Republic of Chile.

Wellfield Services Ltda. (2019). Proyecto sísmico Salar de Atacama – 2d. Informe final de operaciones, noviembre 2018 - febrero 2019. Prepared for Albemarle.


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25Reliance on Information Provided by the Registrant

The Consultant’s opinion contained herein is based on information provided to the Consultants by Albemarle throughout the course of the investigations. Table 25-1 of this section of the Technical Report Summary will:

(i) Identify the categories of information provided by the registrant;

(iii) Disclose why the qualified person considers it reasonable to rely upon the registrant for any of the information specified in Subpart 1302 (f)(1).

Table 25-1: Reliance on Information Provided by the Registrant


Category	Report Item/Portion	Portion of Technical Report Summary	Disclose why the Qualified Person considers it reasonable to rely upon the registrant
Legal Opinion	Sub-sections 3.1, and 3.2	Section 3	Albemarle has provided a document summarizing the legal access and rights associated with leased surface and mineral rights. This documentation was reviewed by Albemarle’s legal representatives. The Qualified Person is not qualified to offer a legal perspective on Albemarle’s surface and title rights but has summarized this document and had Albemarle personnel review and confirm statements contained therein.
Discount Rates	19.1.1	19 Economic Analysis	Albemarle provided discount rates based on the company’s Weighted Average Cost of Capital (WACC). While this discount rate is higher than what SRK typically applied to mining projects (ranging from 5% to 12% dependent upon commodity), SRK ultimately views the higher discount rate as a more conservative approach to project valuation.
Tax rates and government royalties	19.1.2	19 Economic Analysis	SRK was provided with tax rates and government royalties for application within the model. These rates are in line with SRK’s understanding of the tax regime at the project location.
Exchange Rate	18.1 18.2 19.1.1 19.1.2 19.1.4	19 Economic Analysis and 18 Operating and Capital Costs	Information was received from Albemarle in USD. As the operation is located in Chile, Costs will be incurred in Chilean Pesos. SRK has accepted the USD basis from Albemarle. This should be modeled explicitly in future iterations.
Remaining Quota	3.2	Property Description	Albemarle provided SRK with the authorized quota in lithium metal remaining as of August, 31, 2021
Material Contracts	16.3	Contracts	Albemarle provided summary information regarding material contracts for disclosure. SRK does not have legal expertise to evaluate these contracts or their materiality and has relied upon Albemarle for this reason.


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Signature Page

This report titled “SEC Technical Report Summary, Pre-Feasibility Study, Salar de Atacama, Region II, Chile" with an effective date of August 31, 2021, was prepared and signed by:

SRK Consulting (U.S.) Inc. (Signed) SRK Consulting (U.S.) Inc.

Dated at Denver, Colorado

December 16, 2022


December 2022

Exhibit 96.4


SEC Technical Report Summary Pre-Feasibility Study Silver Peak Lithium Operation Nevada, USA Effective Date: June 30, 2021 Report Date: September 30, 2021 Amended Date: December 16, 2022
Report Prepared for Albemarle Corporation 4350 Congress Street Suite 700 Charlotte, North Carolina 28209
Report Prepared by SRK Consulting (U.S.), Inc. 1125 Seventeenth Street, Suite 600 Denver, CO 80202 SRK Project Number: 515800.040

SRK Consulting (U.S.), Inc.


SEC Technical Report Summary – Silver Peak			Page ii

Table of Contents


1 Executive Summary			1
1.1 Property Description			1
1.2 Geology and Mineralization			1
1.3 Status of Exploration, Development and Operations			2
1.4 Mineral Resource			2
1.5 Mining Methods and Mineral Reserve Estimates			1
1.6 Mineral Processing and Metallurgical Testing			3
1.7 Infrastructure			4
1.8 Environmental Permitting, Social, and Closure			4
1.9 Summary Capital and Operating Cost Estimates			7
1.10 Economics			8
1.11 Conclusions and Recommendations			11
1.11.1 Geology			11
1.11.2 Mineral Resource Estimates			11
1.11.3 Mining Methods and Mineral Reserve Estimates			11
1.11.4 Mineral Processing and Metallurgical Testing			11
1.11.5 Infrastructure			12
1.11.6 Environmental, Permitting, Social, and Closure			12
1.11.7 Economics			12
2 Introduction			13
2.1 Terms of Reference and Purpose			13
2.2 Sources of Information			13
2.3 Details of Inspection			13
2.4 Report Version Update			14
2.5 Qualified Person			14
3 Property Description			15
3.1 Property Location			15
3.2 Mineral Title			17
3.3 Encumbrances			31
3.4 Royalties or Similar Interest			31
3.5 Other Significant Factors and Risks			32
4 Accessibility, Climate, Local Resources, Infrastructure and Physiography			34
4.1 Topography, Elevation and Vegetation			34
4.2 Means of Access			34
4.3 Climate and Length of Operating Season			34
4.4 Infrastructure Availability and Sources			35
5 History			36
5.1 Previous Operations			36


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5.2 Exploration and Development of Previous Owners or Operators			37
6 Geological Setting, Mineralization, and Deposit			38
6.1 Regional Geology			38
6.2 Local and Property Geology			41
6.2.1 Geology of Basin Infill			43
6.3 Mineral Deposit			46
7 Exploration			49
7.1 Exploration Work (Other Than Drilling)			49
7.1.1 Significant Results and Interpretation			49
7.2 Exploration Drilling			49
7.2.1 Drilling Type and Extent			50
7.2.2 Sampling			56
7.2.3 Drilling, Sampling, or Recovery Factors			57
7.2.4 Drilling Results and Interpretation			57
7.3 Hydrogeology			58
8 Sample Preparation, Analysis and Security			60
8.1 Sample Collection			60
8.2 Sample Preparation, Assaying and Analytical Procedures			60
8.3 Quality Control Procedures/Quality Assurance			61
8.3.1 Historical Samples – On-Site Laboratory			61
8.3.2 2017 EXP Campaign – SGS Laboratory			62
8.3.3 2020 Sampling – ALS Laboratory			63
8.4 Opinion on Adequacy			63
9 Data Verification			64
9.1 Data Verification Procedures			64
9.2 Limitations			66
9.3 Opinion on Data Adequacy			66
10 Mineral Processing and Metallurgical Testing			67
11 Mineral Resource Estimates			68
11.1 Key Assumptions, Parameters, and Methods Used			68
11.1.1 Geological Model			68
11.1.2 Exploratory Data Analysis			72
11.1.3 Drainable Porosity			75
11.2 Mineral Resources Estimate			75
11.2.1 Compositing and Capping			75
11.2.2 Spatial Continuity Analysis			76
11.3 Neighborhood Analysis			77
11.3.1 Block Model			79
11.3.2 Estimation Methodology			80


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11.3.3 De-Clustering			83
11.3.4 Estimate Validation			84
11.4 Cut-Off Grades Estimates			88
11.5 Resource Classification and Criteria			88
11.6 Uncertainty			89
11.7 Summary Mineral Resources			90
11.8 Recommendations and QP Opinion on Mineral Resource Estimate			93
12 Mineral Reserve Estimates			94
12.1 Key Assumptions, Parameters, and Methods Used			94
12.1.1 Numerical Model Construction			94
12.1.2 Numerical Model Grid and Boundary Conditions			94
12.1.3 Hydrogeologic Units and Aquifer Parameters			96
12.1.4 Simulated Pre-Development Conditions			96
12.1.5 Simulated Historical Development			97
12.2 Mineral Reserves Estimates			107
12.2.1 Model Simulation to Reserve Estimate			108
12.2.2 Cut-Off Grade Estimate			109
12.2.3 Reserves Classification and Criteria			110
12.2.4 Reserve Uncertainty			110
12.3 Summary Mineral Reserves			112
13 Mining Methods			115
13.1 Wellfield Design			115
13.2 Production Schedule			119
14 Processing and Recovery Methods			121
14.1 Evaporation Pond System			123
14.2 Lithium Carbonate Plant			125
14.3 Pond System and Plant Performance			127
14.4 Requirements for Energy, Water, Process Materials, and Personnel			128
14.5 SRK Opinion			128
15 Infrastructure			129
15.1 Access, Roads, and Local Communities			129
15.1.1 Access			129
15.1.2 Airport			130
15.1.3 Rail			130
15.1.4 Port Facilities			130
15.1.5 Local Communities			130
15.2 Facilities			131
15.3 Evaporation Ponds			134
15.4 Harvested Salt Storage Areas			134
15.5 Energy			134


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15.5.1 Power			134
15.5.2 Propane			135
15.5.3 Diesel			135
15.5.4 Gasoline			136
15.6 Water and Pipelines			136
16 Market Studies			137
16.1 Market Information			137
16.1.1 Lithium Market Introduction			137
16.1.2 Lithium Demand			138
16.1.3 Lithium Supply			141
16.1.4 Pricing Forecast			142
16.2 Product Sales			144
16.3 Contracts and Status			145
17 Environmental, Permitting and Social Factors			146
17.1 Environmental Studies			146
17.1.1 Air Quality			147
17.1.2 Site Hydrology/Hydrogeology and Background Groundwater Quality			147
17.1.3 General Wildlife			148
17.1.4 Avian Wildlife			148
17.1.5 Botanical Inventories			149
17.1.6 Cultural Inventories			149
17.1.7 Known Environmental Issues			149
17.2 Environmental Management Planning			149
17.2.1 Waste Management			150
17.2.2 Tailings Disposal			150
17.2.3 Site Monitoring			151
17.2.4 Human Health and Safety			151
17.3 Project Permitting			151
17.3.1 Active Permits			151
17.3.2 Current and Anticipated Permitting Activities			154
17.3.3 Performance or Reclamation Bonding			154
17.4 Mine Reclamation and Closure			155
17.4.1 Closure Planning			155
17.4.2 Closure Cost Estimate			156
17.4.3 Limitations on the Closure Cost Estimate			158
17.5 Plan Adequacy			158
17.6 Local Procurement			158
18 Capital and Operating Costs			159
18.1 Capital and Operating Cost Estimates			159


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18.2 Capital Cost Estimates			159
18.3 Operating Cost Estimates			161
19 Economic Analysis			165
19.1 General Description			165
19.1.1 Basic Model Parameters			165
19.1.2 External Factors			166
19.1.3 Technical Factors			166
19.2 Results			170
19.3 Sensitivity Analysis			173
20 Adjacent Properties			174
20.1 Pure Energy Minerals			174
21 Other Relevant Data and Information			176
22 Interpretation and Conclusions			177
22.1 Geology and Mineral Resources			177
22.2 Reserves and Mine Plan			177
22.3 Metallurgy and Mineral Processing			177
22.4 Infrastructure			178
22.5 Environmental, Permitting, Social and Closure			178
22.6 Economics			179
23 Recommendations			180
23.1 Recommended Work Programs			180
23.2 Recommended Work Program Costs			180
24 References			182
25 Reliance on Information Provided by the Registrant			185
Signature Page			186


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List of Tables


Table 1.1: Silver Peak Mineral Resource Estimate, Exclusive of Mineral Reserves (Effective June 30,2021)			1
Table 1.2: Silver Peak Mineral Resource Estimate, Inclusive of Mineral Reserves (Effective June 30,2021)			2
Table 1.3: Silver Peak Mineral Reserves, Effective June 30, 2021			4
Table 1.4: Capital Cost Forecast ($M Real 2020)			9
Table 1.5: Indicative Economic Results			10
Table 2.1: Site Visits			14
Table 3.1: Unpatented Placer and Millsite Claims			19
Table 3.2: Mill Site Patented Claims			21
Table 3.3: Wellfield Patented Claims			21
Table 3.4: Nevada Net Proceeds Tax Sliding Scale			31
Table 7.1: Drill Campaign Summary			50
Table 7.2: Production Well Target Aquifers			50
Table 7.3: New 2020 Production Wells			54
Table 7.4: Summary of Pumping Tests at Silver Peak			58
Table 7.5: Summary of Literature Review of Specific Yield			59
Table 9.1: Sample Preparation Protocol by ALS			65
Table 9.2: ALS Primary Laboratory Analysis Methods			65
Table 11.1: Comparison of Raw vs Composite Statistics			76
Table 11.2: Modeled Omnidirectional Semi-Variogram for Lithium			77
Table 11.3: Summary Search Neighborhood Parameters for Lithium			78
Table 11.4: Summary Silver Peak Block Model Parameters			79
Table 11.5: Summary of Validation Statistics Composites Versus Estimation Methods (Aquifer Data)			86
Table 11.6: Silver Peak Mineral Resource Estimate, Exclusive of Mineral Reserves (Effective June 30, 2021)			91
Table 11.7: Silver Peak Mineral Resource Estimate, Inclusive of Mineral Reserves (Effective June 30, 2021)			92
Table 12.1: Model Layering			94
Table 12.2: Hydrogeologic Units and Aquifer Parameters			96
Table 12.3: Basin Inflows			97
Table 12.4: Simulated Groundwater Budget, Pre-Development			97
Table 12.5: Simulated Groundwater Budget, End of 2019			99
Table 12.6: Silver Peak Mineral Reserves, Effective June 30, 2021			114
Table 13.1: Wellfield Expansion Schedule (30-Year Reserve Pumping Plan)			116
Table 15.1: Local Communities			131
Table 15.2: Silver Peak Power Consumption			134
Table 16.1: Technical Grade Lithium Carbonate Specifications			144
Table 16.2: Historic Silver Peak Annual Production Rate (Metric Tonnes)			144
Table 17.1: SPLO Project Permits			152
Table 18.1: Silver Peak Capital Expenditure (Nominal US$M for 2015-2019, Real 2020 US$M for 2020/2021)			159


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Table 18.2: Pond 12S and 12N Salt Harvest Expenditure Forecast			161
Table 18.3: Capital Cost Forecast ($M Real 2020)			161
Table 18.4: Operating Costs ($M, Nominal for 2015-19, Real 2020 for 2020/2021)			162
Table 18.5: Operating Cost Model Calibration Results ($M, Real 2020)			163
Table 19.1: Basic Model Parameters			165
Table 19.2: Modeled Life of Operation Pumping Profile			167
Table 19.3: Life of Operation Processing Summary			168
Table 19.4: Operating Cost Summary			168
Table 19.5: Variable Processing Costs			170
Table 19.6: Indicative Economic Results			171
Table 19.7: Silver Peak Annual Cashflow and Key Project Data			172
Table 23.1: Summary of Costs for Recommended Work			181
Table 25.1: Reliance on Information Provided by the Registrant			185

List of Figures


Figure 1 -1: Total Forecast Operating Expenditure (Tabular Data shown in Table 19-7)			9
Figure 1 -2: Annual Cashflow Summary (Tabular Data shown in Table 19-7)			11
Figure 3 -1: Regional Location Map – Silver Peak, Nevada			16
Figure 3 -2: Albemarle Claims – Silver Peak			18
Figure 6 -1: Configuration of the Basin and Range Province and the Walker Lane Fault Zone, Relative to the Nevada Border			39
Figure 6 -2: Generalized Geology of the Silver Peak Area			40
Figure 6 -3: Major Physiographic Features that Form Clayton Valley			42
Figure 6 -4: Stratigraphic Column for the Silver Peak Site			44
Figure 6 -5 : Cross-Sections through the Silver Peak Property (W-E and SW-NE)			48
Figure 7 -1: Property Plan Drill Map			51
Figure 7 -2: Location of 2017 Exploration Boreholes for the SPLO			53
Figure 7 -3: New 2020 Production Wells			55
Figure 7 -4: Lithium Concentrations from Historical Production Well Samples			56
Figure 7 -5: 2020 Sampling Locations			57
Figure 8 -1: Comparison of Duplicates Results – 2017 EXP Drilling Campaign			62
Figure 9 -1: Comparison of Historical Lithium Concentrations, SPLO Lab to EPA WET Lab			64
Figure 9 -2: Comparison of Lithium Concentrations, August 2020			66
Figure 11 -1: Structural Setting - Silver Peak			70
Figure 11 -2: Geological Model Domain			71
Figure 11 -3: Geological Cross Section SW - NE			72
Figure 11 -4: Geological Cross Section W–E and SW-NE			72
Figure 11 -5: Drill Hole Locations in Plan View (top) and Lithium Samples in Sectional View A-A’ (bottom)			73
Figure 11 -6: Summary Raw Sample Statistics of Lithium Concentration – mg/l, Log Probability and Histogram			74
Figure 11 -7: Histogram of Length of Samples of Lithium (mg/l)			76
Figure 11 -8: Experimental and Modeled Omnidirectional Semi-Variogram for Lithium			77


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Figure 11 -9: Neighborhood Analysis on Number of Samples for Lithium			78
Figure 11 -10: Outputs from the Block Size Optimization Analysis			79
Figure 11 -11: Plan View of the Silver Peak Block Model Colored by Hydrogeological Unit (1,125 masl Elevation)			80
Figure 11 -12: Histogram of Number of Drill Holes Used to Estimate the Block Model			81
Figure 11 -13: Histogram of Number of Composites Used to Estimate the Block Model			82
Figure 11 -14: Histogram of Average Distance from Blocks to Composites Used in Estimation			83
Figure 11 -15: De-Clustering Analysis Showing Scatter Plot of Cell Size Versus Lithium Mean			84
Figure 11 -16: Example of Visual Validation of Lithium Grades in Composites Versus Block Model in Plan View (1,125 masl Elevation)			85
Figure 11 -17: Lithium (mg/l) - Swath Analysis for Silver Peak			87
Figure 11 -18: Block Model Colored by Classification and Drillhole Locations Plan View (1,125 masl Elevation)			89
Figure 12 -1: Active Model Domain and Model Grid			95
Figure 12 -2: Wellfield Pumping and Average Lithium Concentration			98
Figure 12 -3: Water Level Recovery during 2009 Shutdown, Simulated Versus Measured			100
Figure 12 -4: Annual Mass of Lithium Extracted by Production Wellfield, Simulated Versus Measured			101
Figure 12 -5: Lithium Concentration Versus Cumulative Production Pumping, Simulated Versus Measured			102
Figure 12 -6: Mass Extraction Rate at the End of 2019, Simulated Versus Measured			103
Figure 12 -7: Sensitivity of Simulated Wellfield Lithium Concentration to Varying Specific Yield			105
Figure 12 -8: Sensitivity of Simulated Wellfield Lithium Concentration to Varying Horizontal Hydraulic Conductivity			106
Figure 12 -9: Sensitivity of Simulated Wellfield Lithium Concentration to Varying Vertical Hydraulic Conductivity			107
Figure 12 -11: Projected Annual Mass of Lithium Extracted by Production Wellfield			108
Figure 12 -12: Sensitivity of Projected Wellfield Lithium Concentration to Varying Select Parameters			111
Figure 13 -1: Well Location Map for Predicted Life of Mine			117
Figure 13 -2: Brine Extraction Well at Silver Peak			118
Figure 13 -3: Typical Production Well Construction			119
Figure 13 -4: Planned Pumping for Life of Mine			120
Figure 14 -1: Silver Peak Simplified Process Flowsheet and Mass Balance			122
Figure 14 -2: Brine Flow Path in Pond System			124
Figure 14 -3: Silver Peak Lithium Carbonate Plant			126
Figure 14 -4: Salar Yield versus Wellfield Li Input			127
Figure 15 -1: Silver Peak General Location			130
Figure 15 -2: Infrastructure Layout Map			132
Figure 15 -3: Plant Layout Map			133


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Figure 15 -4: NV Energy Regional Transmission System			135
Figure 16 -1: Global Electric Vehicle Lithium Demand			138
Figure 16 -2: Historic Lithium Prices (Lithium Carbonate/Hydroxide)			143
Figure 16 -3 : Supply/Demand Scenarios (2016 to 20 23 )			143
Figure 18 -1: Total Forecast Operating Expenditure (Tabular Data shown in Table 19-7)			164
Figure 19 -1: Silver Peak Pumping Profile (Tabular Data shown in Table 19-7)			166
Figure 19 -2: Modeled Processing Profile (Tabular Data shown in Table 19-7)			167
Figure 19 -3: Modeled Production Profile (Tabular Data shown in Table 19-7)			168
Figure 19 -4: Life of Operation Operating Cost Summary (Tabular Data shown in Table 19-7)			169
Figure 19 -5: Life of Operation Operating Cost Contributions			169
Figure 19 -6: Silver Peak Sustaining Capital Profile (Tabular Data shown in Table 19-7)			170
Figure 19 -7: Annual Cashflow Summary (Tabular Data shown in Table 19-7)			173
Figure 19 -8: Silver Peak NPV Sensitivity Analysis			173
Figure 20 -1: Map of Claims Controlled by Pure Energy Minerals			175


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List of Abbreviations

The metric system has been used throughout this report. Tonnes are metric of 1,000 kg, or 2,204.6 lb. All currency is in U.S. dollars (US$) unless otherwise stated.


Abbreviation			Definition
°F			degrees Fahrenheit
3D			three dimensional
AFA			acre feet per annum
Albemarle			Albemarle Corporation
AOC			Administrative Order on Consent
APP			Avian Protection Program
BAPC			Bureau of Air Pollution Control
BAQP			Bureau of Air Quality Planning
BEV			battery electric vehicle
BLM			bureau of land management
BNEF			Bloomberg New Energy Finance
CAD			computer aided drafting
CBST			clear brine surge tank
CERCLA			Comprehensive Environmental Response, Compensation, and Liability Act
CFR			Code of Federal Regulations
cm			centimeters
CoG			cut off grade
DOE			U.S. Department of Energy
EA			Environmental Assessment
EMS			Fire/Emergency Medical Services
EPA			Environmental Protection Agency
ERP			Emergency Response Plan
ESCO			Esmeralda County Public Works
FPPC			Final Plans for Permanent Closure
ft			foot/feet
FWS			Fish and Wildlife Service
GIS			geographic information system
gpm			gallons per minute
HEV			hybrid electric vehicle
hp			horsepower
ICE			internal combustion engine
ID2			Inverse Distance weighting
KE			kriging efficiency
km2			square kilometers
kV			kilovolt
KWh			kilowatts per hour
LAS			Lower Ash System
LCE			lithium carbonate equivalent
LGA			Lower Gravel Aquifer
Li			lithium
LiCl			lithium chloride
LiOH			lithium hydroxide
LoM			life of mine
m			meters
m3/yr			cubic meters per year


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MAA			Main Ash Aquifer
masl			meters above sea level
mg/L			milligrams per liter
MGA			Marginal Gravel Aquifer
mi			miles
mi2			square miles
MRE			Mineral Resource Estimation
MWh			megawatts per hour
NAC			Nevada Administrative Code
NDEP			Nevada Division of Environmental Protection
NDOW			Nevada Department of Wildlife
NDWR			Nevada Division of Water Resources
NEPA			National Environmental Policy Act
NN			nearest neighbor
NRS			Nevada Revised Statutes
OK			Ordinary Kriging
PCS			Petroleum Contaminated Soil
PFS			Pre-feasibility Study
ppm			parts per million
QA/QC			Quality Assurance/Quality Control
R&PP			Recreation and Public Purposes
RC			reverse circulation
RCE			Reclamation Cost Estimate
RCRA			Resource Conservation and Recovery Act
RCRA			Resource Conservation and Recovery Act
SAS			Salt Aquifer System
SEC			Securities and Exchange Commission
SEC			SRK Consulting (U.S.), Inc.
SOR			slope or regression value
SPLO			Silver Peak Lithium Operations
SRCE			Standardized Reclamation Cost Estimator
SUV			sport utility vehicles
SWReGAP			Southwestern Regional Gap Analysis Program
Sy			specific yield
t			tons
TAS			Tufa Aquifer System
TCLP			Toxicity Characteristic Leaching Procedure
TDS			Total Dissolved Solids
TPPC			Tentative Plans for Permanent Closure
VSQG			very small quantity generator
WPCP			Water Pollution Control Permit


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1Executive Summary

1.1Property Description

The Silver Peak Lithium Operation (SPLO) is in a rural area approximately 30 miles (mi) southwest of Tonopah, in Esmeralda County, Nevada, United States. It is located in Clayton Valley, an arid valley historically covered with dry lake beds (playas). The operation borders the small unincorporated town of Silver Peak, NV. Albemarle extracts lithium-rich brine from the playa at the SPLO to produce lithium carbonate.

Albemarle holds four types of claims in the Silver Peak area: Millsite Claims, Patented Claims, Unpatented Claims, and Unpatented Junior Claims.

Albemarle’s mineral rights in Silver Peak, Nevada consist exclusively of its right to extract lithium brine, pursuant to a settlement agreement with the U.S. government, originally entered into in June 1991 by one of its predecessors. Pursuant to this agreement, Albemarle has rights to all of the lithium that can be removed economically. Albemarle or their predecessors have been operating at the Silver Peak site since 1966. The SPLO site covers a surface of approximately 15,301 acres, 10,826 acres of which are patented mining claims owned through a subsidiary. The remaining acres are unpatented mining claims for which claim maintenance fees are paid annually. In connection with the operations at Silver Peak, Albemarle has been granted by the Nevada Division of Water Resources rights to pump water in the Clayton Wash Basin area.

1.2Geology and Mineralization

The Silver Peak Lithium Operation is located in Clayton Valley. The structural geology that forms Clayton Valley, and principal faults within and around the valley, are influenced by two continental-scale features:

•The Basin and Range province

•Walker Lane fault zone

The valley is located within the Basin and Range province, which extends from Canada through much of the western United States and across much of Mexico. The Province is characterized by block faulting caused by extension and subsequent thinning of the earth’s crust. In Nevada, this extensional faulting forms a region of northeast-southwest oriented ridges and valleys. This faulting is responsible for the overall horst and graben structure of Clayton Valley.


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It is hypothesized that the current levels of lithium dissolved in brine originate from relatively recent dissolution of halite by meteoric waters that have penetrated the playa in the last 10,000 years. The halite formed in the playa during the aforementioned climatic periods of low precipitation and that the concentrated lithium was incorporated as liquid inclusions into the halite crystals.

The lithium resource is hosted as a solute in a predominantly sodium chloride brine. As such, the term ‘mineralization’ is not wholly relevant, as the brine is mobile and can be affected by pumping of groundwater and by local hydrogeological variations (e.g., localized freshwater lenses in near-surface gravel deposits being affected by rainfall, etc.).

1.3Status of Exploration, Development and Operations

The primary mechanism of exploration on the property has been drilling, mainly production wells, for the past 50 years. Other means of exploration, such as limited geophysics, have been considered or applied over the years.

Drilling methods during this time include cable tool, rotary, and reverse circulation (RC) with the results of geologic logging and brine sampling being used to support the geological model and mineral resource.

For the purposes of this report, it is SRK’s opinion that active brine pumping, exploration drilling, and geophysical surveys provide the most relevant and robust exploration data for the current mineral resource estimation (MRE). Historical brine pumping and sampling are the most critical of the non-drilling exploration methods applied to this model and MRE.

1.4Mineral Resource

Mineral resources have been estimated by SRK. SRK generated a 3D geological model informed by various data types (drill hole, geophysical data, surface geologic mapping, interpreted cross sections, and surface/downhole structural observations) to define and delimit the shapes of aquifers which host the Lithium (Li).

Lithium concentration data from the brine sampling exploration data set were regularized to equal lengths for constant sample volume (Compositing). Lithium grades were interpolated into a block model using ordinary kriging (OK) methods. Results were validated visually and via various statistical comparisons. The estimate was depleted for current production and categorized in a manner consistent with industry standards and statistical parameters. Mineral resources have been reported using a revised pumping plan, based on economic and mining assumptions to support the reasonable potential for eventual economic extraction of the resource. A cut-off grade (CoG) has been derived from these economic parameters and the resource has been reported above this cut-off. Current mineral resources, exclusive of reserves, are summarized in Table 1.1


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Table 1.1: Silver Peak Mineral Resource Estimate, Exclusive of Mineral Reserves (Effective June 30,2021)

Measured Resource

Indicated Resource

Measured + Indicated Resource

Inferred Resource

Contained Li (Tonnes x 1000)

Brine Concentration (mg/L Li)

Contained Li (Tonnes x 1000)

Brine Concentration (mg/L Li)

Contained Li (Tonnes x 1000)

Brine Concentration (mg/L Li)

Contained Li (Tonnes x 1000)

Brine Concentration (mg/L Li)

Total

10.40

151.92

24.71

142.99

35.11

145.42

62.76

120.92

Source: SRK, 2021

•Mineral resources are reported exclusive of mineral reserves. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

•Resources are reported on an in situ basis.

•Resources are reported as lithium metal

•Resources have been categorized subject to the opinion of a QP based on the amount/robustness of informing data for the estimate, consistency of geological/grade distribution, survey information.

•Resources have been calculated using drainable porosity estimated from bibliographical values based on the lithology and QP’s experience in similar deposits

•The estimated economic cutoff grade utilized for resource reporting purposes is 50 mg/l lithium, based on the following assumptions:

◦A technical grade lithium carbonate (LC) price of US$11,000/metric tonne CIF North Carolina. This is a 10% premium to the price utilized for reserve reporting purposes. The 10% premium applied to the resource versus the reserve was selected to generate a resource larger than the reserve, ensuring the resource fully encompassed the reserve while still maintaining reasonable prospect for eventual economic extraction.

◦A fixed brine pumping rate of 20,000 afpy, ramped up from current levels over a period of five years.

◦Operating cost estimates are based on a combination of fixed brine extraction, G&A and plant costs and variable costs associated with raw brine pumping rate or lithium production rate. Average life of mine operating costs is calculated at approximately $4,900/metric tonne LC CIF North Carolina.

•Mineral Resources tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding.

•SRK Consulting (U.S.) Inc. is responsible for the Mineral Resources with an effective date: June 30,2021.


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Table 1.2: Silver Peak Mineral Resource Estimate, Inclusive of Mineral Reserves (Effective June 30,2021)


	Measured Resource		Indicated Resource		Measured + Indicated Resource		Inferred Resource
	Contained Li (Tonnes x 1000)	Brine Concentration (mg/L Li)	Contained Li (Tonnes x 1000)	Brine Concentration (mg/L Li)	Contained Li (Tonnes x 1000)	Brine Concentration (mg/L Li)	Contained Li (Tonnes x 1000)	Brine Concentration (mg/L Li)
In Situ	28.71	151.92	67.44	142.97	96.15	145.41	62.76	120.92
In Process	1.31	103	-	-	1.31	103	-	-

Source: SRK, 2021

•Mineral resources are reported inclusive of mineral reserves. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

•Resources are reported as in situ and in process. In process resources quantify the prior 24 months of pumping data and reflect the raw brine, at the time of pumping.

•Resources are reported as lithium metal

•Resources have been categorized subject to the opinion of a QP based on the amount/robustness of informing data for the estimate, consistency of geological/grade distribution, survey information.

•Resources have been calculated using drainable porosity estimated from bibliographical values based on the lithology and QP’s experience in similar deposits

•The estimated economic cutoff grade utilized for resource reporting purposes is 50 mg/l lithium, based on the following assumptions:

◦A technical grade lithium carbonate LC price of US$11,000 / metric tonne CIF North Carolina. This is a 10% premium to the price utilized for reserve reporting purposes. The 10% premium applied to the resource versus the reserve was selected to generate a resource larger than the reserve, ensuring the resource fully encompassed the reserve while still maintaining reasonable prospect for eventual economic extraction.

◦A fixed brine pumping rate of 20,000 afpy, ramped up from current levels over a period of five years.

◦Operating cost estimates are based on a combination of fixed brine extraction, G&A and plant costs and variable costs associated with raw brine pumping rate or lithium production rate. Average life of mine operating costs is calculated at approximately $4,900/metric tonne LC CIF North Carolina.

•Mineral Resources tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding.

•SRK Consulting (U.S.) Inc. is responsible for the Mineral Resources with an effective date: June 30,2021.


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1.5Mining Methods and Mineral Reserve Estimates

Raw brine extraction rates are currently limited by evaporation pond capacity and the number of extraction wells. However, the lithium carbonate production plant has excess capacity and Albemarle has water rights exceeding current pumping rates. Therefore, consistent with Albemarle’s strategic plan for the Silver Peak operation, SRK has assumed increasing the capacity of the wellfield and the evaporation ponds to sustain brine extraction rates at the maximum level of water rights held by Albemarle (20,000 acre feet per year [afpy]).

To develop a life of mine production plan, SRK simulated the movement of lithium-rich brine in the alluvial sediments of Clayton Valley using a predictive numerical groundwater flow and transport model. The model was calibrated to available historical water level and lithium concentration data. The predictive model output generated a brine production profile, based upon the wellfield design assumptions, with a maximum pumping rate of 20,000 afpy over a period of 50 years.

As there is a disconnect between the static resource model and the dynamic predictive model utilized for reserve estimation, as well as other factors such as mixing of brine during production, a direct conversion of measured and indicated resources to proven and probable reserves is not possible. Therefore, given that the uncertainty and associated risk linked with the pumping plan are time dependent (i.e., consistently increasing through the simulation period), in the QP’s opinion, the most appropriate method to quantify the reserve and allocate proven and probable classification is by taking a time-dependent approach. Based on the QP’s experience and the production history for Silver Peak, brine production through 2026 (approximately 5.5 years) can be appropriately classified as proven reserves within a total life of mine through 2050 (i.e., truncating the model simulation at approximately 30 years) with these remaining production years classified as probable reserve. Truncating the mine plan at the end of 2050 results in a pumping plan that extracts approximately 60% of the lithium contained in the total measured and indicated mineral resource (inclusive of reserves). The application of proven reserves through 2026 results in approximately 20% of the reserve being classified as proven. For comparison, the measured resource comprises approximately 30% of the total measured and indicated resource.

Table 1.3 shows the Silver Peak mineral reserves as of June 30, 2021.


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Table 1.3: Silver Peak Mineral Reserves, Effective June 30, 2021


	Proven Reserve		Probable Reserve		Proven and Probable Reserve
	Contained Li (Metric Tonnes x 1,000)	Li Concentration (mg/L)	Contained Li (Metric Tonnes x 1,000)	Li Concentration (mg/L)	Contained Li (Metric Tonnes Li x 1,000)	Li Concentration (mg/L)
In Situ	11.91	87	49.13	83	61.04	84
In Process	1.31	103	-	-	1.31	103

Source: SRK, 2021

•Proven reserves have been estimated as the lithium mass pumped during Years 2021 through 2026 of the proposed Life of Mine plan

•Probable reserves have been estimated as the lithium mass pumped from 2026 until the end of the proposed Life of Mine plan (2050)

•Reserves are reported as lithium metal

•The estimated economic cutoff grade for the Silver Peak project is 56 mg/l lithium, based on the assumptions discussed below. The production pumping plan was truncated due to technical uncertainty inherent in long-term production modelling and remained well above the economic cutoff grade (i.e., the economic cutoff grade did not result in a limiting factor to the estimation of the reserve).

◦A technical grade LC price of US$10,000/metric tonne CIF North Carolina.

◦A fixed brine pumping rate of 20,000 afpy, ramped up from current levels over a period of five years.

◦Operating cost estimates are based on a combination of fixed brine extraction, G&A and plant costs and variable costs associated with raw brine pumping rate or lithium production rate. Average life of mine operating costs is calculated at approximately $5,100/metric tonne LC CIF North Carolina.

•Mineral reserve tonnage, grade and mass yield have been rounded to reflect the accuracy of the estimate (thousand tonnes), and numbers may not add due to rounding.

•SRK Consulting (U.S.) Inc. is responsible for the mineral reserves with an effective date: June 30, 2021.

In the QP’s opinion, key points of uncertainty associated with the modifying factors in this reserve estimate that could have a material impact on the reserve include the following:

•Resource dilution: The reserve estimate included in this report assumes the brine aquifer is extracted at a rate of 20,000 afpy, in accordance with Albemarle’s maximum water rights at Silver Peak. Historic pumping rates are lower, on average, than this level and pumping at this higher rate could result in more freshwater dilution than predicted in the model simulation. Higher dilution levels may result in a shorter mine life (i.e., lower reserve) or require pumping at lower rates. While the same amount of lithium potentially could be extracted over a longer timeframe at the lower pumping rate, the associated reduction in lithium production on an annual basis could increase the cutoff grade for the operation and potentially reduce the mineral reserve.

•Aquifer Pumpability: The pumpability of an aquifer is an assessment of the simulated water level in the model’s production wells to estimate when the well will likely no longer be operable due to water levels in the well dropping below the pump intake. Comparison of simulated to measured water levels using the limited historical water level data available were used to devise adjustment factors for evaluating aquifer pumpability, allowing for a conservative estimate on when wells would no longer be operable. Inaccurate estimates of aquifer pumpability may result in wells becoming inoperable earlier or require pumping at lower rates.


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•Hydrogeological assumptions: Factors such as specific yield and hydraulic conductivity play a key role in estimating the volume of brine available for extraction in the wellfield and the rate it can be extracted. These factors are variable through the project area and are generally difficult to directly measure. Significant variability, on average, from the assumptions utilized in the predictive model could materially impact the estimate of brine available for extraction and associated concentration. Model sensitivity analyses were completed on key wellfield assumptions as discussed in Section 12. As shown in these figures, the ranges evaluated in these analyses resulted in lithium concentrations ranging from 80 to 95 mg/l, compared to a base-case of 89 mg/l, at the end of the 30-year reserve life. However, these analyses do not fully quantify all potential uncertainty and wider variability in these parameters or changes in other parameters may result in more significant deviation in the base case than those shown in the sensitivity analyses.

•Lithium carbonate price: Although the pumping plan remains above the economic cutoff grade discussed in Section 12.2.2, commodity prices, including technical grade lithium carbonate can have significant volatility which could result in a shortened reserve life.

•Extension of the pumping plan beyond 2050: In the QP’s opinion, the predictive model presents adequate confidence in the results to support a reserve estimate through 2050. However, the model continued to predict lithium concentrations above the economic cutoff grade discussed in Section 12.2.2 for the full 50-year simulation profile. This suggests opportunity remains to extend the mine life and associated reserve beyond the current assumptions.

1.6Mineral Processing and Metallurgical Testing

Silver Peak is an operating mine. At this stage of operations, the facility relies upon historic operating performance to support its production projections. Therefore, no metallurgical testwork has been relied upon to support the estimation of reserves documented herein.

The processing methodology utilizes traditional solar evaporation to concentrate and remove impurities from the lithium-rich brine extracted from the resource. This concentrated brine is then further purified in the processing facilities and chemically reacted to produce a technical grade lithium carbonate.

In the pond system the brines are concentrated by the solar evaporation of water, which leads to the precipitation of salts (primarily sodium chloride) when the saturation level of the solution is reached. Brine flows from one pond to another, typically through flow points cut in the dikes separating one pond from another, or pumped where elevation differential requires, as evaporation increases the total dissolved solids (TDS) content.

SRK estimates the current evaporation pond capacity is adequate to support approximately 16,420 afpy sustained brine extraction rate. However, Albemarle is currently evaluating options to expand this capacity, including new ponds and rehabilitating existing evaporation ponds not currently in use (by removal of existing halite mass) to increase the evaporation pond capacity to sustain approximately 20,000 afpy.

When the lithium concentration reaches levels suitable for feed to the lithium carbonate plant, approximately 0.54% lithium, the brine is pumped to the carbonate plant. The concentrated brine feed goes through additional impurity removal through chemical precipitation before final


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precipitation of lithium carbonate (Li2CO3) in the reactor system. The final product is dried before packaging for sale.

Process recovery is estimated based on historical operational performance through a combination of a fixed 85% recovery rate for the lithium carbonate plant and a variable pond recovery factor, based on raw brine lithium concentration, that averages around 51% over the reserve life.

The nameplate capacity of the lithium carbonate plant is listed as 6,000 t/a Li2CO3. However, in recent years Silver Peak has demonstrated that the plant is capable of producing higher than that. In 2018, the plant produced approximately 6,500 tonnes Li2CO3.

1.7Infrastructure

Access to the site is by paved highway off major US highways. Employees travel to the project from various communities in the region. There is some employee housing in the unincorporated town of Silver Peak, where the project is located. The site includes large evaporation ponds, brine wells, salt storage facilities, administrative offices and change house, laboratory, processing facility, propane and diesel storage tanks, water supply and storage, utility supplied power transmission lines feed power substations and distribution system, liming facility, boiler and heating system, packaging and warehousing facility, miscellaneous shops, and general laydown yard. All infrastructure needed for ongoing operations is in place and functioning.

1.8Environmental Permitting, Social, and Closure

The SPLO was originally constructed and commissioned in 1964, significantly pre-dating most environmental statutes and regulations, including the federal National Environmental Policy Act of 1969 (NEPA) and subsequent water, air, and waste regulations. Baseline data collection as part of environmental impact analyses was never conducted, though some hydrogeological investigations were performed as part of project development. The U.S. Department of Energy (DOE) conducted a limited NEPA Environmental Assessment (EA) in 2010 which analyzed the impact to a limited number of environmental resources. These are supplemented by studies conducted around and within Clayton Valley, but not specifically for the SPLO. The studies have included:

•Air quality

•Site hydrology/hydrogeology

•Groundwater quality

•General wildlife

•Avian wildlife

•Botanical inventories

•Cultural inventories

In addition, the SPLO currently has a permitting action before the Bureau of Land Management (BLM) for which subsequent baseline reports have been prepared for use in a new EA and include studies for the pale kangaroo mouse, soils, ecological sites, vegetation, noxious and invasive weeds, migratory birds, eagles and raptors, and cultural resources. SRK did not have access to these reports for this assessment. Separately, SPLO conducted a site evaluation for the presence of Tiehm’s buckwheat and observed no evidence of any buckwheat species within the SPLO project property boundaries.


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There are currently no known environmental issues that could materially impact Albemarle’s ability to extract SPLO resources or reserves. The Administrative Order on Consent (discussed below) involves the re-allocation of water rights to specific wells and the closure of other wells and should not impact operations.

Comprehensive environmental management plans have been prepared as part of both state and federal permitting authorizing mineral extraction and processing operations for the SPLO. The state environmental management plans were prepared as part of the Water Pollution Control Permit (WPCP) authorization. The federal management plans do not appear to have been specifically and formally submitted as part of the SPLO Plan of Operations, but most overlap with their state counterparts. Site-wide monitoring of the SPLO is accomplished on multiple levels and across various regulatory programs.

The site is located in EPA Region 9 and operates as a conditionally exempt small quantity generator under the Resource Conservation and Recovery Act (RCRA) waste regulations. The facility typically generates little or no hazardous waste. All non-hazardous solid waste generated at the plant is disposed of in a permitted on-site landfill. There are no known off-site properties with areas of contamination or Superfund sites within the immediate vicinity of the facility.

While not tailings in the traditional hard rock mining sense, the SPLO does generate a solid residue that requires management during operations and closure. The lime treatment of the brines results in the production of a solid consisting of magnesium hydroxide and calcium sulfate, which is collected and deposited for final storage in the Lime Solids Pond. Toxicity Characteristic Leaching Procedure (TCLP) analysis of the lime solids conducted in October 1988, indicated below detection levels for cadmium, chromium, lead, mercury, selenium, and silver, but detectable non-hazardous levels of arsenic (0.02 milligrams per liter [mg/L]) and barium (0.08 mg/L). More recent analyses were not available.

The SPLO includes both public and private lands within Esmeralda County, Nevada, and therefore falls under the jurisdiction and permitting requirements of Esmeralda County, the State of Nevada, and the federal government through the BLM.

The SPLO currently controls a total duty of 21,448 acre-feet per annum in the Clayton Valley hydrographic basin, a basin that has been “designated” by the Nevada Division of Water Resources (NDWR) but has no preferred uses.

On October 4, 2018, an Administrative Order on Consent (AOC) was made and entered into by and between the NDWR and the Office of the State Engineer and Albemarle. The AOC found that, while Albemarle and its predecessors have proceeded in good faith and with reasonable diligence to perfect all of its water rights applications, Albemarle has not yet completed application of the totality of its water to a beneficial use.

Mine Closure

Albemarle/Silver Peak has approved mine reclamation closure plans prepared in accordance with both state (NAC 445A, NAC 519A) and federal (43 CFR §3809.401) regulations. These plans have


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been reviewed and approved by the Nevada Division of Environmental Protection (NDEP) and the BLM. The most recently approved reclamation plans and financial assurance cost estimates were approved in 2020.

The closure plan for the site includes activities required to create a physically and chemically stable environment that will not degrade waters of the state. Because this site is not a typical mining operation, the primary activities include closure of wells, removal of all pumps, piping and processing facilities, closure of the evaporation ponds, demolition of buildings and closure of roads. The site is located in a denuded salt playa, so revegetation criteria are minimal.

Albemarle/Silver Peak does not maintain a current internal life of mine (LoM) cost estimate to track the closure cost to self-perform a closure. However, the state and federal regulatory agencies require financial assurance instruments to cover closure of a site. The cost estimates and financial assurance instruments are reviewed and updated every three years and are intended to reflect the cost that the managing agencies would incur to implement the closure plan in the event of a bankruptcy at the point of maximum closure liability during the upcoming three-year period. Albemarle/Silver Peak prepared an update to the 2017 closure cost estimate and submitted it to the NDEP and BLM in 2020 for approval. The standard model used by mining operations for reclamation cost estimating in Nevada is the Standardized Reclamation Cost Estimator (SRCE). The 2020 closure cost estimate for Silver Peak was prepared in version 17b of the SRCE model. The SRCE model has been in use since 2006 in the state of Nevada after validation by both state and federal regulators.

The regulatory agencies require that the estimate be based on government supplied labor rates and predefined third-party unit rates for equipment and materials. These are updated each year by the NDEP. In August 2020, Albemarle/Silver Peak submitted a three-year update to the closure cost estimate utilizing the published 2020 NDEP costs. The update was approved in December 2020.

According to Albemarle/SPLO, there were no significant changes in the 2020 update to the operational layout and the changes in costs were primarily due to detail added to the model and changes in the unit rates provided by the NDEP. Labor rates are federally mandated Davis-Bacon rates for Southern Nevada. Equipment costs are based on rental rates quoted from Cashman Caterpillar in Reno, Nevada. Miscellaneous unit rates from miscellaneous Nevada vendor quotes (seeding, well abandonment, etc.). Some costs are based on published construction cost databases such as RS Means Heavy Construction.

The purpose for which the only cost estimate provided for review was created was to provide a basis for financial assurance. This type of estimate reflects the cost that the government agency responsible for closing the site in the event that an operator fails to meet their obligation would incur. If Albemarle, rather than the government, closes the site in accordance with their current mine plan and approved closure plan, the cost of closure is likely to be different from the financial assurance cost estimate approved by the government. There are a number of costs that are included in the financial assurance estimate that would only be incurred by the government, such as government contract administration. Other costs, such as head office costs, a number of human resource costs, taxes, fees, and other operator-specific costs that are not included in the financial assurance cost estimate would likely be incurred by Albemarle during closure of the site.


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1.9Summary Capital and Operating Cost Estimates

Silver Peak is an operating lithium mine. Capital and operating costs are forecast as a normal course of operational planning with a primary focus on short term budgets (i.e., subsequent year). Silver Peak currently utilizes mid (e.g., five year plan) and long-term (i.e., LoM) planning. Given the limited current mid and long-term planning completed at the operation, SRK developed a long-term forecast for the operation based on historic operating results, adjusted for assumed changes in operating conditions and planned strategic changes to operations (the most significant change being sustained higher brine pumping within the 5-year period and beyond and lithium carbonate production rates, maximizing the capacity of Albemarle’s water rights and existing processing facilities). SRK’s capital expenditure forecast is provided in Table 1.4 and its operating cost forecast is provided in Figure 1-1.

Table 1.4: Capital Cost Forecast ($M Real 2020)


Period	Total Sustaining Capex	Wellfield Expansion Projects	Capital Expenditure (US$M Real 2020)
2021	12.65	7.00	5.65
2022	52.21	22.00	30.21
2023	25.66	8.00	17.66
2024	12.38	-	12.38
2025	10.25	-	10.25
2026	7.25	-	7.25
2027	6.25	-	6.25
2028	10.00	-	10.00
2029	7.00	-	7.00
2030	7.00	-	7.00
Remaining LoM (2031 – 2053)	147.41	-	147.41

Note: 2021 capex is July – December only

Source: SRK, 2021

Note 2021 costs reflect a partial year (July– December)

Source: SRK, 2021

Figure 1-1: Total Forecast Operating Expenditure (Tabular data is presented in Table 19-7)


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operating scenario and forward-looking assumptions outlined in this report. Therefore, changes in these forward-looking assumptions can result in capital and operating costs that deviate more than 25% from the costs forecast herein.

1.10Economics

The operation is forecast to have a 32-year life with the first modeled year of operation being a partial year to align with the effective date of the reserves.

The economic analysis metrics are prepared on annual after-tax basis in USD. The results of the analysis are presented in Table 1.5. At a technical grade lithium carbonate price of US$10,000/t, the net present value, using an 8% discount rate, (NPV@8%) of the modeled after-tax free cash flow is US$60 million. Note that because Silver Peak is in operation and is modeled on a go-forward basis from the date of the reserve, historic capital expenditures are treated as sunk costs (i.e., not modeled) and therefore, IRR and payback period analysis are not relevant metrics.

Table 1.5: Indicative Economic Results


LoM Cash Flow (Unfinanced)	Units	Value
Total Revenue	USD	1,440,949,180
Total Opex	USD	(719, 653,939)
Operating Margin	USD	721,295,241
Operating Margin Ratio	%	50%
Taxes Paid	USD	(126,596,288)
Free Cashflow	USD	302,513,973
Before Tax
Free Cash Flow	USD	429,110,261
NPV @ 8%	USD	101,583,201
NPV @ 10%	USD	72,891,749
NPV @ 15%	USD	30,977,352
After Tax
Free Cash Flow	USD	302,513,973
NPV @ 8%	USD	59,656,066
NPV @ 10%	USD	38,530,185
NPV @ 15%	USD	7,962,954

Source: SRK, 2021

A summary of the cashflow on an annual basis is presented in Figure 1-2.


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Source: SRK, 2021

Figure 1-2: Annual Cashflow Summary (Tabular data is presented in Table 19-7)

1.11Conclusions and Recommendations

1.11.1Geology

The property is well known in terms of descriptive factors and ownership. Geology and mineralization are well-understood through decades of active mining. The status of exploration, development, and operations is very advanced and active. Assuming exploration and mining continue at Silver Peak in the way that they are currently being done, there are no additional recommendations at this time.

1.11.2Mineral Resource Estimates

SRK has reported a mineral resource estimation which is appropriate for public disclosure and long-term considerations of mining viability. The mineral resource estimation could be improved with additional infill program (drilling, core sampling, and brine sampling).

1.11.3Mining Methods and Mineral Reserve Estimates

Mining operations have been established at Silver Peak over its more than 50-year history of operation. Reserve estimates have been developed based on a predictive hydrogeological model that estimates brine production rates and associated lithium concentrations over time. In the QP’s opinion, the mining methods and predictive approach for reserve development are appropriate for Silver Peak.

However, in the QP’s opinion, there remains opportunity to further refine the production schedule. This includes the potential to optimize the ramp-up schedule to the full 20,000 afpy (timing will be dependent upon Albemarle’s strategic goals and desired annual capital spending). Furthermore, it is likely that there remains opportunity to increase lithium concentration in the brine by optimizing well locations (both in the existing wellfield and with new well development). This may include the use of deeper extraction wells. Therefore, SRK recommends Silver Peak evaluate these optimization opportunities to test the potential for improvement.

1.11.4Mineral Processing and Metallurgical Testing

In order to evaluate an increase recovery within the pond system, SRK recommends assessing the feasibility of lining some evaporation ponds.


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1.11.5Infrastructure

The infrastructure is established and functioning. There is no significant remaining infrastructure needed to support ramp up or ongoing operations.

1.11.6Environmental, Permitting, Social, and Closure

There are currently no known environmental issues that could materially impact Albemarle’s ability to extract SPLO resources or reserves. The AOC between Albemarle and the NDWR involves the re-alignment of water rights to specific wells and the closure of other wells, and its framework should facilitate expansion procedures and will not negatively impact operations.

SRK recommends that the lime solids produced during beneficiation and deposited in cells upon the playa, be more comprehensively characterized under today’s standard practice, as the last testing of this material was conducted in 1988.

Closure

Albemarle/SPLO has approved mine reclamation closure plans prepared in accordance with both state (NAC 445A, NAC 519A) and federal (43 CFR §3809.401) regulations. These plans have been reviewed and approved by the Nevada Division of Environmental Protection (NDEP) and the BLM. The most recently approved reclamation plans and financial assurance cost estimates were approved in 2020.

Because Albemarle does not currently have an internal closure cost estimate, SRK recommends Albemarle develop an independent closure plan that includes all factors referenced above to ascertain the cost of an internal closure effort.

Furthermore, because closure of the site is not expected until 2054, the closure cost estimate represents future costs based on current expectations of site conditions at that date. In all probability, site conditions at closure will be different than currently expected and, therefore, the current estimate of closure costs is unlikely to reflect the actual closure cost that will be incurred in the future.

1.11.7Economics

The operation is expected to generate positive cashflow during every full year in which it is pumping or processing brine on the schedule and at the costs and process outlined in this report except for 2022 and 2023 during which significant capital expenditure is expected (positive operating cash flow is still generated).

An economic sensitivity analysis indicates that the operation’s NPV is most sensitive to variations in lithium carbonate price, lithium recovery and brine grade.


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2Introduction

This TRS was prepared in accordance with the SEC S-K regulations (Title 17, Part 229, Items 601 and 1300 through 1305) for Albemarle by SRK on SPLO. Albemarle is 100% owner of the SPLO project.

2.1Terms of Reference and Purpose

The quality of information, conclusions, and estimates contained herein are consistent with the level of effort involved in SRK’s services, based on i) information available at the time of preparation and ii) the assumptions, conditions, and qualifications set forth in this report. This report is intended for use by Albemarle subject to the terms and conditions of its contract with SRK and relevant securities legislation. The contract permits Albemarle to file this report as a TRS pursuant to the SEC S-K regulations, more specifically Title 17, Subpart 229.600, item 601(b)(96) - TRS and Title 17, Subpart 229.1300 - Disclosure by Registrants Engaged in Mining Operations. Any other uses of this report by any third party is at that party’s sole risk. The responsibility for this disclosure remains with Albemarle.

The purpose of this TRS is to report mineral resources and mineral reserves for SPLO. This report is prepared to a pre-feasibility standard, as defined by S-K 1300.

The effective date of this report is June 30,2021.

The report was amended to include additional clarifying information in December 2022. The basis of the report is unchanged. The changes and location in document are summarized as follows:

•A simplified stratigraphic column of the hydrogeologic units (Chapter 6.2.1.)

•Additional QP statement on adequacy of QA/QC data (Chapter 8.4)

•Additional QP statement on adequacy of metallurgical testwork (Chapter 10)

•Clarification on location of yield information and QP statement (Chapter 14.3)

•Additional QP statement on metallurgical testwork (Chapter 14.5)

•Addition of historic price curves (Chapter 16.1.4)

•Addition of notes on figures referencing tabular source data (Chapter 1.8, 1.9, 18.3, 19.1.3, 19.2)

•Modified Summary Table for clarity (Chapter 19.2)

2.2Sources of Information

This report is based in part on internal Company technical reports, previous internal studies, maps, published government reports, Company letters and memoranda, and public information as cited throughout this report and listed in the References Section 24.

Reliance upon information provided by the registrant is listed in Section 25 when applicable.

2.3Details of Inspection

Table 2.1: Site Visits summarizes the details of the personal inspections on the property by each qualified person or, if applicable, the reason why a personal inspection has not been completed.


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Table 2.1: Site Visits


Expertise	Date(s) of Visit	Details of Inspection	Reason Why a Personal Inspection has Not Been Completed
Infrastructure	August 18, 2020	SRK site visit with inspection of evaporation ponds, liming area, administrative area, and processing plant and packaging area.
Environmental	July 20, 2020	SRK Site visit with inspection of evaporation ponds, liming area, administrative area, and exterior of processing plant and packaging area.
Mineral Resources	August 18, 2020	SRK site visit with inspection of evaporation ponds, liming area, administrative area, and core storage area
Mineral Reserves and Mining Methods	August 18, 2020	SRK site visit with inspection of evaporation ponds, liming area, administrative area, and core storage area
Process	August 18, 2020	SRK site visit with inspection of evaporation ponds, liming area, administrative area, and processing plant and packaging area.

2.4Report Version Update

The user of this document should ensure that this is the most recent TRS for the property.

This TRS is not an update of a previously filed TRS.

2.5Qualified Person


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3Property Description

3.1Property Location

The SPLO is in a rural area approximately 30 mi southwest of Tonopah, in Esmeralda County, Nevada, United States at the approximate coordinates of 37.751773° North and 117.639027° West. It is located in the Clayton Valley, an arid valley historically covered with dry lake beds (playas). The operation borders the small unincorporated town of Silver Peak, NV (Figure 3-1). Albemarle extracts lithium-rich brine from the playa at the SPLO to produce lithium carbonate. The site covers approximately 15,301 acres and is dominated by large evaporation ponds on the valley floor, some in use and filled with brine while others are dry and unused. Actual surface disturbance associated with the operations is 7,390 acres, primarily associated with the evaporation ponds. The manufacturing and administrative activities are confined to an area approximately 20 acres in size, portions of which were previously used for silver mining through the early 20th century.

A general layout of the mining claims is shown in Figure 3-2.


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Source: SRK, 2021

Figure 3-1: Regional Location Map – Silver Peak, Nevada


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3.2Mineral Title

Albemarle holds the following type of claims in the Silver Peak area:

•Millsite Claims

•Patented Claims

•Unpatented Claims

•Unpatented Junior Claim

Patented Mining Claim

A patented mining claim is one for which the Federal Government has passed its title to the claimant, making it private land. A person may mine and remove minerals from a mining claim without a mineral patent. However, a mineral patent gives the owner exclusive title to the locatable minerals. It also gives the owner title to the surface and other resources. This means that the owner of the patented claim owns the land as well as the minerals.

Unpatented Mining Claim

An Unpatented mining claim is a particular parcel of Federal land, valuable for a specific mineral deposit or deposits. It is a parcel for which an individual has asserted a right of possession. The right is restricted to the extraction and development of a mineral deposit. The rights granted by a mining claim are valid against a challenge by the United States and other claimants only after the discovery of a valuable mineral deposit, as that term is defined by case law. This means that the owner of an unpatented claim within which a discovery of a valuable mineral deposit has been made has the right of exclusive possession for mining, including the right to extract minerals. No land ownership is conveyed.

Figure 3-2 shows the general location of the different claim types. Table 3.1 through Table 3.3 summarize the claims by type.


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Source: McGinley and Associates, 2019

Figure 3-2: Albemarle Claims – Silver Peak


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Table 3.1: Unpatented Placer and Millsite Claims


Name of Claim	BLM Serial No.	Acres in Claim	Payment Due to the BLM (US$)
CFC # 11	N MC 809490	20	165
CFC # 12	N MC 809491	20	165
CFC # 13	N MC 809492	20	165
CFC # 14	N MC 809493	20	165
CFC # 15	N MC 809494	20	165
CFC # 16	N MC 809495	20	165
CFC # 17	N MC 809496	20	165
CFC # 18	N MC 809497	20	165
CFC # 19	N MC 809498	20	165
CFC # 20	N MC 809499	20	165
CFC # 21	N MC 809500	20	165
CFC # 22	N MC 809501	20	165
CFC # 23	N MC 809502	20	165
CFC # 24	N MC 809503	20	165
CFC # 25	N MC 809504	20	165
CFC # 26	N MC 809505	20	165
CFC # 27	N MC 809506	20	165
CFC # 28	N MC 809507	20	165
CFC # 29	N MC 809508	20	165
CFC # 30	N MC 809509	20	165
CFC # 31	N MC 809510	20	165
CFC # 32	N MC 809511	20	165
CFC # 33	N MC 809512	20	165
CFC # 34	N MC 809513	20	165
CFC # 35	N MC 809514	20	165
CFC # 36	N MC 809515	20	165
CFC # 37	N MC 809516	20	165
CFC # 38	N MC 809517	20	165
CFC # 39	N MC 809518	20	165
CFC # 40	N MC 809519	20	165
CFC # 41	N MC 809520	20	165
CFC # 42	N MC 809521	20	165
CFC # 43	N MC 809522	20	165
CFC # 44	N MC 809523	20	165
CFC # 45	N MC 809524	20	165
CFC # 46	N MC 809525	20	165
CFC # 47	N MC 809526	20	165
CFC # 48	N MC 809527	20	165
CFC # 49	N MC 809528	20	165
CFC # 50	N MC 809529	20	165
CFC # 51	N MC 809530	20	165
CFC # 52	N MC 809531	20	165
CFC # 53	N MC 809532	20	165
CFC # 54	N MC 809533	20	165
CFC # 55	N MC 809534	20	165
CFC # 56	N MC 809535	20	165
CFC # 57	N MC 809536	20	165
CFC # 58	N MC 809537	20	165
CFC # 59	N MC 809538	20	165
CFC # 60	N MC 809539	20	165
CFC # 61	N MC 809540	20	165
CFC # 62	N MC 809541	20	165
CFC # 63	N MC 809542	20	165
CFC # 67	N MC 809543	20	165
CFC # 68	N MC 809544	20	165
CFC # 69	N MC 809545	20	165


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CFC # 70	N MC 809546	20	165
CFC # 71	N MC 809547	20	165
CFC # 72	N MC 809548	20	165
CFC # 73	N MC 809549	20	165
CFC # 74	N MC 809550	20	165
RLI # 79	N MC 1078344	20	165
RLI # 80	N MC 7078345	20	165
RLI # 81	N MC 1078346	20	165
RLI # 82	N MC 1078347	20	165
RLI # 83	N MC 1078348	20	165
RLI # 84	N MC 1078349	20	165
RLI # 85	N MC 1078350	20	165
RLI # 86	N MC 1078351	20	165
RLI # 87	N MC 1078352	20	165
RLI # 88	N MC 1078353	20	165
RLI # 89	N MC 1078354	20	165
RLI # 90	N MC 1078355	20	165
RLI # 91	N MC 1078356	20	165
RLI # 92	N MC 1078357	20	165
RLI # 93	N MC 1078358	20	165
RLI # 94	N MC 1078359	20	165
RLI # 95	N MC 1078360	20	165
RLI # 96	N MC 1078361	20	165
RLI # 97	N MC 1078362	20	165
RLI # 98	N MC 1078363	20	165
RLI # 99	N MC 1078364	20	165
RLI # 100	N MC 1086800	20	165
RLI # 101	N MC 1086801	20	165
RLI # 102	N MC 1086802	20	165
RLI # 103	N MC 1086803	20	165
RLI # 104	N MC 1086804	20	165
RLI # 105	N MC 1078365	20	165
RLI # 106	N MC 1078366	20	165
RLI # 107	N MC 1078367	20	165
RLI # 108	N MC 1078368	20	165
RLI # 109	N MC 1078369	20	165
RLI # 110	N MC 1078370	20	165
RLI # 111	N MC 1078371	20	165
RLI # 112	N MC 1078372	20	165
RLI # 113	N MC 1078373	20	165
RLI # 114	N MC 1078374	20	165
RLI # 115	N MC 1078375	20	165
RLI # 116	N MC 1078376	20	165
RLI # 117	N MC 1078377	20	165
RLI # 118	N MC 1078378	20	165
RLI # 119	N MC 1086805	20	165
RLI # 120	N MC 1086806	20	165
RLI # 121	N MC 1086807	20	165
RLI # 122	N MC 1086808	20	165
RLI # 123	N MC 1086809	20	165
RLI # 124	N MC 1086810	20	165
RLI # 125	N MC 1086811	20	165
RLI # 126	N MC 1086812	20	165
RLI # 127	N MC 1086813	20	165
RLI # 128	N MC 1086814	20	165
RLI # 129	N MC 1086815	20	165
RLI # 130	N MC 1086816	20	165
RLI # 131	N MC 1086817	20	165
RLI # 132	N MC 1086818	20	165


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RLI # 133	N MC 1086819	20	165
RLI # 134	N MC 1086820	20	165
ALB # 1	N MC 1189566	20	165
ALB # 2	N MC 1189567	20	165
ALB # 3	N MC 1189568	20	165
ALB # 4	N MC 1189569	20	165
ALB # 5	N MC 1189570	20	165
ALB # 6	N MC 1189571	20	165
ALB # 7	N MC 1189572	20	165
ALB # 8	N MC 1189573	20	165
ALB # 9	N MC 1189574	20	165
ALB # 10	N MC 1189575	20	165
ALB # 11	N MC 1189576	20	165
ALB # 12	N MC 1189577	20	165
ALB # 13	N MC 1189578	20	165
ALB # 14	N MC 1189579	20	165
ALB # 15	N MC 1189580	20	165
ALB # 16	N MC 1189581	20	165
ALB # 17	N MC 1189582	20	165
ALB # 18	N MC 1189583	20	165

Source: Albemarle, 2020

Table 3.2: Mill Site Patented Claims


Name of Claim	Number	Township	Range
FM #1	22	T2S	R39E
FM #2	22	T2S	R39E
FM #3	22	T2S	R39E
FM #4	22	T2S	R39E
FM #5	22	T2S	R39E
FM #6	22	T2S	R39E
FM #10	22	T2S	R39E
FM #11	22	T2S	R39E
FM #13	22	T2S	R39E
FM #14	22	T2S	R39E
FM #15	22	T2S	R39E
FM #16	22	T2S	R39E
FM #17	22	T2S	R39E
FM #18	22	T2S	R39E
FM #20	22	T2S	R39E
FM #21	22	T2S	R39E
FM #22	22	T2S	R39E
Total Mill Site Claims	17

Source: Albemarle, 2020

Table 3.3: Wellfield Patented Claims


Name of Claim	Number	Township	Range
LI-31-D	31	T1S	R40E
LI-31-D-CASS	31	T1S	R40E
LI-32-A-CASS	32	T1S	R40E
LI-32-A-DOE	32	T1S	R40E
LI-32-A-ENID	32	T1S	R40E
LI-32-A-FRAN	32	T1S	R40E
LI-32-B-CASS	32	T1S	R40E


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LI-32-B-DOE	32	T1S	R40E
LI-32-C	32	T1S	R40E
LI-32-C-ANN	32	T1S	R40E
LI-32-C-BETH	32	T1S	R40E
LI-32-C-CASS	32	T1S	R40E
LI-32-C-DOE	32	T1S	R40E
LI-32-C-FRAN	32	T1S	R40E
LI-32-C-GERT	32	T1S	R40E
LI-32-C-HEIDI	32	T1S	R40E
LI-32-D	32	T1S	R40E
LI-32-D-ANN	32	T1S	R40E
LI-32-D-BETH	32	T1S	R40E
LI-32-D-CASS	32	T1S	R40E
LI-32-D-ENID	32	T1S	R40E
LI-32-D-FRAN	32	T1S	R40E
LI-32-D-GERT	32	T1S	R40E
LI-32-D-HEIDI	32	T1S	R40E
LI-33-A-BETH	33	T1S	R40E
LI-33-A-CASS	33	T1S	R40E
LI-33-A-DOE	33	T1S	R40E
LI-33-A-ENID	33	T1S	R40E
LI-33-A-FRAN	33	T1S	R40E
LI-33-A-GERT	33	T1S	R40E
LI-33-B-BETH	33	T1S	R40E
LI-33-B-CASS	33	T1S	R40E
LI-33-B-DOE	33	T1S	R40E
LI-33-B-ENID	33	T1S	R40E
LI-33-B-FRAN	33	T1S	R40E
LI-33-C	33	T1S	R40E
LI-33-C-ANN	33	T1S	R40E
LI-33-C-BETH	33	T1S	R40E
LI-33-C-CASS	33	T1S	R40E
LI-33-C-DOE	33	T1S	R40E
LI-33-C-FRAN	33	T1S	R40E
LI-33-C-GERT	33	T1S	R40E
LI-33-C-HEIDI	33	T1S	R40E
LI-33-D	33	T1S	R40E
LI-33-D-ANN	33	T1S	R40E
LI-33-D-BETH	33	T1S	R40E
LI-33-D-CASS	33	T1S	R40E
LI-33-D-ENID	33	T1S	R40E
LI-33-D-FRAN	33	T1S	R40E
LI-33-D-GERT	33	T1S	R40E
LI-33-D-HEIDI	33	T1S	R40E
LI-34-A	34	T1S	R40E
LI-34-A-BETH	34	T1S	R40E
LI-34-A-CASS	34	T1S	R40E
LI-34-A-DOE	34	T1S	R40E
LI-34-A-ENID	34	T1S	R40E
LI-34-A-FRAN	34	T1S	R40E
LI-34-A-GERT	34	T1S	R40E
LI-34-A-HEIDI	34	T1S	R40E
LI-34-B-ANN	34	T1S	R40E
LI-34-B-BETH	34	T1S	R40E
LI-34-B-CASS	34	T1S	R40E


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LI-34-B-DOE	34	T1S	R40E
LI-34-B-ENID	34	T1S	R40E
LI-34-B-FRAN	34	T1S	R40E
LI-34-B-GERT	34	T1S	R40E
LI-34-C	34	T1S	R40E
LI-34-C-ANN	34	T1S	R40E
LI-34-C-BETH	34	T1S	R40E
LI-34-C-CASS	34	T1S	R40E
LI-34-C-DOE	34	T1S	R40E
LI-34-C-FRAN	34	T1S	R40E
LI-34-C-GERT	34	T1S	R40E
LI-34-C-HEIDI	34	T1S	R40E
LI-34-D	34	T1S	R40E
LI-34-D-ANN	34	T1S	R40E
LI-34-D-BETH	34	T1S	R40E
LI-34-D-CASS	34	T1S	R40E
LI-34-D-ENID	34	T1S	R40E
LI-34-D-FRAN	34	T1S	R40E
LI-34-D-GERT	34	T1S	R40E
LI-34-D-HEIDI	34	T1S	R40E
LI-35-A-ENID	35	T1S	R40E
LI-35-A-FRAN	35	T1S	R40E
LI-35-A-GERT	35	T1S	R40E
MG-12-A-CASS	12	T2S	R39E
MG-12-A-DOE	12	T2S	R39E
MG-12-C-DOE	12	T2S	R39E
MG-12-D	12	T2S	R39E
MG-12-D-ANN	12	T2S	R39E
MG-12-D-BETH	12	T2S	R39E
MG-12-D-CASS	12	T2S	R39E
MG-12-D-ENID	12	T2S	R39E
MG-12-D-FRAN	12	T2S	R39E
MG-12-D-GERT	12	T2S	R39E
MG-13-A	13	T2S	R39E
MG-13-A-BETH	13	T2S	R39E
MG-13-A-CASS	13	T2S	R39E
MG-13-A-DOE	13	T2S	R39E
MG-13-A-FRAN	13	T2S	R39E
MG-13-A-GERT	13	T2S	R39E
MG-13-A-HEIDI	13	T2S	R39E
MG-13-B-ANN	13	T2S	R39E
MG-13-D	13	T2S	R39E
MG-13-D-ANN	13	T2S	R39E
MG-13-D-BETH	13	T2S	R39E
MG-13-D-CASS	13	T2S	R39E
MG-24-A	24	T2S	R39E
MG-24-A-BETH	24	T2S	R39E
MG-24-A-CASS	24	T2S	R39E
MG-24-A-DOE	24	T2S	R39E
MG-24-D	24	T2S	R39E
MG-24-D-ANN	24	T2S	R39E
MG-24-D-BETH	24	T2S	R39E
MG-24-D-CASS	24	T2S	R39E
MG-25-A	25	T2S	R39E
MG-25-A-BETH	25	T2S	R39E


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NA-1-B	1	T2S	R40E
LI-35-B	35	T1S	R40E
LI-35-B-BETH	35	T1S	R40E
LI-35-B-CASS	35	T1S	R40E
LI-35-B-DOE	35	T1S	R40E
LI-35-B-ENID	35	T1S	R40E
LI-35-B-FRAN	35	T1S	R40E
LI-35-B-GERT	35	T1S	R40E
LI-35-C	35	T1S	R40E
LI-35-C-ANN	35	T1S	R40E
LI-35-C-BETH	35	T1S	R40E
LI-35-C-CASS	35	T1S	R40E
LI-35-C-DOE	35	T1S	R40E
LI-35-C-FRAN	35	T1S	R40E
LI-35-C-GERT	35	T1S	R40E
LI-35-C-HEIDI	35	T1S	R40E
LI-35-D-FRAN	35	T1S	R40E
LI-35-D-GERT	35	T1S	R40E
LI-35-D-HEIDI	35	T1S	R40E
NA-1-B-ANN	1	T2S	R40E
NA-1-B-FRAN	1	T2S	R40E
NA-1-B-GERT	1	T2S	R40E
NA-2-A	2	T2S	R40E
NA-2-LOT 6	2	T2S	R40E
NA-2-A-BETH	2	T2S	R40E
NA-2-A-CASS	2	T2S	R40E
NA-2-A-DOE	2	T2S	R40E
NA-2-A-ENID	2	T2S	R40E
NA-2-A-FRAN	2	T2S	R40E
NA-2-A-GERT	2	T2S	R40E
NA-2-A-HEIDI	2	T2S	R40E
NA-2-LOT 7	2	T2S	R40E
NA-2-B	2	T2S	R40E
NA-2-B-ANN	2	T2S	R40E
NA-2-B-BETH	2	T2S	R40E
NA-2-B-CASS	2	T2S	R40E
NA-2-B-DOE	2	T2S	R40E
NA-2-B-ENID	2	T2S	R40E
NA-2-B-FRAN	2	T2S	R40E
NA-2-B-GERT	2	T2S	R40E
NA-2-C	2	T2S	R40E
NA-2-C-ANN	2	T2S	R40E
NA-2-C-BETH	2	T2S	R40E
NA-2-C-CASS	2	T2S	R40E
NA-2-C-DOE	2	T2S	R40E
NA-2-C-FRAN	2	T2S	R40E
NA-2-C-GERT	2	T2S	R40E
NA-2-C-HEIDI	2	T2S	R40E
NA-2-D-ANN	2	T2S	R40E
NA-2-D-FRAN	2	T2S	R40E
NA-2-D-GERT	2	T2S	R40E
NA-2-D-HEIDI	2	T2S	R40E
NA-3-A	3	T2S	R40E
NA-3-A-BETH	3	T2S	R40E
NA-3-A-CASS	3	T2S	R40E


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NA-3-A-DOE	3	T2S	R40E
NA-3-A-ENID	3	T2S	R40E
NA-3-A-FRAN	3	T2S	R40E
NA-3-A-GERT	3	T2S	R40E
NA-3-A-HEIDI	3	T2S	R40E
NA-3-B	3	T2S	R40E
NA-3-B-ANN	3	T2S	R40E
NA-3-B-BETH	3	T2S	R40E
NA-3-B-CASS	3	T2S	R40E
NA-3-B-DOE	3	T2S	R40E
NA-3-B-ENID	3	T2S	R40E
NA-3-B-FRAN	3	T2S	R40E
NA-3-B-GERT	3	T2S	R40E
NA-3-C	3	T2S	R40E
NA-3-C-ANN	3	T2S	R40E
NA-3-C-BETH	3	T2S	R40E
NA-3-C-CASS	3	T2S	R40E
NA-3-C-DOE	3	T2S	R40E
NA-3-C-FRAN	3	T2S	R40E
NA-3-C-GERT	3	T2S	R40E
NA-3-C-HEIDI	3	T2S	R40E
NA-3-D	3	T2S	R40E
NA-3-D-ANN	3	T2S	R40E
NA-3-D-BETH	3	T2S	R40E
NA-3-D-CASS	3	T2S	R40E
NA-3-D-ENID	3	T2S	R40E
NA-3-D-FRAN	3	T2S	R40E
NA-3-D-GERT	3	T2S	R40E
NA-3-D-HEIDI	3	T2S	R40E
NA-4-A	4	T2S	R40E
NA-4-A-BETH	4	T2S	R40E
NA-4-A-CASS	4	T2S	R40E
NA-4-A-DOE	4	T2S	R40E
NA-4-A-ENID	4	T2S	R40E
NA-4-A-FRAN	4	T2S	R40E
NA-4-A-GERT	4	T2S	R40E
NA-4-A-HEIDI	4	T2S	R40E
NA-4-B	4	T2S	R40E
NA-4-B-ANN	4	T2S	R40E
NA-4-B-BETH	4	T2S	R40E
NA-4-B-CASS	4	T2S	R40E
NA-4-B-DOE	4	T2S	R40E
NA-4-B-ENID	4	T2S	R40E
NA-4-B-FRAN	4	T2S	R40E
NA-4-B-GERT	4	T2S	R40E
NA-4-C	4	T2S	R40E
NA-4-C-ANN	4	T2S	R40E
NA-4-C-BETH	4	T2S	R40E
NA-4-C-CASS	4	T2S	R40E
NA-4-C-DOE	4	T2S	R40E
NA-4-C-FRAN	4	T2S	R40E
NA-4-C-GERT	4	T2S	R40E
NA-4-C-HEIDI	4	T2S	R40E
NA-4-D	4	T2S	R40E
NA-4-D-ANN	4	T2S	R40E


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NA-4-D-BETH	4	T2S	R40E
NA-4-D-CASS	4	T2S	R40E
NA-4-D-ENID	4	T2S	R40E
NA-4-D-FRAN	4	T2S	R40E
NA-4-D-GERT	4	T2S	R40E
NA-4-D-HEIDI	4	T2S	R40E
NA-5-A	5	T2S	R40E
NA-5-A-BETH	5	T2S	R40E
NA-5-A-CASS	5	T2S	R40E
NA-5-A-DOE	5	T2S	R40E
NA-5-A-ENID	5	T2S	R40E
NA-5-A-FRAN	5	T2S	R40E
NA-5-A-GERT	5	T2S	R40E
NA-5-A-HEIDI	5	T2S	R40E
NA-5-B-ANN	5	T2S	R40E
NA-5-B-BETH	5	T2S	R40E
NA-5-B-CASS	5	T2S	R40E
NA-5-B-DOE	5	T2S	R40E
NA-5-B-ENID	5	T2S	R40E
NA-5-B-FRAN	5	T2S	R40E
NA-5-B-GERT	5	T2S	R40E
NA-5-C	5	T2S	R40E
NA-5-C-ANN	5	T2S	R40E
NA-5-C-BETH	5	T2S	R40E
NA-5-C-CASS	5	T2S	R40E
NA-5-C-DOE	5	T2S	R40E
NA-5-C-FRAN	5	T2S	R40E
NA-5-C-GERT	5	T2S	R40E
NA-5-C-HEIDI	5	T2S	R40E
NA-5-D	5	T2S	R40E
NA-5-D-ANN	5	T2S	R40E
NA-5-D-BETH	5	T2S	R40E
NA-5-D-CASS	5	T2S	R40E
NA-5-D-ENID	5	T2S	R40E
NA-5-D-FRAN	5	T2S	R40E
NA-5-D-GERT	5	T2S	R40E
NA-5-D-HEIDI	5	T2S	R40E
NA-6-A-BETH	5	T2S	R40E
NA-6-A-CASS	6	T2S	R40E
NA-6-A-DOE	6	T2S	R40E
NA-6-A-ENID	6	T2S	R40E
NA-6-A-FRAN	6	T2S	R40E
NA-6-C-ANN	6	T2S	R40E
NA-6-C-BETH	6	T2S	R40E
NA-6-C-CASS	6	T2S	R40E
NA-6-C-DOE	6	T2S	R40E
NA-6-D	6	T2S	R40E
NA-6-D-ANN	6	T2S	R40E
NA-6-D-BETH	6	T2S	R40E
NA-6-D-CASS	6	T2S	R40E
NA-6-D-ENID	6	T2S	R40E
NA-6-D-FRAN	6	T2S	R40E
NA-6-D-GERT	6	T2S	R40E
NA-6-D-HEIDI	6	T2S	R40E
NA-7-A	6	T2S	R40E


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NA-7-A-BETH	7	T2S	R40E
NA-7-A-CASS	7	T2S	R40E
NA-7-A-DOE	7	T2S	R40E
NA-7-A-ENID	7	T2S	R40E
NA-7-A-FRAN	7	T2S	R40E
NA-7-A-GERT	7	T2S	R40E
NA-7-A-HEIDI	7	T2S	R40E
NA-7-B	7	T2S	R40E
NA-7-B-ANN	7	T2S	R40E
NA-7-B-BETH	7	T2S	R40E
NA-7-B-CASS	7	T2S	R40E
NA-7-B-DOE	7	T2S	R40E
NA-7-B-ENID	7	T2S	R40E
NA-7-B-FRAN	7	T2S	R40E
NA-7-B-GERT	7	T2S	R40E
NA-7-C	7	T2S	R40E
NA-7-C-ANN	7	T2S	R40E
NA-7-C-BETH	7	T2S	R40E
NA-7-C-CASS	7	T2S	R40E
NA-7-C-DOE	7	T2S	R40E
NA-7-C-FRAN	7	T2S	R40E
NA-7-C-GERT	7	T2S	R40E
NA-7-C-HEIDI	7	T2S	R40E
NA-7-D	7	T2S	R40E
NA-7-D-ANN	7	T2S	R40E
NA-7-D-BETH	7	T2S	R40E
NA-7-D-CASS	7	T2S	R40E
NA-7-D-ENID	7	T2S	R40E
NA-7-D-FRAN	7	T2S	R40E
NA-7-D-GERT	7	T2S	R40E
NA-7-D-HEIDI	7	T2S	R40E
NA-8-A	8	T2S	R40E
NA-8-A-BETH	8	T2S	R40E
NA-8-A-CASS	8	T2S	R40E
NA-8-A-DOE	8	T2S	R40E
NA-8-A-ENID	8	T2S	R40E
NA-8-A-FRAN	8	T2S	R40E
NA-8-A-GERT	8	T2S	R40E
NA-8-A-HEIDI	8	T2S	R40E
NA-8-B	8	T2S	R40E
NA-8-B-ANN	8	T2S	R40E
NA-8-B-BETH	8	T2S	R40E
NA-8-B-CASS	8	T2S	R40E
NA-8-B-DOE	8	T2S	R40E
NA-8-B-ENID	8	T2S	R40E
NA-8-B-FRAN	8	T2S	R40E
NA-8-B-GERT	8	T2S	R40E
NA-8-C	8	T2S	R40E
NA-8-C-ANN	8	T2S	R40E
NA-8-C-BETH	8	T2S	R40E
NA-8-C-CASS	8	T2S	R40E
NA-8-C-DOE	8	T2S	R40E
NA-8-C-FRAN	8	T2S	R40E
NA-8-C-GERT	8	T2S	R40E
NA-8-C-HEIDI	8	T2S	R40E


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NA-8-D	8	T2S	R40E
NA-8-D-ANN	8	T2S	R40E
NA-8-D-BETH	8	T2S	R40E
NA-8-D-CASS	8	T2S	R40E
NA-8-D-ENID	8	T2S	R40E
NA-8-D-FRAN	8	T2S	R40E
NA-8-D-GERT	8	T2S	R40E
NA-8-D-HEIDI	8	T2S	R40E
NA-9-A	9	T2S	R40E
NA-9-A-BETH	9	T2S	R40E
NA-9-A-CASS	9	T2S	R40E
NA-9-A-DOE	9	T2S	R40E
NA-9-A-ENID	9	T2S	R40E
NA-9-A-FRAN	9	T2S	R40E
NA-9-A-GERT	9	T2S	R40E
NA-9-A-HEIDI	9	T2S	R40E
NA-9-B	9	T2S	R40E
NA-9-B-ANN	9	T2S	R40E
NA-9-B-BETH	9	T2S	R40E
NA-9-B-CASS	9	T2S	R40E
NA-9-B-DOE	9	T2S	R40E
NA-9-B-ENID	9	T2S	R40E
NA-9-B-FRAN	9	T2S	R40E
NA-9-B-GERT	9	T2S	R40E
NA-9-C	9	T2S	R40E
NA-9-C-ANN	9	T2S	R40E
NA-9-C-BETH	9	T2S	R40E
NA-9-C-CASS	9	T2S	R40E
NA-9-C-DOE	9	T2S	R40E
NA-9-C-FRAN	9	T2S	R40E
NA-9-C-GERT	9	T2S	R40E
NA-9-C-HEIDI	9	T2S	R40E
NA-9-D-ANN	9	T2S	R40E
NA-9-D-BETH	9	T2S	R40E
NA-9-D-CASS	9	T2S	R40E
NA-9-D-FRAN	9	T2S	R40E
NA-9-D-GERT	9	T2S	R40E
NA-9-D-HEIDI	9	T2S	R40E
NA-10-A	10	T2S	R40E
NA-10-A-BETH	10	T2S	R40E
NA-10-A-GERT	10	T2S	R40E
NA-10-A-HEIDI	10	T2S	R40E
NA-10-B	10	T2S	R40E
NA-10-B-ANN	10	T2S	R40E
NA-10-B-BETH	10	T2S	R40E
NA-10-B-CASS	10	T2S	R40E
NA-10-B-ENID	10	T2S	R40E
NA-10-B-FRAN	10	T2S	R40E
NA-10-B-GERT	10	T2S	R40E
NA-10-C-GERT	10	T2S	R40E
NA-10-C-HEIDI	10	T2S	R40E
NA-11-B	10	T2S	R40E
NA-11-B-ANN	11	T2S	R40E
NA-16-B	11	T2S	R40E
NA-16-B-FRAN	16	T2S	R40E


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NA-16-B-GERT	16	T2S	R40E
NA-17-A	16	T2S	R40E
NA-17-A-BETH	17	T2S	R40E
NA-17-A-CASS	17	T2S	R40E
NA-17-A-DOE	17	T2S	R40E
NA-17-A-ENID	17	T2S	R40E
NA-17-A-FRAN	17	T2S	R40E
NA-17-A-GERT	17	T2S	R40E
NA-17-A-HEIDI	17	T2S	R40E
NA-17-B	17	T2S	R40E
NA-17-B-ANN	17	T2S	R40E
NA-17-B-BETH	17	T2S	R40E
NA-17-B-CASS	17	T2S	R40E
NA-17-B-DOE	17	T2S	R40E
NA-17-B-ENID	17	T2S	R40E
NA-17-B-FRAN	17	T2S	R40E
NA-17-B-GERT	17	T2S	R40E
NA-17-C	17	T2S	R40E
NA-17-C-ANN	17	T2S	R40E
NA-17-C-BETH	17	T2S	R40E
NA-17-C-CASS	17	T2S	R40E
NA-17-C-DOE	17	T2S	R40E
NA-17-C-FRAN	17	T2S	R40E
NA-17-C-GERT	17	T2S	R40E
NA-17-C-HEIDI	17	T2S	R40E
NA-17-D-ENID	17	T2S	R40E
NA-17-D-FRAN	17	T2S	R40E
NA-17-D-GERT	17	T2S	R40E
NA-17-D-HEIDI	17	T2S	R40E
NA-18-A	18	T2S	R40E
NA-18-A-BETH	18	T2S	R40E
NA-18-A-CASS	18	T2S	R40E
NA-18-A-DOE	18	T2S	R40E
NA-18-A-ENID	18	T2S	R40E
NA-18-A-FRAN	18	T2S	R40E
NA-18-A-GERT	18	T2S	R40E
NA-18-A-HEIDI	18	T2S	R40E
NA-18-B	18	T2S	R40E
NA-18-B-ANN	18	T2S	R40E
NA-18-B-BETH	18	T2S	R40E
NA-18-B-CASS	18	T2S	R40E
NA-18-B-DOE	18	T2S	R40E
NA-18-B-ENID	18	T2S	R40E
NA-18-B-FRAN	18	T2S	R40E
NA-18-B-GERT	18	T2S	R40E
NA-18-C	18	T2S	R40E
NA-18-C-ANN	18	T2S	R40E
NA-18-C-BETH	18	T2S	R40E
NA-18-C-CASS	18	T2S	R40E
NA-18-C-DOE	18	T2S	R40E
NA-18-C-FRAN	18	T2S	R40E
NA-18-C-GERT	18	T2S	R40E
NA-18-C-HEIDI	18	T2S	R40E
NA-18-D	18	T2S	R40E
NA-18-D-ANN	18	T2S	R40E


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NA-18-D-BETH	18	T2S	R40E
NA-18-D-CASS	18	T2S	R40E
NA-18-D-ENID	18	T2S	R40E
NA-18-D-FRAN	18	T2S	R40E
NA-18-D-GERT	18	T2S	R40E
NA-18-D-HEIDI	18	T2S	R40E
NA-19-A	19	T2S	R40E
NA-19-A-BETH	19	T2S	R40E
NA-19-A-CASS	19	T2S	R40E
NA-19-A-DOE	19	T2S	R40E
NA-19-A-ENID	19	T2S	R40E
NA-19-A-FRAN	19	T2S	R40E
NA-19-A-GERT	19	T2S	R40E
NA-19-A-HEIDI	19	T2S	R40E
NA-19-B	19	T2S	R40E
NA-19-B-ANN	19	T2S	R40E
NA-19-B-BETH	19	T2S	R40E
NA-19-B-CASS	19	T2S	R40E
NA-19-B-DOE	19	T2S	R40E
NA-19-B-ENID	19	T2S	R40E
NA-19-B-FRAN	19	T2S	R40E
NA-19-B-GERT	19	T2S	R40E
NA-19-C	19	T2S	R40E
NA-19-C-ANN	19	T2S	R40E
NA-19-C-BETH	19	T2S	R40E
NA-19-C-CASS	19	T2S	R40E
NA-19-C-DOE	19	T2S	R40E
NA-19-C-FRAN	19	T2S	R40E
NA-19-C-GERT	19	T2S	R40E
NA-19-C-HEIDI	19	T2S	R40E
NA-19-D	19	T2S	R40E
NA-19-D-ANN	19	T2S	R40E
NA-19-D-BETH	19	T2S	R40E
NA-19-D-CASS	19	T2S	R40E
NA-19-D-ENID	19	T2S	R40E
NA-19-D-FRAN	19	T2S	R40E
NA-19-D-GERT	19	T2S	R40E
NA-19-D-HEIDI	19	T2S	R40E
NA-20-A-ENID	20	T2S	R40E
NA-20-A-FRAN	20	T2S	R40E
NA-20-A-GERT	20	T2S	R40E
NA-20-A-HEIDI	20	T2S	R40E
NA-20-B	20	T2S	R40E
NA-20-B-ANN	20	T2S	R40E
NA-20-B-BETH	20	T2S	R40E
NA-20-B-CASS	20	T2S	R40E
NA-20-B-DOE	20	T2S	R40E
NA-20-B-ENID	20	T2S	R40E
NA-20-B-FRAN	20	T2S	R40E
NA-20-B-GERT	20	T2S	R40E
NA-20-C	20	T2S	R40E
NA-20-C-ANN	20	T2S	R40E
NA-20-C-BETH	20	T2S	R40E
NA-20-C-CASS	20	T2S	R40E
NA-20-C-DOE	20	T2S	R40E
NA-20-C-FRAN	20	T2S	R40E
NA-20-C-GERT	20	T2S	R40E
NA-20-C-HEIDI	20	T2S	R40E
NA-20-D-ENID	20	T2S	R40E


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NA-20-D-FRAN	20	T2S	R40E
NA-20-D-GERT	20	T2S	R40E
NA-20-D-HEIDI	20	T2S	R40E
NA-29-B	29	T2S	R40E
NA-29-B-ANN	29	T2S	R40E
NA-29-B-BETH	29	T2S	R40E
NA-29-B-ENID	29	T2S	R40E
NA-29-B-FRAN	29	T2S	R40E
NA-29-B-GERT	29	T2S	R40E
NA-29-C	29	T2S	R40E
NA-29-C-FRAN	29	T2S	R40E
NA-29-C-GERT	29	T2S	R40E
NA-29-C-HEIDI	29	T2S	R40E
NA-30-A	30	T2S	R40E
NA-30-A-BETH	30	T2S	R40E
NA-30-A-CASS	30	T2S	R40E
NA-30-A-DOE	30	T2S	R40E
NA-30-A-GERT	30	T2S	R40E
NA-30-A-HEIDI	30	T2S	R40E
NA-30-B	30	T2S	R40E
NA-30-B-ANN	30	T2S	R40E
NA-30-B-BETH	30	T2S	R40E
NA-30-B-GERT	30	T2S	R40E
NA-30-D-ANN	30	T2S	R40E
NA-30-D-BETH	30	T2S	R40E
NA-30-D-CASS	30	T2S	R40E
NA-31-A	30	T2S	R40E
NA-31-A-BETH	30	T2S	R40E
NA-32-B	30	T2S	R40E
NA-32-B-GERT	30	T2S	R40E
Total Wellfield Claims	536

Source: Albemarle, 2020

3.3Encumbrances

SRK is not aware of any encumbrances on the Silver Peak properties.

3.4Royalties or Similar Interest

The State of Nevada levies a tax against mining operations within the state which effectively functions like a royalty. The tax is called the Nevada Net Proceeds Tax. The tax operates on a slide scale and determined by the ratio of net proceeds to the gross proceeds of the operation on an annual basis. The sliding tax rate scale is outlined in Table 3.4.

Table 3.4: Nevada Net Proceeds Tax Sliding Scale


Net Proceeds as a Percentage of Gross Proceeds			Rate of Tax
Less than 10%			2.0%
10% or more but less than 18%			2.5%
18% or more but less than 26%			3.0%
26% or more but less than 34%			3.5%
34% or more but less than 42%			4.0%
42% or more but less than 50%			4.5%
50% or more			5.0%

Source: SRK, 2021


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The tax is levied on net proceeds of the operation which is obtained by deducting operating costs and depreciation expenses from gross proceeds.

As Silver Peak is located in Nevada, the operation is subject to this tax.

3.5Other Significant Factors and Risks

Extraction of the brine resource from the SPLO requires state water rights. The SPLO water rights have a total combined duty for Mining and Milling and Domestic purposes not to exceed 21,448 acre-feet per annum (AFA) in the Clayton Valley hydrographic basin. On December 4, 2017, all water rights were transferred to Albemarle U.S., Inc.

The NDWR is responsible for quantifying existing water rights; monitoring water use; distributing water in accordance with:

•Court decrees

•Reviewing water availability

•Reviewing the construction and operation of dams (among other regulatory activities)

Water appropriations, which are important to the SPLO given the hydrographic groundwater basin in which the operations are located (Hydrographic Area No. 143 – Clayton Valley) has been “designated” (NDWR Order No. O-1275), but has no preferred uses, are handled through the NDWR and the State Engineer’s Office.

Groundwater basins are typically designated as needing increased regulation and administration by the State Engineer when the total quantity of committed groundwater resources (water rights permits) approach or exceed the estimated perennial yield (average annual groundwater recharge) from the basin. By designating a basin, the State Engineer is granted additional authority in the administration of the groundwater resources within the designated basin. Designation of a water basin by the State Engineer does not necessarily mean that the groundwater resources are being depleted, only that the appropriated water rights exceed the estimated perennial yield. Actual groundwater use the perennial yield to Clayton Valley is estimated to be 24.1 million cubic meters per year (m3/yr) (19,500 AFA) (Rush, 1968), and the quantity of committed groundwater resources (underground water rights permits) amounts to 29.3 million m3/year (23,747 AFA). Of this amount, 28.5 million m3/year (23,100 AFA) are committed for mining and milling purposes (NDWR, 2020). In light of these quantities, groundwater resources in the Clayton Valley hydrographic basin have been over appropriated, and there is no unappropriated groundwater available from the basin. While the State Engineer often considers the groundwater used for mining and milling activities to be a temporary use of water, which would not cause a permanent effect on the groundwater resource, the State Engineer has determined that for lithium production from brine, the actual mining is the mining of water and has declined to determine that such mining is a temporary use. (State Engineer’s Ruling No. 6391, dated April 21, 2017, p. 11). NDWR’s report titled Nevada Statewide Assessment of Groundwater Pumpage Calendar Year 2013 indicates that 19.02 million m3 (15,422 AFA) were pumped in 2013 (NDWR, 2013); the exact quantity consumed or returned to the aquifer is unknown but is likely less than the reported pumping volume. Based upon this report, Clayton Valley is not currently being over drafted or over pumped, however with Albemarle’s expected increased use to the full beneficial use of its water rights, Clayton Valley will be pumped at or over its perennial yield.

On October 4, 2018, an AOC was made and entered into by and between the NDWR and the Office of the State Engineer and Albemarle. The AOC found that, while Albemarle and its predecessors


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have proceeded in good faith and with reasonable diligence to perfect all of its water rights applications, Albemarle has not yet completed application of the totality of its water to a beneficial use. The intent of the AOC is:

•To regulate the drilling and plugging of wells for water so as to minimize threats to the State of Nevada water resources

•To provide a path forward for Albemarle to obtain necessary permits for production wells to use its Water Rights and property rights

•To establish a process and schedule for Albemarle to plug inactive wells

•To establish a process and schedule for Albemarle to realign its water permits and wells in order to obtain well permits to bring the Silver Peak Operation into conformity with contemporary Nevada laws and regulations

•To document Albemarle’s due diligence during the Effective Period [of the AOC], for purposes of NRS § 533.380(3)

•To resolve the Request to Investigate Alleged Violations and AV 209

•To ensure compliance with applicable Nevada laws and regulations

Albemarle continues to work with the NDWR and State Engineer to ensure compliance with the AOC. As of the Effective Date of the AOC, all of Albemarle’s water rights are in good standing with the State Engineer. However, there is currently an active lawsuit challenging Albemarle’s allocation of water rights. As this is a legal matter, SRK is not in a position to comment on any risk associated with this lawsuit.

SRK is not aware of any other significant factors or risk that may affect access, title, or the right or ability to perform work on the property.


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4Accessibility, Climate, Local Resources, Infrastructure and Physiography

4.1Topography, Elevation and Vegetation

Clayton Valley contains a remnant playa that was deposited by the cyclic transgression and regression of ancient seas. The valley is a known closed basin and is structurally faulted downward with its average elevation being lower than all the immediately surrounding basins. The Clayton Valley watershed is about 500 square miles (mi2) in area.

There is a relatively flat vegetation free valley floor referred to as the playa, and its slope is generally less than 2 ft/mi. Its area is about 20 mi2. All brine wells and solar evaporation ponds are within the vegetation free playa area. The basic subsurface geology in the playa area consists primarily of playa, lake and alluvial sediments composed of unconsolidated Clastic and chemical sedimentary deposits.

These sediments are dominated by clay, silt, and minor occurrences of volcanic ash, halite, gypsum, and tufa. The surface geology is composed primarily of clays. There are several gravelly alluvial fans which originate from rock outcroppings at the edges of the basin and are interbedded and interfingered with the playa sediments.

4.2Means of Access

The project is located in south central Nevada, USA between the large cities of Reno and Las Vegas. The unincorporated town of Silver Peak, where the project is located, is accessed by paved highway from the north and by improved dirt road to the east. The project administration offices and plant are located on the south side of town. The project can also be accessed from the east from Goldfield. There are numerous dirt roads that provide access to the project from Tonopah to the north. The closest airport is located in Tonopah with major airports in Reno and Las Vegas. The closest rail is located approximately 90 mi to the north, but is a private rail operated by the Department of Defense.

4.3Climate and Length of Operating Season

The mean annual temperatures vary from the mid 40° to about 50° Fahrenheit (F). In western Nevada, the summers are short and hot, but the winters are only moderately cold. Long periods of extremely cold weather are rare, primarily because the mountains east of the Clayton Valley act as a barrier to the intensely cold continental arctic air masses. However, on occasion, a cold air mass spills over these barriers and produces prolonged cold waves.

There is strong surface heating during the day and rapid nighttime cooling due to the dry air, resulting in wide daily ranges in temperature. After hot days, the nights are usually cool. The average range between the highest and the lowest daily temperatures is approximately 30° to 35°F. Daily ranges are usually larger in summer than the winter. Summer temperatures above 100°F occur rather frequently. Humidity is usually low.

Nevada lies on the eastern side of the Sierra Nevada Range, a mountain barrier that markedly influences the climate of the state. One of the greatest contrasts in precipitation found within a short distance in the United States occurs between the western slopes of the Sierras in California and the valleys just to the east of this range. The prevailing winds are from the west, and as the warm moist air from the Pacific Ocean ascends the western slopes of the Sierra Range, the air cools,


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condensation takes place, and most of the moisture falls as precipitation. As the air descends the eastern slope, it is warmed by compression, and very little precipitation occurs. The effects of this mountain barrier are felt not only in the west but throughout the state, with the result that the lowlands of Nevada are largely desert or steppes. The valley floor of Clayton Valley is estimated to receive 7.6 to 12.7 centimeters (cm) (3 to 5 inches) of average annual precipitation while the highest mountain elevations are estimated to receive up to 38.1 cm (15 inches) of average annual precipitation (Rush, 1968).

Monthly average evaporation rates vary seasonally. In the warmer summer months, evaporation rates are as high as 15.2 cm (6 inches) per month. In the cooler winter months, evaporation is less than 1.3 cm (0.5 inches) per month. Annual evaporation for Silver Peak is approximately 89 cm per year.

4.4Infrastructure Availability and Sources

Albemarle owns and operates two freshwater wells located approximately 2 mi south of Silver Peak, near the Esmeralda County Public Works (ESCO) fresh water well that provides process water to the boilers, firewater system and makeup water for process plant equipment. The ESCO well provides potable water for the project.

Electricity for the Project is provided by NV Energy. Two 55 kilovolt (kV) transmission lines feed the Silver Peak substation. One line connects to the Millers substation NE of Silver Peak and the other line connects to Goldfield to the east through the Alkali substation. A 55 kV line continues south from the Silver Peak substation to connect to the California power system.

The majority of the personnel who work at Silver Peak live locally in the communities of Silver Peak, Tonopah, and Goldfield, with the majority living in Tonopah. Albemarle has company housing and a camp area for recreational vehicles or campers in Silver Peak. Others travel to work from other regional communities. Tonopah is the closest community with full services to support the Project.

Materials, supplies, and services are available locally from Tonopah. Other supplies, materials, and services are available from regional sources including Las Vegas, Reno, and Salt Lake City.


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5History

5.1Previous Operations

Albemarle and its predecessors have operated the lithium brine production facility at Silver Peak, Nevada, on a continuous basis since the mid-1960s. The array of production wells is complex because lithium brines are extracted from six different aquifer systems. The six aquifers have been sequentially brought online over the 50 plus years of operation.

The extended operating period of the mine has provided an opportunity for long term collection of data on brine levels and produced brine volumes and grades.

The aquifers in Clayton Valley have been the source of lithium for the Silver Peak operation since the mid 1960's through the development and operation of production wells. The aquifers that have provided the lithium bearing brines are very dynamic systems that have been classified into six different confined and semi-confined aquifer systems. They include the Main Ash Aquifer (MAA), Salt Aquifer System (SAS), Lower Ash System (LAS), Marginal Gravel Aquifer (MGA), Tufa Aquifer System (TAS) and Lower Gravel Aquifer (LGA). Throughout the history of the in situ mining operations, all of these aquifers have played important roles in the lithium brine resource, with the MAA being the most developed and extensively exploited aquifer system over the years.

Since the MAA was the primary aquifer system developed over the first half of the mine's history, the SPLO operation assumed that the lithium concentration decline/regression trend was predominantly represented by the MAA. Any other aquifer systems being exploited were considered supplemental, and only provided a subordinate influence in the lithium concentrations. The general composite lithium concentration decline/regression trend line equation, developed from the historical data, would then be used to project out approximately 15 years to estimate the lithium concentrations based on similar production rates from the wellfield. In the past, this method has been fairly accurate in providing conservative estimates of the longevity of the in situ mining operation before the economic lithium concentration limit was reached from the brine production.

As new aquifer systems were discovered and exploited, the number of wells developed in the MAA started to decline, bringing about a less accurate ore reserve calculation each time. By 2008, only 42% (16) of the wells in the wellfield were producing from the MAA. The MGA, LAS, and LGA also generated 42% of the wellfield wells during that time.

SPLO timeline as follows:

•1912: Sodium & potassium brine discovered in Clayton Valley, NV

•1936: Leprechaun Mining secures first mining and milling water rights

•1950s: Leprechaun Mining discovers lithium in groundwater

•1964s: Foote Mineral Co. acquires land in Clayton Valley

•1966: Lithium mining operations begin

•1967: Lithium carbonate first produced

•1981: US Federal Court of Claims determines that lithium is locatable

•1988: Cyprus Amax Minerals acquires Foote Mineral

•1991: BLM acknowledges that Cyprus has the right to mine lithium within the patented area

•1998: Chemetall Purchases Cyprus Foote Mineral Co.


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•2004: Rockwood Specialties Group buys Chemetall Foote Corp.

•2015: Albemarle buys Rockwood Lithium, Inc.

5.2Exploration and Development of Previous Owners or Operators

As noted above, Silver Peak has been mined/pumped for over 50 years and features an extensive exploration and operational history. Exploration work has included drilling (rotary, reverse circulation, and diamond core), core and brine sampling, geological mapping, geophysics.

Development work has generally included construction activities related to the evaporation ponds and pumping wellfield.


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6Geological Setting, Mineralization, and Deposit

6.1Regional Geology

The SPLO is located in Clayton Valley, Nevada. The structural geology that forms Clayton Valley, and principal faults within and around the valley, are influenced by two continental-scale features:

•The Basin and Range province

•Walker Lane fault zone

The valley is located within the Basin and Range province, which extends from Canada through much of the western United States and across much of Mexico. It encompasses virtually all of Nevada. The Province is characterized by block faulting caused by extension and subsequent thinning of the earth’s crust. Especially in Nevada, this extensional faulting forms a region of northeast-southwest oriented ridges and valleys. This faulting is responsible for the overall horst and graben structure of Clayton Valley.

The timing of major extension periods varies throughout the province. In eastern Nevada, highly extended terrains were formed during the Oligocene epoch (23 to 34 million years ago). During this period, the mountain blocks shifted, tilted, and rose along major and minor fault lines relative to valley blocks, which dropped. The dropped valleys became the focal locations for enhanced accumulation of sediments from the surrounding mountains. Closed basins like Clayton Valley became accumulation points for clastic sediments and evaporites as water accumulated in the low areas of the basins and then evaporated. The Basin and Range province is also characterized by volcanic activity caused as the thinning of the crust allowed magma to rise to the surface.

In southern Nevada, the structural features of Basin and Range formation were further influenced by the Walker Lane fault zone. The Walker Lane accommodates displacement transferred inland from the margin between the Pacific and North American plates (Figure 6-1). This transfer results in a set of northwest transcurrent faults that are estimated to account for between 20 and 25% of the relative motion between the two plates. As a result of being in this transition zone, Clayton Valley and areas to the northwest and southeast are situated in a complex zone of deformation and faulting.


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Source: Lindsay, 2011

Figure 6-1: Configuration of the Basin and Range Province and the Walker Lane Fault Zone, Relative to the Nevada Border

Geology around Clayton Valley is shown in Figure 6-2. The oldest rocks in the vicinity of Clayton Valley are of Precambrian age, and they are conformably overlain by Cambrian and Ordovician rocks. (Davis et al., 1986). Newer rocks, which still pre-date the Basin and Range formation, include Paleozoic marine sediments and Mesozoic intrusive rocks.

Tertiary volcanic rocks in the area originated from two volcanic centers. The Silver Peak Center was primarily active from 4.8 to 6 million years ago, and a center at Montezuma Peak was active as long as 17 million years ago. Tertiary sedimentary rocks are exposed around Clayton Valley to the west (Silver Peak Range), north (Weepah Hills) and low hills to the east. All these rocks are included in the Esmerelda Formation and include sandstone, shale, marl, breccia, and conglomerate. They are intercalated with volcanic rocks. These rocks were apparently deposited in several Miocene-era basins (Davis et al., 1986).


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Figure 6-2 (from Zampirro, 2004) shows the major faults in the vicinity of Clayton Valley. Mapping by Burris includes representation of faults that are more limited in extent, as well as age and degree of certainty in delineation (Burris, 2013). Zampirro (2004) indicates the majority of basin drop and displacement has occurred at the Angel Island and Paymaster Canyon faults along the southeastern edge of the basin. He also suggests these faults are a barrier to flow into the basin and they preserve brine strength by preventing freshwater inputs. In addition, Zampirro suggests the Cross Central Fault acts as a barrier to north-south flow across the playa, as inferred by lithium mapping.

Source: IESE, 2011, Zampiro, 2004

Figure 6-2: Generalized Geology of the Silver Peak Area


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6.2Local and Property Geology

From GWI, 2016:

Physical features in the vicinity of Clayton Valley are shown in Figure 6-3, from Davis et al. (1986). The central part of the valley contains the flat-lying playa, which is approximately 10 mi long, 3 mi wide and 32 mi2 in area (Meinzer, 1917). The playa surface is at an elevation of 4,270 ft above sea level, which is lower than both the Big Smoky Valley to the northwest and the Alkali Spring Valley to the northeast. The valley itself is formed by surrounding ridges and elevated areas including the following, with reference to Figure 6-3:

•Weepah Hills to the north (maximum elevation 8,500 ft. at Lone Mountain)

•Paymaster Ridge and Clayton Ridge to the east; these ridges separate Clayton Valley from Alkali Spring Valley, located to the northeast

•The Montezuma Range (maximum elevation 8,426 ft. at Montezuma Mountain) is located a few km east of Clayton Ridge

•Palmetto Mountains to the south

•Silver Peak Range to the southwest and west (maximum elevation more than 9,000 ft.)

•An elevated zone of alluvium defines Clayton Valley to the northwest, and is the basis for separating Clayton Valley from Big Smoky Valley, located to the northwest and north

•Between the flat-lying playa and the various ridges shown on Figure 6-3, there are relatively gentle slopes composed of alluvium, which extend onto the playa to varying degrees. The alluvial slopes are broadest to the southwest.

•The flat playa surface is disrupted by several bedrock mounds (bedrock “islands”), Goat and Alcatraz Islands, in the western part of the valley that rise over 300 ft above the playa surface.


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Source: Davis and Vine, 1986

Figure 6-3: Major Physiographic Features that Form Clayton Valley


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6.2.1Geology of Basin Infill

Davis et al. (1986) indicates the basin deposits are best understood in terms of deposition in extended climatic periods of relatively high and low precipitation (pluvial and inter-pluvial). The wetter periods saw deposition of fine-grained materials (muds) in the valley center in a lake environment, grading out to fluvial and deltaic sands and muds, and then to beach sands and gravels on the valley margins. Lower energy deposits dominated in the drier periods, with deposition of muds, silt, sand and evaporites in the center of the basin, with a relatively sharp transition to higher energy sand and gravel alluvial deposits on the boundary. The surficial geology of Clayton Valley is shown on Figure 6-4. The alluvial deposits at the surface along the boundary of the valley tend to contain fresh water and are not considered a lithium bearing unit for purposes of the mineral deposit.

Davis and Vine (1979) suggest that throughout the Quaternary, the northeast arm of the playa was the primary location of subsidence and, therefore, of deposition. They suggest the occurrence of thick evaporite layers and muds are indicative of the lake drying up during the low precipitation periods. They also note the lake in Clayton Valley was likely shallow, relative to historic lakes in other Great Basin valleys, which are estimated to be as deep as 650 ft.

Tuff and ash beds interbedded in the basin infill materials indicate an atmospheric setting of pyroclastic material associated with large-scale volcanic eruptions along the western coast of the continent. Zampirro (2005) suggests the most likely source of the primary air falls and re-worked ash deposits is the Long Valley caldera located approximately 100 miles northwest of Clayton Valley with the main eruption period occurring 760,000 years before present. The ash beds of the Lower Aquifer System (LAS) represent re-sedimented ash-fall associated with multiple, older volcanic events (Davis and Vine, 1979). Table 6-1 lists the different hydrogeologic units present in Clayton Valley. A simplified stratigraphic column of the hydrogeologic units listed in Table 6-1 is presented in Figure 6-3.

Table 6-1: Summary of Hydrogeologic Units


Hydrogeologic Unit	Description	Character
1	Surficial Alluvium	Aquifer
2	Surficial/Near Surface Playa Sediments	Aquitard
3	Tufa Aquifer System (TAS)	Aquifer
4	Upper Lacustrine Sediments	Aquitard
5	Salt Aquifer System (SAS)	Aquifer
6	Intermediate Lacustrine Sediments	Aquitard
7	Marginal Gravel Aquifer (MGA)	Aquifer
8	Intermediate Lacustrine Sediments	Aquitard
9	Main Ash Aquifer (MAA)	Aquifer
10	Lower Lacustrine Sediments	Aquitard
11	Lower Aquifer System (LAS)	Aquifer
12	Basal Lacustrine Sediments	Aquitard
13	Lower Gravel Aquifer (LGA)	Aquifer
14	Bedrock	Base of Playa Sediment

Source: SRK, 2021


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Source: WSP, 2022

Figure 6-4: Stratigraphic Column for the Silver Peak Site

Continued basin expansion during and after deposition resulted in normal faulting throughout the playa sedimentary sequence.


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Source: SRK, 2021; Nevada Bureau of Mines and Geology, University of Nevada, Reno, 2020

Figure 6-4: Surficial Geology in Clayton Valley


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6.3Mineral Deposit

The lithium resource is hosted as a solute in a predominantly sodium chloride brine, and it is the distribution of this brine that is of relevance to this report. As such, the term ‘mineralization’ is not wholly relevant, as the brine is mobile and can be affected by pumping of groundwater, and by local hydrogeological variations . Davis et al. (1986) suggest that the current levels of lithium dissolved in brine originate from relatively recent dissolution of halite by meteoric waters that have penetrated the playa in the last 10,000 years. They suggest that the halite formed in the playa during the aforementioned climatic periods of low precipitation and that the concentrated lithium was incorporated as liquid inclusions into the halite crystals. They are not specific about the ultimate source of the lithium.

Zampirro (2004) points to the lithium-rich rhyolitic tuff on the eastern margin of the basin as a possible source of the lithium in brine (see Figure 6-2). In this regard, he agrees with previous authors (Kunasz, 1970; Price et al., 2000). He also notes the potential role of geothermal waters, either in leaching lithium from the tuff, or transporting lithium from the deep-seated magma chamber that was the source for the tuff.

In evaluating results from isotopic analysis of water and brine samples from throughout Clayton Valley, Munk et al. (2011) identified a complex array of processes affecting brine composition, depending on location. For brine from the Shallow Ash System, they identified a process that was consistent with that suggested above by Davis et al. (1986). Their results support a process whereby lithium was co-concentrated with chloride and then trapped in precipitated sodium chloride (halite) crystals.

However, in brine samples from other locations they found evidence that lithium did not co-concentrate with chloride, and that it was introduced to the brine at levels that were already elevated. Their results were consistent with lithium leached from hectorite (a lithium-bearing clay mineral), and they identified two possible mechanisms for accumulation in the basin. The first process involves contact between water and hectorite to the east of the basin, with subsequent transport into the basin. The second involves leaching of hectorite within the basin deposits, where it formed through alteration of volcanic sediments.

Previous work at the Site and in Clayton Valley has resulted in the definition of a six lithium-bearing aquifer system (Zampirro, 2003), as described below from depth to surface. Figure 6-5 depicts a cross-section created by SRK based on its updated geological model.

LGA

The LGA is the deepest aquifer and consists of gravel with a sand and silt matrix interlayered with clean gravel. It is considered alluvial material formed from the progradation of alluvial fans into the basin. Gravel clasts are limestone, dolomite, marble, pumice, siltstone, sandstone. Zampirro (2003) reports thicknesses from 25 to over 350 ft thick; however, the base of the LGA is rarely reached in drill logs. Because few boreholes penetrate to this unit, the thickness of the LGA is a source of uncertainty.

LAS

This unit consists of air-fall and reworked ash, likely from multiple volcanic sources (Davis and Vine, 1979). The individual ash beds within the LAS are variably continuous and can occur as lenses or discontinuous beds and extensive units. Zampirro (2003) reports that this unit ranges from 350 to


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1,000 ft below ground surface. It is interpreted to be moderately continuous north of the Cross Central Fault. An inferred origin for some of the thinner lenses may be as pluvial events carrying reworked ash possibly from surrounding highland areas into the lake environment. Permeability in the LAS is limited due to narrow lenses of ash of lesser continuity.

MAA

This unit consists of air-fall and reworked ash. Particles range in size from submicroscopic to several inches or more (ash to pumice). The Long Valley caldera eruption and ash from the Bishop Tuff (760,000 years b.p.) is presumed to be the source of the MAA. Zampirro (2003) reported thicknesses of 5 to 30 feet (ft) and the depth to MAA ranges from 200 ft in the southwest to over 750 ft in the northeast. The MAA is considered a marker bed because of its continuity throughout the northeastern part of the playa.

MGA

The sediments of this unit are silt, sand, and gravel. The MGA is interpreted to be alluvial fan deposits along the east-northeast trending faults (Angel Fault and Paymaster Fault) where the majority of basin drop has occurred (see Figure 6-2). Gravels were presumed to erode from the bedrock in the footwall of the fault (Zampirro, 2003). The faults are interpreted to act as hydraulic barriers between the brines and freshwater.

TAS

The TAS lies in the northwest sector of the playa. It consists of travertine deposits, likely from either (a) subaqueous vents that discharged fluid into the ancient lake, or (b) surficial hot spring terraces composed of CaCO3. Limited drill holes indicate ring-like tufa or travertine formation (Zampirro, 2003).

SAS

The SAS lies in the northeastern portion of the playa coincident with the lowest point of the valley. The SAS was formed by deposition in an arid lake and precipitation of salts (evaporites), primarily halite, from ponded water. It Includes lenses of salts from fractions of an inch to 70 ft in thickness with interbeds of clay, some silt and sand with minor amounts of gypsum, ash and organic matter. Some dissolution caverns are present, which can develop into sinkholes when pumped. Salt likely precipitated in lowland standing water by concentration of minerals through evaporation. Deeper salt beds are more compact.


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Source: SRK, 2021

Figure 6-5: Cross-Sections through the Silver Peak Property (W-E and SW-NE)


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7Exploration

7.1Exploration Work (Other Than Drilling)

The primary mechanism of exploration on the property has been drilling, mainly production wells, for the past 50 years. Additionally, other means of exploration, such as limited geophysics, have also been applied over the years (GWI, 2017).

For the purposes of the resource and reserve estimate in this report, it is SRK’s opinion that active brine pumping, exploration drilling, and geophysical surveys provide the most relevant and robust exploration data for the current mineral resource estimation. Historical brine pumping and sampling are the most critical of the non-drilling exploration methods applied to this model and mineral resource estimation, as detailed in Section 11 of this report.

The area around the current SPLO has been mapped and sampled over several decades of modern exploration work. While other nearby exploration targets have been identified and developed over the years, they are not included in the mineral resources disclosed herein and are not relevant to this report.

Previous exploration at the Property was completed by Rodinia in 2009 and 2010 and by Pure Energy in late 2014 and early 2015. The current phase of exploration by PEM includes work conducted from late 2015 through June 15, 2017. The total work program completed at the Property to date has Site data collection campaigns included various geophysical methods for both surface and drillhole which included the following:

•Transient Electromagnetic (TEM)

•Controlled source electromagnetic and audio-frequency magnetotellurics (CSEM and CSAMT)

•Resistivity and induced polarization (IP)

•Gravity

•Seismic reflection

•Borehole nuclear magnetic resonance (BMR/NMR)

Recent geophysical surveys include a program conducted in the summer of 2016 consisting of three seismic surveys in the southern and central portions of the Albemarle claims. Hasbrouck Geophysics Inc. collected and processed the seismic data and Dr. LeeAnn Munk (University of Alaska Anchorage) provided geologic interpretations. Dr. Munk’s geologic and aquifer top interpretations were provided to GWI and MSI on October 18, 2016.

7.1.1Significant Results and Interpretation

SRK notes that this property is not at an early stage of exploration, that results and interpretation from exploration data is supported in more detail by extensive drilling and active pumping from production wells.

7.2Exploration Drilling

Drilling at Silver Peak has been ongoing for over fifty years. Drilling has been primarily for production wells with limited drilling dedicated to exploration of other areas within the claims.


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7.2.1Drilling Type and Extent

Drilling methods during this time include cable tool, rotary, and RC with the results of geologic logging and brine sampling being used to support the geological model and mineral resource. The drill hole database has been compiled from several contracted drilling companies. The original cable tool drilling dates back to 1964 and the most current drilling in the database is as recent as 2019. Drilling by SPLO has been conducted for both exploration and production wells. A breakdown of the number of exploration and production wells with total meters drilled is shown in Table 7.1. 182 of the production wells had pumping records. It is SRK’s understanding that several factors contributed to a well not being used for production after being drilled: some did not meet SPLO’s standards (concentrations too low or too many solids in the brine) or the drilling contractor did not meet the agreed upon construction requirements, so the well was abandoned and another drilled.

Table 7.1: Drill Campaign Summary


Primary Purpose	# Holes Drilled	Total Meters Drilled1
Exploration	160	more than 28,000
Production	258	more than 37,000

1 Total depth of many early drillhole was not recorded

Source: SRK, compiled from Albemarle records, 2021

Historical Drilling

Between January 1964 and December 2019, 182 production wells have been used to extract brine from within the current Albemarle claims. Early on, the production wells were drilled to primarily target the MAA unit. Records for these early wells often include the target aquifer but do not always include the lithology observed during drilling nor the construction information for the well. Over time, as more units were discovered, production wells were added to extract brine from those units. The number of production wells per target aquifer are listed in Table 7.2.

Table 7.2: Production Well Target Aquifers


Target Aquifer			# Holes Drilled
MAA			94
LAS			23
SAS			22
TAS			7
LGA			5
MGA			3
MAA/LAS			11
MGA/MAA			9
LAS/LGA			6
SAS/MAA			2

Source: SRK, 2021

The exploration and production wells drilled for the project are shown in Figure 7-1.


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Source: SRK, 2021

Figure 7-1: Property Plan Drill Map


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2017 Exploratory Drilling

Following recommendations from the GWI/MSI CM Report (2016a), SPLO drilled five deep exploratory coreholes (exploration wells) to evaluate both the hydrogeologic conditions and the groundwater chemistry of the deeper zones in the basin. The five coreholes include EXP1, EXP2, EXP3, EXP4, and EXP5. The five coreholes were equipped with vibrating wirelines to enable future monitoring of brine piezometric levels at depth. These wells were strategically located to collect depth-specific brine samples and to verify results of seismic surveys conducted in 1981 and 2016 (Munk, 2017). Locations of the five EXP wells are shown on Figure 7-2.


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Source: SRK, 2021

Figure 7-2: Location of 2017 Exploration Boreholes for the SPLO


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2020 Drilling

SPLO drilled four new production wells were drilled during 2020. Geology, water levels, and brine chemistry were evaluated as part of the program. The new wells are located in the northeastern and southeastern areas of mine property (Figure 7-3). A summary of the completion information for the new wells is presented in Table 7.3.

Table 7.3: New 2020 Production Wells


Well ID	Easting (m)	Northing (m)	Aquifer	Top of Screen (m bgs)	Bottom of Screen (m bgs)
3	450,206	4,177,276	MAA	112	163
8	456,119	4,183,602	MGA	47	111
15	448,350	4,179,530	MAA	70	107
22	455,303	4,185,184	TUFA	176	188

Abbreviations: m = meters, bgs = below ground surface

Source: SRK, 2021


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Source: SRK, 2021

Figure 7-3: New 2020 Production Wells


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7.2.2Sampling

Historical Sampling

The majority of samples collected historically were collected from the production wells that were active during that time period. Samples were collected from sampling ports located near the wellhead of each production well. Figure 7-4 shows results of the historical samples collected from the production wells since pumping started in 1966. The different colors represent assay results from the different production wells over time. These samples were used for calibration of the numerical flow and transport model but were not used for development of the resource model. Since the historical samples were analyzed on-site, SRK chose to use samples analyzed at an independent laboratory for the resource estimate.

Source: Compiled by SRK, 2021

Figure 7-4: Lithium Concentrations from Historical Production Well Samples

2017 Exploration Program Sampling

During the 2017 exploration drilling program, water and/or brine samples were collected with the IPI wireline packer system. Depth specific samples were collected in each borehole. The goal was to collect samples in fluid bearing zones at least 2 to 3 ft thick. Duplicate samples were collected to allow for analysis by both the SPLO lab and SGS lab. These samples provided knowledge of lithium concentrations in the deeper zones of the basin. These lithium concentrations were utilized in SRK’s current resource estimate analysis.


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2020 Sampling

Per SRK’s request, samples were collected from the active production wells during August 2020. In total, 46 wells were sampled. Duplicate samples were collected to allow for analysis by both the SPLO lab and ALS labs. The 2020 samples were used for both SRK’s current resource estimate and for verification of the historical samples analyzed by the SPLO lab. 2020 Sampling locations are shown on Figure 7-5.

Source: SRK, 2020

Figure 7-5: 2020 Sampling Locations

7.2.3Drilling, Sampling, or Recovery Factors

SRK is not aware of any material factors that would affect the accuracy and reliability of any results from drilling, sampling, and recovery.

7.2.4Drilling Results and Interpretation

The drilling supporting the MRE has been conducted by a reputable contractor using industry standard techniques and procedures. This work has confirmed the presence of lithium in the brine of Clayton Valley. The database used for this technical report includes 414 holes drilled directly on the Property, 160 exploration holes and 254 production wells. Four new production wells were drilled by SPLO during 2020 bringing the total number of production wells to 258. Geology, water levels, and brine chemistry were evaluated as part of the program. Drillhole collar locations, downhole surveys, geological logs, and assays have been verified and used to build a 3D geological model and in grade interpolations. Geologic interpretation is based on structure, lithology, and alteration as logged in the drillholes.

In SRK’s opinion, the drilling operations were conducted by professional contractors using industry best practices to maximize representativity of the core. SRK notes that the core was handled,


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logged, and sampled in an acceptable manner by professional geologists, and that, the drilling is sufficient to support a mineral resource estimation.

In SRK’s opinion, historical sampling was conducted by trained staff or consultants using best practices to ensure collection of samples representative of the brine being extracted by the production wells and of the brine encountered at depth during drilling of the 2017 exploration program. It is also SRK’s opinion that the 2017 exploration well sampling and the 2020 production well sampling are sufficient to support a mineral resource estimation.

7.3Hydrogeology

As described above, Clayton Valley contains six primary lithium-bearing aquifers (TAS, SAS, MGA, MAA, LAS, and LGA). The remaining sediments in the basin are lacustrine sediments or shallow alluvial sediments on the basin margins. Groundwater generally flows from the basin boundaries toward the center of the basin. Pumping via production wells to extract lithium from the brine aquifers has been ongoing for over 50 years.

Hydraulic Conductivity

Various pumping tests have been conducted during the historical operations period to evaluate the permeability of each aquifer unit. These results were reviewed and provided initial values for use in the numerical groundwater flow and transport model. Table 7.4 provides a summary of the statistics about the historical testing.

Table 7.4: Summary of Pumping Tests at Silver Peak


Tested Aquifer(s)	Number of Tests	Minimum (m/d)	Maximum (m/d)	Arithmetic Mean (m/d)	Geometric Mean (m/d)	Median (m/d)
LAS	11	0.02	3.0	0.6	0.3	0.2
LAS/LGA*	3	0.05	3.0	1.8	1.3	---
MAA	10	1.1	14	5.8	4.6	6.2
MAA/LAS*	2	0.1	0.1	0.1	0.1	---
MGA/MAA*	3	0.1	6.4	6.2	6.2	---
MGA	4	1.3	1.3	1.3	1.3	---
TAS	4	46	70	59	59	61
SAS	2	0.1	0.4	0.2	0.2	---

Abbreviations: m/d = meters per day

Notes: * Some pumping tests were conducted in wells screened across multiple aquifers

Source: SRK, 2020

Specific Yield

Specific yield (Sy), or drainable porosity, has not been directly tested or analyzed by Albemarle in Clayton Valley. Literature values of specific yield for the different alluvial sediment types present in the basin were reviewed and are shown in Table 7.5. For improved defensibility of the model and of the resource estimate, a value between the mean and the minimum was used for each aquifer unit.


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Table 7.5: Summary of Literature Review of Specific Yield


Hydrogeologic Unit	Description	Character	Source	Type	Minimum (%)	Maximum (%)	Mean (%)	Number of Analyses	Drainable Porosity/Specific Yield (Resource Model) (%)
1	Surficial Alluvium	Aquifer	Johnson, 1967	Medium Sand	15	32	26	17	20
			Morris & Johnson, 1967	Medium Sand	16.2	46.2	32	297
			Fetter, 1988	Medium Sand	15	32	26	---
2	Surficial/Near Surface Playa Sediments	Aquitard	Johnson, 1967	Clay	0	5	2	15	1
			Morris & Johnson, 1967	Clay	1.1	17.6	6	27
			Fetter, 1988	Clay	0	5	2	---
3	Tufa Aquifer System (TAS)	Aquifer	Morris & Johnson, 1967	Limestone	0.2	35.8	14	32	7
4	Upper Lacustrine Sediments	Aquitard	Same range as Surficial/Near Surface Playa Sediments						1
5	Salt Aquifer System (SAS)	Aquifer	Johnson, 1967	Clay	0	5	2	15	1
			Morris & Johnson, 1967	Clay	1.1	17.6	6	27
			Fetter, 1988	Clay	0	5	2	---
			LAC 43-101	Salt	0	5
6	Intermediate Lacustrine Sediments	Aquitard	Same range as Surficial/Near Surface Playa Sediments						1
7	Marginal Gravel Aquifer (MGA)	Aquifer	Johnson, 1967	Silt	3	19	8	16	15
			Morris & Johnson, 1967	Silt	1.1	38.6	20	266
			Fetter, 1988	Silt	3	19	18	---
8	Intermediate Lacustrine Sediments	Aquitard	Same range as Surficial/Near Surface Playa Sediments						1
9	Main Ash Aquifer (MAA)	Aquifer	Morris & Johnson, 1967	Tuff	2	47	21	90	11
10	Lower Lacustrine Sediments	Aquitard	Same range as Surficial/Near Surface Playa Sediments						1
11	Lower Aquifer System (LAS)	Aquifer	Johnson, 1967	Sandy Clay	3	12	7	12	5
12	Basal Lacustrine Sediments	Aquitard	Same range as Surficial/Near Surface Playa Sediments						1
13	Lower Gravel Aquifer (LGA)	Aquifer	Johnson, 1967	Medium Gravel	13	26	23	23	18
			Morris & Johnson, 1967	Medium Gravel	16.9	43.5	24	13
			Fetter, 1988	Medium Gravel	13	26	23	---
14	Bedrock	Base of Playa Sediment

Source: SRK, 2020


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8Sample Preparation, Analysis and Security

8.1Sample Collection

Silver Peak trained staff regularly collect brine samples in bottles at the wellhead and take them to their internal laboratory on site.

The collection of brine from operating production wells is performed monthly. For those wells not in operation, samples are collected once the well is operational. When a well stops operating, samples are no longer collected. The on-site laboratory analyzes monthly samples of brine from each well to determine average wellfield lithium values. Lithium values are plotted monthly to check for variation in brine being extracted by each well and by the wellfield.

•Sampling Procedure:

◦Samples are collected over no more than a two-day period.

◦Samples are collected from all operating wells.

–Collect monthly sample bottles from lab or at liming.

–All bottles are labeled with the appropriate well name.

–While checking wells, the pond operator will collect a sample at each active well listed on the Weekly Well Sheet.

–Well samples:

•Open sample valve to rinse sand and built-up salt out of the sample valve.

•Open sample valve all the way to wash out the valve and elbow.

•Empty old brine from properly labeled sample bottle.

•Rinse the bottle with brine from the well using the valve to control the flow.

•Do not turn off the valve in the process until bottle is full.

•Cap the bottle and put back in tray.

•Check off the well number on the Weekly Well Sheet.

•Put away all tools used and proceed to next well.

•Repeat above steps for each active well.

–When all samples of operating wells are collected, take the samples to the lab.

–Turn in all paperwork to supervisor.

◦Samples should be collected following a down for repair status (DFR).

◦Once well is restarted, samples should be collected for a period of three days.

◦Samples are to be taken to the lab with the morning pond samples.

Brine samples are securely stored inside locked containers on the secured Albemarle site.

8.2Sample Preparation, Assaying and Analytical Procedures

At the on-site laboratory, brine samples collected from the ponds and wells are run as needed per the department supervisor and are listed below:

•Ponds - Li, Ca, Mg, S, Na, and K are run when requested

•Wells - Li, Ca, Mg, S, Na, and K


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All sample preparation and analytical work is undertaken at the operation’s on-site laboratory under the following procedures:

•Pond Samples

◦Filter each sample using a Whatman #2 filter.

◦Tare a plastic 100 mL volumetric flask on an analytical balance.

◦Using a plastic transfer pipet, add ~0.2g of sample to the flask.

◦Record the sample weight.

◦Using a volumetric pipet or a bottle-top dispenser, add 2 mL of concentrated HCl to the flask.

◦Dilute the flask to volume with DI water and mix thoroughly.

•Well Samples

◦Filter each sample using a Whatman #2 filter.

◦Tare a plastic 100 mL volumetric flask on an analytical balance.

◦Using a plastic transfer pipet, add ~1.0g of sample to the flask.

◦Record the sample weight.

◦Using a volumetric pipet or a bottle-top dispenser, add 2 mL of concentrated HCl to the flask.

◦Dilute the flask to volume with DI water and mix thoroughly.

Sample analysis performed by the on-site laboratory outlined below:

•Set up the instrument to run method SPICP.

•Standardize the method using standards SPICP-1, SPICP-2, SPICP-3, SPICP-4, and SPICP-5. The correlation coefficient for each element should be >0.999. The intercept for each element should be close to zero.

•Enter sample name, weight, and dilution into the Sample Information File.

•Analyze the sample by the method selected.

The on-site laboratory uses Inductively Coupled Plasma Optical Emission Spectroscopy (ICP-OES) method for the determination of lithium, sodium, potassium, calcium, magnesium, and sulfate in Silver Peak pond and well samples.

The on-site laboratory is not certified. For all EPA analysis and reporting Albemarle is required to use a certified lab; currently the certified lab Albemarle uses is - WET Lab in Sparks NV.

8.3Quality Control Procedures/Quality Assurance

The mineral resource estimated and presented herein is based solely on well sampling from the 2020 ALS suite and 2017 EXP suite analyzed by SGS. Both of these laboratories are independent of the company and are established ISO-certified. SPLO sampling is exclusively utilized for calibrating the numerical model for the estimation of reserves.

8.3.1Historical Samples – On-Site Laboratory

Operations personnel continuously collect brine samples at both wellheads and ponds. These samples are sent to the on-site laboratory for testing. Early in Silver Peak production, duplicates were taken for all brine samples collected from ponds and wells and sent to a third-party laboratory. Currently, the samples are only tested on site.


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The historical brine samples collected at pumping well heads were used for a qualitative indication of brine grade persistence over the prolonged pumping periods. They were also used quantitatively in developing the grade interpolations as input to the numerical groundwater model.

SRK notes that, while comprehensive QAQC or independent verification of sampling has not been a continuous part of the SPLO lab, that the Silver Peak operation has been producing lithium from brines for 50 plus years. Production has continuously been consistent with reserve planning from the brine reservoir. The QP notes that this continuous production and reasonable performance has significant weight in the confidence determination for the current mineral resource and reserve. Based on this, SRK considers the supporting data and information of sufficient quality to support Measured, Indicated, and Inferred mineral resources.

8.3.22017 EXP Campaign – SGS Laboratory

As described in Section 7.2.2, during the 2017 EXP drilling campaign (consisting of five drillholes, EXP1 through EXP5) brine samples were collected at depth specific intervals. Duplicate samples were collected to allow for analysis by both the SPLO lab and SGS labs. A total of 56 samples were collected, including seven duplicates that were sent to the SPLO on-site laboratory for comparison.

Figure 8-1 shows the comparison between the original sample results from the SGS Laboratory vs. the assay results from duplicates tested at the SPLO on-site laboratory. The difference in Li concentration results is +-2% at a maximum in some samples.

Source: SRK, 2021

Figure 8-1: Comparison of Duplicates Results – 2017 EXP Drilling Campaign

The field duplicate data for lithium at both SGS and SPLO confirms that the brine samples are homogeneous, and that the data from the EXP campaign can be considered to be representative.


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8.3.32020 Sampling – ALS Laboratory

During 2020, Albemarle collected, on SRK’s behalf, brine samples from 46 wells that were sent to ALS Laboratory in Vancouver, Canada for testing. Duplicates were collected in every well and analyzed at the SPLO laboratory for comparison, see Section 9.1 for details on this comparison.

8.4Opinion on Adequacy

SRK has reviewed the sample preparation, analytical, and Quality Assurance/Quality Control (QA/QC) practices employed by consultants for samples analyzed by SGS lab and by Albemarle for samples analyzed by ALS lab to support the resource estimate. SRK has also reviewed the sample preparation, analytical, and the QA/QC practices employed by Albemarle for samples analyzed by the on-site SPLO lab to support calibration of the numerical model. SRK notes the following:

The data supporting the mineral resource and reserve estimates at Silver Peak have not been fully supported by a robust QA/QC program. This potentially introduces a risk in the accuracy and precision of the sample data. However, this risk has been mitigated through consistency of results from recent samples analyzed by both an independent third-party laboratory (ALS) and the on-site SPLO lab. The risk has also been mitigated through the inherent confidence derived from 54-year history of consistent feed to the processing plant producing LCE at Silver Peak. It is the QP’s opinion that the results are therefore adequate for the intended use in the associated estimates.


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9Data Verification

9.1Data Verification Procedures

The primary data verification process was completed through August 31, 2020. This provided SRK perspective on the analytical methodology, logging, sampling criteria, chain of custody, and other important factors as they were designed and addressed throughout data collection.

SRK advocated for collection of independent sampling to support the mineral resources based on a comparison of previous sampling results between the SPLO lab to an external lab. Silver Peak operations annually sends samples to the Western Environmental Testing (WET) Laboratory and submits the results to the U.S. Environmental Protection Agency (EPA) as part of their permit agreements. SRK compared the nearest time window of sampling from SPLO to these annual WET lab submissions for the purposes of data verification. Lithium concentrations from these samples were significantly different from lithium concentrations analyzed by the SPLO lab, as shown in Figure 9-1. Analytical methodologies utilized for the WET lab are different than those used by SPLO, and this could be a source of the differences in analysis results. Therefore, the WET lab samples were not used as part of the resource or reserve estimate analyses.

Source: SRK, 2020

Units: mg/L

Figure 9-1: Comparison of Historical Lithium Concentrations, SPLO Lab to EPA WET Lab

As described in 7.2, in August 2020, SRK requested Albemarle to collect a set of additional brine samples from the active production wells for independent verification of results from the on-site laboratory. These samples were collected in duplicates. One sample per well was sent to ALS Laboratory in Vancouver, Canada, and its duplicate was sent to the on-site Albemarle laboratory for comparison. ALS Vancouver has extensive experience with lithium analysis for both exploration and metallurgy projects.


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Brine samples were shipped to ALS, where they were received, weighed, prepared, and assayed. Sample preparation was completed using the process detailed in Table 9.1.

Table 9.1: Sample Preparation Protocol by ALS


ALS Code			Description
WEI-21			Received Sample Weight
LOG-22			Sample login – Rcd w/o barcode
SND-ALS			Send samples to internal laboratory

Source: ALS, 2020

Analysis completed by ALS focused on lithium but included a 15-element analysis package as described in Table 9.2. The associated elements and detection limits are available on the ALS website and in the analytical package catalogue.

Table 9.2: ALS Primary Laboratory Analysis Methods


Method Code	Description	Instrument
ME-ICP15	Lithium Brine Analysis – ICPAES	ICP-AES

Source: ALS, 2020

SRK visited the on-site laboratory at Silver Peak on August 18, 2020. The QP considers that the field methods and analytical procedures in this study are rigorous and appropriate for estimating resources and reserves.

The historical samples analyzed during the more than 50-year production period were not used for SRK’s current resource estimate analysis; they were used to calibrate the numerical flow and transport model developed to simulate a reserve estimate. These samples were used to ensure that the numerical model adequately represents changes in groundwater flow and lithium concentrations between 1966 and 2019. There is no way to independently verify all the historical data.

To verify the methods used by the SPLO lab, SRK requested that SPLO collect duplicate samples in August 2020 as described in Section 7.2. Percent difference between lithium concentrations for each set of samples ranged from 0.1% to 23.0% with an average of 4.7%. Lithium concentrations from samples analyzed by the on-site SPLO lab are compared to those analyzed by the ALS lab in Figure 9-2. The overall match of results between the two labs provided confidence that the analysis methods used by the SPLO lab were consistent with methods used by the external lab, ALS, and that the SPLO lab yielded results adequate for use in calibrating the numerical model. There is an apparent bias in the results from the ALS lab at concentrations larger than approximately 250 mg/L. Though this may mean that the SPLO lab is under-representing the amount of lithium in wells with concentrations larger than 250 mg/L, these do not have a material effect on their use in calibrating the numerical model. SRK has limited the impact of samples greater than 250 mg/L utilizing high yield limit restrictions in the estimation, and notes that very few samples overall greater than this value contribute to the estimation.


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Source: SRK, 2020

Figure 9-2: Comparison of Lithium Concentrations, August 2020

9.2Limitations

The primary data supporting the mineral resource estimation are drilling and brine sampling. SRK was provided analytical certificates in both locked PDF format and Excel (csv) spreadsheets for the August 2020 brine sample data used in the mineral resource estimation. Verification was completed by compiling all the spreadsheet analytical information and cross referencing with the analytical database for the project. This comparison showed no material errors but represents only the ALS portion of the sampling dataset.

All the data collected historically could not be independently verified. However, verification of the samples collected in August 2020 and analyzed by an independent lab provided confidence in the methods used and results of samples analyzed by the on-site SPLO lab.

9.3Opinion on Data Adequacy

In SRK’s opinion, the data is adequate and of sufficient quality to support mineral resource and reserve estimations. Data from SGS labs and ALS labs, independent certified labs with experience analyzing lithium, were used for developing the resource estimate. 54 years of historical sampling at production wellheads and at ponds that supported a consistent feed to the processing plant producing LCE provides additional verification of the historical data used for calibration of the numerical model.


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10Mineral Processing and Metallurgical Testing

Silver Peak is an operating mine with more than 50 years of production history. At this stage of operation, the facility relies upon historic operating performance to support its production projections and, therefore, no metallurgical testwork has been relied upon to support the estimation of reserves documented herein. In the QP’s opinion over 50 years of production history is adequate to define the recoveries and operating performances at the current level of study.


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11Mineral Resource Estimates

11.1Key Assumptions, Parameters, and Methods Used

This section describes the key assumptions, parameters, and methods used to estimate the mineral resources. The technical report summary includes mineral resource estimates, effective June 30, 2021.

The coordinate system used on this property and for this MRE is NAD 1983 UTM . All coordinates and units described herein are done in meters and metric tons, unless otherwise noted. This is consistent with the coordinate systems for the project and all descriptions or measurements taken on the project.

The Mineral Resources stated in this report are entirely located on Albemarle’s patented and unpatented mining claim property boundaries and accessible locations currently held by Albemarle as of the effective date of this report. All conceptual production wells used to estimate brine resources have been limited to within these boundaries as well. Detail related to the access, agreements, or ownership of these titles and rights are described in Section 3 of this report.

11.1.1Geological Model

In constraining the MRE, a geological model was constructed to approximate the geological features relevant to the estimation of Mineral Resources, to the degree possible, given the data and information generated at the current level of study. As a result, the model defined hydrogeological units based on geology and hydraulic properties. GWI/Matrix Solutions developed a detailed geological model to aid in both exploration and production planning. SRK revised and further developed this model to provide a basis for the MRE, in collaboration with GWI/Matrix Solutions geologists and Albemarle personnel, to leverage the site-based expertise and improve the overall model consistency.

The geological model is composed of multiple features which have been modeled to either be independent of each other or, in some cases, may depend on the results from another modeling process.

The combined three dimensional (3D) geological model was developed in Leapfrog Geo software (v5.1.1). In general, model development is based on the following:

•Interpreted Geophysical Data (historic and modern)

◦TEM

◦CSAMT

◦Seismic

◦Downhole

•Drill Hole Data

•Surface Geologic Mapping (historic and modern)

•Interpreted cross sections (historic and modern)

•Surface/downhole structural observations


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•Interpreted polylines (surface and sub-surface 3D)

In SRK’s opinion, the level of data and information collected during both the historical and modern exploration efforts is sufficient to support the geological model and the MRE.

Hydrogeological Units

The geological model within the patented and unpatented mining claims was developed from borehole logging, geological mapping, and geophysical interpretations. Outside of the mining claim boundaries the geological model was developed using geophysical interpretations, geological mapping, limited drill core data, and assumptions based on information from within the mining claim boundaries. Figure 11-2 shows the geological model domain.

Units are generalized for model purposes to those which have similar hydrogeological characteristics which may be relevant to the project and any downstream mining studies. The following hydrogeological units were modeled:

•Surficial Alluvium

•TAS

•SAS

•MGA

•MAA

•LAS

•LGA

•Lacustrine Sediments

•Bedrock

The top of bedrock is the lowest extent of the modeled aquifers. Surface outcrop maps and geophysical interpretation informed the modeled bedrock contact surface outside of the mining claim boundaries, where there are few subsurface data sources. Aquifer thickness, continuity, and extent, as defined by available data, were applied to build the geological model. The conceptual geological model presented in Section 6, above, guided the construction of the 3D volumes of the hydrogeological units). Generally, the coarse deposits that comprise the gravel aquifers occur on the basin margins, while the fine-grained deposits occur in the center of the basin. Figure 11-3 and Figure 11-4 show geological cross-sections within the geological model domain.

Structural Setting

The structural understanding within the project area is primarily inferred with the exception of the paymaster, cross central, and angle island faults (see Figure 6-2). Inferred structures are shown on Figure 11-1 generated from seismic, resistivity, and gravity surveys. Currently structures are not incorporated into the geologic model.


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Source: SRK, 2021

Figure 11-1: Structural Setting - Silver Peak

Resource Domain Model

The resource was calculated using the current claim areas 1, 2, and 3. The total surface area is 53,819,000 m2, including the aquifers and aquitards presents in the subsurface, and excluding the bedrock.


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Source: SRK, 2020

Figure 11-2: Geological Model Domain


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Source: SRK, 2020

Figure 11-3: Geological Cross Section SW - NE

Source: SRK, 2020

Figure 11-4: Geological Cross Section W–E and SW-NE

11.1.2Exploratory Data Analysis

The raw dataset of lithium concentrations is characterized by sampling at certain points along the bore hole. shows the location of the drill holes in plan view and the raw lithium data (mg/l) in the sectional view. The distribution of the information is heterogeneous across the property and is primarily focused on the southeastern margin of the playa. The plan view presented in the upper image of Figure 11-5, the differences in sample lengths and the distribution of them in elevation can


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be seen. Figure 11-6 presents the log probability plot, histogram, and statistics of the raw data of lithium.

Note: Scales in meters

Source: SRK, 2020

Figure 11-5: Drill Hole Locations in Plan View (top) and Lithium Samples in Sectional View A-A’ (bottom)


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Column	Count	Minimum	Maximum	Mean	Variance	StDev	CV
Li (mg/l)	107	0	694	137.925	11,278	106.2	0.77

Source: SRK, 2020

Figure 11-6: Summary Raw Sample Statistics of Lithium Concentration – mg/l, Log Probability and Histogram


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11.1.3Drainable Porosity

The drainable porosity or Sy in Silver Peak was estimated from literature values based on each lithology and the QP’s experience in similar deposits. The values used in the resource analysis are shown in Table 7.5.

11.2Mineral Resources Estimate

The parameters for a brine resource estimation are:

•Aquifer geometry (volume)

•Drainable porosity or Sy of the hydrogeological units in the deposit.

•Lithium concentration

Resources may be defined as the product of three parameters listed above. Silver Peak estimated resources were defined as mineral resources exclusive of mineral reserves.

Lithium concentration samples description and analysis are shown, as part of the interpolation methodology used. Block model details and validation process are also described.

11.2.1Compositing and Capping

High grade capping is normally performed where data used for an estimation are considered to be part of a different population. Capping is designed to limit the impact of these outliers by reducing the grades of outliers to some nominal value that is more comparable to the majority of the data. The capping technique is appropriate for dealing with high grade outlier values, in this case the lithium concentration. The data was verified, and hydraulic test results were analyzed including the review of high-yield outlier data to determine whether top cutting or capping was required that may bias or skew data for statistical and geostatistical analyses. The hydrogeological aspects related to this type of lithium deposit were considered. Based on the analysis of the statistical information (log-probability plot) and due to the fact that high concentration values were considered part of the same brine system and have been register along the historical production, SRK determined that no capping applied to the lithium data is required.

To limit the impact of moderate to high concentrations of lithium (not outliers) in areas with a limited quantity of data and characterized by lower concentrations of lithium, a Vulcan software tool to exclude distant high yield samples was used during the estimation. Samples with concentrations of lithium higher than 250 mg/l were limited to a radius of 2,000 m by 2,000 m by 100 m. The lithium threshold (250 m/l) was defined from the analysis of the probability plot (Figure 11-6) selecting a concentration approximately where the curve slope changes, and the values are discontinuous (87th percentile). The radius used was defined based on the visual inspection of the distribution of grades in the relevant hydrogeological units. In addition, the experimental semi-variogram shows a steady increase of the variance up to approximately 2,000 m, although it remains above the variance of the data.

Previous to the grade interpolation, samples need to be regularized to equal lengths for constant sample volume (Compositing). The raw sampling data for lithium is characterized by variable lengths and discontinuous sampling along the drill holes. Figure 11-7 presents a histogram of the raw sample lengths. Given the nature of the hydraulic sampling and the differences in lengths, SRK selected a composite length of 25 meters (m), resulting in an increasing number of composites compared with


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the number of raw sample intervals. The compositing was performed using the compositing tool in Maptek Vulcan software.

Most of the production wells extract brine from both aquifers and aquitards. Therefore, the sample collected in those wells represents the lithium concentration from both sources, however most of the brine contribution is from the aquifers. To breakdown by geology, the composites were flagged using the lithology 3D volumes (Wireframes) differentiating the aquifer and aquitard units (lacustrine sediments – LAC). In these cases, only the composites flagged as aquifers were considered.

Table 11.1 shows the comparative statistics for the raw samples and the resulting composites. In general, SRK aims to limit the impact of the compositing to less than 5% change in the mean value after compositing. A change of 4% in the mean value is observed.

Source: SRK, 2020

Figure 11-7: Histogram of Length of Samples of Lithium (mg/l)

Table 11.1: Comparison of Raw vs Composite Statistics


Data	Element	Count	Minimum (mg/l)	Maximum (mg/l)	Mean (mg/l)	Variance	StDev	CV
Samples	Lithium	107	0	694	137.9	11,278	106.2	0.77
Composites	Lithium	248	0	694	143.5	11,570	107.6	0.75

Source: SRK, 2020

11.2.2Spatial Continuity Analysis

The spatial continuity of lithium at the Silver Peak property was assessed through the calculation and interpretation of variography. The variogram analysis was performed in VulcanTM software (version 11.0.4).


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The following aspects were considered as part of the variography analysis:

•Analysis of the distribution of data via histograms

•Down-hole semi-variogram was calculated and modeled to characterize the variability

•Experimental semi-variograms were calculated to define directional variograms for the main directions defined from the fan variograms analysis though results were inconclusive

•Omnidirectional variogram was modeled using the nugget and sill previously defined

•The total sill was normalized to 1.0

The lithium drilling data are heterogeneously distributed across the property, therefore, the determination of dominant anisotropy of lithium was not possible. The QP determined an omnidirectional variogram model was preferred for the neighborhood analysis and estimation. The graphical and tabulated semi-variogram for lithium is provided in Figure 11-8 and Table 11.2 respectively.

Source: SRK, 2020

Figure 11-8: Experimental and Modeled Omnidirectional Semi-Variogram for Lithium

Table 11.2: Modeled Omnidirectional Semi-Variogram for Lithium


Variable	Rotation	Type	Co	C1	A1 X(m)	A1 Y (m)	A1 Z (m)	C2	A2 X (m)	A2 Y (m)	A2 Z (m)
Lithium	-	SPH	5%	36.5%	105	105	105	58.5%	1,235	1,235	1,235

Source: SRK, 2020

The nugget effect is 5% with maximum range at 1,235 m.

11.3Neighborhood Analysis


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appropriate value of each parameter. The slope or regression value (SOR) and kriging efficiency (KE) were used as the determining factors to optimize the kriging search neighborhood. The number of samples is a parameter evaluated with this analysis as shown in Figure 11-9.

Source: SRK, 2020

Figure 11-9: Neighborhood Analysis on Number of Samples for Lithium

The summary neighborhood parameter used for the estimation of lithium is summarized in Table 11.3.

Table 11.3: Summary Search Neighborhood Parameters for Lithium

Variable

SDIST X (m)

SDIST Y (m)

SDIST Z (m)

Rotation

Min # Composites

Max # Composites

Max # Composites per Drillhole

Lithium

4,000

200

No Rotation

Source: SRK, 2020

The block size was selected based on the data spacing and the reasonable values of slope of regression and kriging efficiency obtained from the neighborhood analysis (the blue circle on Figure 11-10). The block size selected is 500 by 500 by 50 m (X, Y, Z coordinates).


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Source: SRK, 2020

Figure 11-10: Outputs from the Block Size Optimization Analysis

11.3.1Block Model

A block model was constructed in Maptek’s VulcanTM software (version 11.0.4) for the purposes of interpolating grade and tonnage. The block model was sub-blocked along geological and mineral claim boundaries. The dimensions of the parent cell size used are 500 m for X, 500 m for Y and 50 m for Z. The minimum sub-blocks sizes used are 10 by 10 by 1 m. Grade interpolation was performed on parent cells. The block model limits were defined by the mineral claim polygons with the extents of the block model shown in Table 11.4. Blocks were visually validated against the 3D geological model and the mineral claim boundaries.

Table 11.4: Summary Silver Peak Block Model Parameters


Dimension	Origin (m)	Parent Block Size (m)	Number of Blocks	Min Sub Blocking (m)
X	433,500	500	55	10
Y	4,156,000	500	70	10
Z	-300	50	50	1

Source: SRK, 2020

The blocks were flagged with the hydrogeological units and mineral claims identifiers. Figure 11-11 presents the hydrogeological unit color coded block model.


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Source: SRK, 2020

Figure 11-11: Plan View of the Silver Peak Block Model Colored by Hydrogeological Unit (1,125 masl Elevation)

11.3.2Estimation Methodology

SRK used the composited data flagged as aquifer to interpolate the lithium grades into the block model using Ordinary Kriging (OK). A single search pass was performed with the ellipsoid of 4,000 (X) by 4,000 (Y) by 200 m (Z).

A sensitivity analysis was performed by varying the estimation method and search pass strategy (single and multiple) to compare the resultant data for validation purposes, where the expert hydrogeological criteria was considered, including the historical information of the behavior of the concentration of lithium in production drillholes. The grade estimations were completed in Maptek’s VulcanTM software (version 11.0.4) using OK, Inverse Distance weighting (ID2) and nearest neighbor (NN) estimation. SRK completed the following scenarios:

•Three-pass nested search varying the size of the ellipsoid in the Z dimension (50 and 100 m)

•One-pass search in three scenarios: 3,000 by 3,000 by 200 m, 4,000 by 4,000 by 200 m and 5,000 by 5,000 by 200 m.

SRK completed visual and basic statistical tests and elected to use the OK estimates using the 4,000 by 4,000 by 200 m ellipsoid as being most representative of the underlying data and the type of lithium deposit (Table 11.3).

Figure 11-12 through Figure 11-14 show the results of the estimation in terms of number of drill holes, number of composites, and the distances from the blocks to the composites used during the estimation. It is observed that most of the blocks were estimated with four or more drill holes and


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with eight composites. The distance between the blocks and the composites used during the estimation has an average of 1,594 m and, in most cases, distances were less than 2,000 m.

Source: SRK, 2020

Figure 11-12: Histogram of Number of Drill Holes Used to Estimate the Block Model


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Source: SRK, 2020

Figure 11-13: Histogram of Number of Composites Used to Estimate the Block Model


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Source: SRK, 2020

Figure 11-14: Histogram of Average Distance from Blocks to Composites Used in Estimation

The resource estimate excluded historic lithium concentration data (i.e., it used samples from the 2017 campaign and from the 2020 sampling verification campaign in the production wells) (Section 7.2.2). The limitation of concentration data to only the most recent periods of data was, in SRK’s opinion, the best approach to account for depletion of historic production. As the brine resource is extracted, the most significant change to the resource is a reduction in lithium concentration with a more limited reduction to in situ brine volume (the aquifer is constantly being recharged). Therefore, to represent the lithium mass available most accurately on the date of the resource (June 30, 2021), only recent lithium concentration data was utilized.

It is SRK’s opinion that the methodology used in the lithium kriging estimate is adequate and appropriate for resource model calculations.

11.3.3De-Clustering

A de-clustering cell analysis of the composites was completed to obtain de-clustered statistics for model validation purposes. Additionally, the nearest neighbor (NN) estimation of lithium was used as a spatially de-clustering method for comparative validation.


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Figure 11-15 presents the scatter plot (Li average vs Cell Size) obtained for the de-clustering analysis of the lithium composites. Ultimately, a 700 m cell size was selected to calculate de-clustered statistics. Declustering of the data results in an overall reduction in the mean, which reflects the nature of more sampling of higher concentrations of Li in brines compared to less sampling of lower concentrations. This declustered mean is considered more appropriate for validation comparisons for the data against the estimate.

Source: SRK, 2020

Figure 11-15: De-Clustering Analysis Showing Scatter Plot of Cell Size Versus Lithium Mean

11.3.4Estimate Validation

SRK performed a thorough validation of the interpolated model to confirm that the model represents the input data and the estimation parameters and that the estimate is not biased. Several different validation techniques were used, including:

•Visual comparison of lithium grades between block volumes and drillhole samples.

•Comparative statistics of de-clustered composites and the alternative estimation methods (ID2 and NN).

•Swath plots for mean block and composite sample comparisons.


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Visual Comparison

Visual validation of drilling data to estimated block grades was completed in 3D. In general, estimated block grades compared well with acceptable correlation from drilling data. Figure 11-16 shows examples of the visual validations in plan view at an elevation of 1,125 meters above sea level (masl).

Source: SRK, 2020

Figure 11-16: Example of Visual Validation of Lithium Grades in Composites Versus Block Model in Plan View (1,125 masl Elevation)

Comparative Statistics

The mean interpolated lithium values by OK shows slightly higher grade than the de-clustered data grade and the lithium grade using other alternative estimation methods. The comparison between data and the blocks is better in the areas with higher quantity of data. The interpolated lithium concentrations using ordinary kriging has a better correlation with the data and provides information about the interpolation error and quality.


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Table 11.5: Summary of Validation Statistics Composites Versus Estimation Methods (Aquifer Data)


Statistic	Mean Sample Data Li (mg/l)	Declustered Sample Data Li (mg/l)	Ordinary Kriging - Block Data (Volume Weighted) Li (mg/l)	Inverse Distance - Block Data (Volume Weighted) Li (mg/l)	Near Neighbor - Block Data (Volume Weighted) Li (mg/l)
Mean	143.7	124	109.8	107.1	104.7
Std Dev	96.8	89.6	54.4	60.7	78.4
Variance	9,379	8,031	2,955	3,690	6,153
CV	0.67	0.72	0.5	0.57	0.75

Source: SRK, 2020

Swath Plots

The swath plots represent a spatial comparison between the mean block grades interpolated using alternative methods and the de-clustered composites. Figure 11-17 presents the swath plots of Lithium in X, Y and Z coordinates. The areas of higher variability between the composites and estimates at Silver Peak occur in the areas of the deposit with lower quantity of data where lower lithium grades are observed.


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Source: SRK, 2020

Figure 11-17: Lithium (mg/l) - Swath Analysis for Silver Peak

The QP’s opinion is that the validation using visual comparison, comparative statistics, and swath plots provide a sufficient level of confidence to confirm that the model accurately represents the input data, the estimation parameters are reasonable, and that the estimate is not biased.


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11.4Cut-Off Grades Estimates

The CoG calculation is based on assumptions and actual performance of the Silver Peak operation. Pricing was selected based on a strategy of utilizing a higher resource price than would be used for a reserve estimate. For the purpose of this estimate, the resource price is 10% higher than the reserve price of $10,000/t technical grade lithium carbonate, as discussed in 16.1.4. This results in the use of a resource price of $11,000/t of technical grade lithium carbonate.

SRK utilized the economic model to estimate the break-even cutoff grade, as discussed in Section 12.2.2. Applying the $11,000/t lithium price to this methodology resulted in a break-even cut-off grade of 50 mg/L, applicable to the resource estimate.

11.5Resource Classification and Criteria

Resources have been categorized, subject to the opinion of a QP, based on the amount/robustness of informing data for the estimate, consistency of geological/grade distribution, and survey information. The resource calculations have been validated against long-term mine reconciliation for the in situ volumes. The categories of the resource model were based on the normalized variance, sample distribution, and borehole data to support the locations of aquifers and aquitards.

•Measured resources were assigned to areas with high confidence in the aquifer and aquitard geometry, and with high density of lithium samples. From the kriging distribution quality point of view, the blocks with normalized variance under 0.25 were interpreted as measured. However, using the QP’s criteria, the distribution of the measured resource was slightly adjusted considering the coverage of boreholes, distribution of lithium samples and the continuity of measured blocks in 3D (Figure 11-18).

•Classification of Indicated resources is done only for those domains with sufficient confidence in the aquifer and aquitard geometry, and sufficient density of lithium samples. These volumes are very well correlated with the blocks with normalized variance between 0.25 and 0.425. Local inherent variability in the geometry of the aquifers has been considered in this classification and has been manually limited in areas of greater concern.

•Brine hosted aquifers with no or low drill density, and no or low lithium samples, have been classified as Inferred. Inferred also corresponds to the blocks with normalized variance over 0.425.


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Source: SRK, 2020

Figure 11-18: Block Model Colored by Classification and Drillhole Locations Plan View (1,125 masl Elevation)

11.6Uncertainty

SRK considered a number of factors of uncertainty in the classification of the mineral resource.

Estimation:

•SRK notes that the data supporting the mineral resources at Silver Peak has not been fully supported by a robust program of QA/QC sample insertion or monitoring. This potentially introduces a risk in the accuracy and precision of the sample data. However, this risk has been mitigated through the use of independent third-party laboratory samples for the estimation, and the inherent confidence derived from a long consistent production history at Silver Peak.

•The lack of availability of site-specific data for Sy values results in uncertainty associated with estimates of brine volume potentially available for extraction. To mitigate this uncertainty, the values were based on literature data of similar lithology units, considering the QP’s experience in similar deposits. Additionally, there are areas with limited drill density which results in uncertainty in the geological model and lithology, which drives the Sy estimate. These areas were classified as inferred resource.

•The use of 25 m composite lengths resulted in an increased number of samples in comparison to the raw data. This is due to some of the sampling points in boreholes being


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longer than others. SRK has mitigated this uncertainty by limiting the maximum number of composites per drillhole, ensuring that (given the search ranges) that the estimation of lithium into the blocks used samples from more than one drillhole. This eliminates the risk in the Measured and Indicated areas of estimating from only the larger sample intervals during the interpolation.

11.7Summary Mineral Resources

SRK has reported the mineral resources for Silver Peak as mineral resources exclusive of reserves as well as inclusive of reserves.

Mineral Resources Exclusive of Reserves. Table 11.6 shows the mineral resources exclusive of reserves. Resource from brine is contained within the resource aquifers with the estimated reserve deducted from the overall resource. This calculation was completed by calculating total lithium (as lithium metal) projected as being pumped from the aquifer in the reserve production forecast. This quantity of lithium (as metal) was directly subtracted from the overall mineral resource estimate. Notably, the resource grade was not changed as part of this exercise. This is because the resource, exclusive of reserve, and reserve do not represent discrete areas of the resource due to the brine aquifer (i.e., the resource) being a dynamic system that moves, mixes and recharges. Therefore, the resource, after extraction of the reserve would be an entirely new resource, requiring new data and a new estimate.

As this is not practical with current data, in the QP’s opinion, it is more appropriate to keep the calculation simple and transparent and utilize this approach. Further, as the dynamic resource largely precludes direct conversion of measured/indicated resources to proven/probable reserves, in the QP’s opinion, the most reasonable and defensible approach to allocating depletion of the reserve from the resource is to deplete measured and indicated resource proportionate to their contribution to the combined measured and indicated resource. As measured resources comprise 30% of the combined measured and indicated resource, 30% of the reserve depletion was allocated to measured, with the remainder subtracted from indicated. For comparison, proven reserves comprise approximately 20% of the overall reserve (i.e., a greater proportion and quantity of measured resource is being deducted than the proportion and quantity of proven reserve produced).

Mineral Resources Inclusive of Reserves. Table 11.7 shows the brine resources inclusive of the mineral reserve. This includes all unmined/unpumped brine. Further, given the delay in the time of pumping brine to actual production of lithium being approximately two years due to the extended evaporation period, the first two years of lithium production in the economic model are sourced from brine that is in process (i.e., in the evaporation ponds). These first two years of production are included in the reserve as they are in the economic model. Therefore, SRK has also included this brine in the resource, inclusive of reserve. Silver Peak tracks the volume and concentration of brine pumped for production purposes on an ongoing basis. Therefore, to quantify this in process component of the resource, SRK summarized the prior 24 months of pumping data as the in-process resource. This component of the resource is reported at the concentration of brine pumped as this is the most reliable point of measurement. SRK classified this component of the resource as measured, given the actual quantity of brine produced was directly measured and therefore has relatively low uncertainty.


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Table 11.6: Silver Peak Mineral Resource Estimate, Exclusive of Mineral Reserves (Effective June 30, 2021)

Measured Resource

Indicated Resource

Measured + Indicated Resource

Inferred Resource

Contained Li (Tonnes x 1000)

Brine Concentration (mg/L Li)

Contained Li (Tonnes x 1000)

Brine Concentration (mg/L Li)

Contained Li (Tonnes x 1000)

Brine Concentration (mg/L Li)

Contained Li (Tonnes x 1000)

Brine Concentration (mg/L Li)

Total

10.40

151.92

24.71

142.99

35.11

145.42

62.76

120.92

Source: SRK, 2021

•Mineral resources are reported exclusive of mineral reserves. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

•Resources are reported on an in-situ basis.

•Resources are reported as lithium metal

•Resources have been categorized subject to the opinion of a QP based on the amount/robustness of informing data for the estimate, consistency of geological/grade distribution, survey information.

•Resources have been calculated using drainable porosity estimated from bibliographical values based on the lithology and QP’s experience in similar deposits

•The estimated economic cutoff grade utilized for resource reporting purposes is 50 mg/l lithium, based on the following assumptions:

◦A technical grade LC price of US$11,000/metric tonne CIF North Carolina. This is a 10% premium to the price utilized for reserve reporting purposes. The 10% premium applied to the resource versus the reserve was selected to generate a resource larger than the reserve, ensuring the resource fully encompassed the reserve while still maintaining reasonable prospect for eventual economic extraction.

◦A fixed brine pumping rate of 20,000 afpy, ramped up from current levels over a period of five years.

◦Operating cost estimates are based on a combination of fixed brine extraction, G&A and plant costs and variable costs associated with raw brine pumping rate or lithium production rate. Average life of mine operating costs is calculated at approximately $4,900/metric tonne LC CIF North Carolina.

•Mineral Resources tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding.

•SRK Consulting (U.S.) Inc. is responsible for the Mineral Resources with an effective date: June 30,2021.


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Table 11.7: Silver Peak Mineral Resource Estimate, Inclusive of Mineral Reserves (Effective June 30, 2021)


	Measured Resource		Indicated Resource		Measured + Indicated Resource		Inferred Resource
	Contained Li (Tonnes x 1000)	Brine Concentration (mg/L Li)	Contained Li (Tonnes x 1000)	Brine Concentration (mg/L Li)	Contained Li (Tonnes x 1000)	Brine Concentration (mg/L Li)	Contained Li (Tonnes x 1000)	Brine Concentration (mg/L Li)
In Situ	28.71	151.92	67.44	142.97	96.15	145.41	62.76	120.92
In Process	1.31	103	-	-	1.31	103	-	-

Source: SRK, 2021

•Mineral resources are reported inclusive of mineral reserves. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

•Resources are reported as in situ and in process. In process resources quantify the prior 24 months of pumping data and reflect the raw brine, at the time of pumping.

•Resources are reported as lithium metal

•Resources have been categorized subject to the opinion of a QP based on the amount/robustness of informing data for the estimate, consistency of geological/grade distribution, survey information.

•Resources have been calculated using drainable porosity estimated from bibliographical values based on the lithology and QP’s experience in similar deposits

•The estimated economic cutoff grade utilized for in situ resource reporting purposes is 50 mg/l lithium, based on the following assumptions:

◦A fixed brine pumping rate of 20,000 afpy, ramped up from current levels over a period of five years.

◦Operating cost estimates are based on a combination of fixed brine extraction, G&A and plant costs and variable costs associated with raw brine pumping rate or lithium production rate. Average life of mine operating costs is calculated at approximately $4,900/metric tonne LC CIF North Carolina.

•Mineral Resources tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding.

•SRK Consulting (U.S.) Inc. is responsible for the Mineral Resources with an effective date: June 30, 2021.


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11.8Recommendations and QP Opinion on Mineral Resource Estimate

The mineral resources stated herein are appropriate for public disclosure and meet the definitions of measured, indicated, and inferred resources established by SEC guidelines and industry standards. Based on the analysis described in this report, the QP’s understanding of resources that are exclusive of reserves, and the project’s status of operating since 1966, in the QP’s opinion, there is reasonable potential for economic extraction of the resource.

The current lithium concentration data is mostly located in the southeastern boundary of the claims area. Aquifers in the northern zones have little or no data, generating a zone of inferred along with the previously mentioned zones.

A similar situation occurs in the deep aquifer LGA, located at the bottom of the basin. Given its high estimated Sy (18%), this unit is considered prospective for lithium resources. The current geological model shows LGA below the bottom of the resource model (740 masl). However, there are not enough deep samples for including that LGA volume in the resource estimate.

SRK recommends implementing an infill drilling campaign in the aquifers within the inferred zones and deep areas mentioned above, focused on collecting lithium concentration data in LAS and LGA.


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12Mineral Reserve Estimates

12.1Key Assumptions, Parameters, and Methods Used

This section describes the key assumptions, parameters, and methods used to simulate the movement of lithium-rich brine in Clayton Valley.

12.1.1Numerical Model Construction

To simulate the movement of lithium-rich brine in the alluvial sediments of Clayton Valley, a numerical groundwater flow and transport model was developed using the finite-difference code MODFLOW-SURFACT with the transport module (HydroGeoLogic, 2012) via the Groundwater Vistas graphical user interface (Rumbaugh and Rumbaugh, 2011). The model was calibrated to available historical water level and lithium concentration data. The calibrated model was used to evaluate different production wellfield pumping regimes.

12.1.2Numerical Model Grid and Boundary Conditions

The active model domain includes the alluvial sediments of Clayton Valley and covers an area of 391 square kilometers with 242,213 active cells over 30 layers. Model cells are uniform at 200 by 200 m. Figure 12-1 shows the model grid and the extent of the active model domain within Clayton Valley. Model layers vary in thickness from 10 m near land surface to 50 m for deeper zones with a total thickness of 600 m. Table 12.1 shows the breakdown of model layer thicknesses. Model layering was developed to ensure proper representation of the aquifer units within the numerical model.

Table 12.1: Model Layering


Layers			Thickness (m)
1 – 18			10
19 – 24			20
25 – 30			50

Source: SRK, 2020

The alluvial sediments of the basin are surrounded by low-permeability bedrock. In the numerical model, these boundaries are represented as no-flow boundaries.


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Source: SRK, 2021

Figure 12-1: Active Model Domain and Model Grid


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12.1.3Hydrogeologic Units and Aquifer Parameters

The hydrogeologic units specified in the model were derived from the geologic model developed using the Leapfrog Geo software and described in Section 11.1. Aquifer parameters of hydraulic conductivity, specific yield, and specific storage in addition to the transport parameter of effective porosity are specified by hydrogeologic unit in the model.

Horizontal hydraulic conductivity values used in the model were derived from the pumping tests described in Section 7.3. The geometric mean of results from the pumping tests conducted in each aquifer unit shown in Table 7.4 provided the initial values for use in calibrating the numerical groundwater flow model. Ratios of horizontal to vertical hydraulic conductivity were initially selected based on understanding of the lithology of each aquifer and aquitard unit. Vertical hydraulic conductivity values were adjusted during calibration to best match the conceptual understanding of brine movement within the system.

Sy or drainable porosity have not been directly tested or analyzed by Albemarle in Clayton Valley. Specific yield and effective porosity values used in the model were derived from a review of literature. Results of the literature review for the different sediment types are shown in Table 7.5. For improved defensibility of the model and of the resource estimate, a value between the mean and the minimum was used for each aquifer unit. These values are consistent with the QP’s experience in similar deposits.

Specific storage has also not been directly tested by Albemarle in Clayton Valley. Specific storage values used in the model were derived from the QP’s experience in similar deposits. Aquifer parameters used in the model are shown in Table 12.2 for each hydrogeologic unit.

Table 12.2: Hydrogeologic Units and Aquifer Parameters


Hydrogeologic Unit	Hydraulic Conductivity (m/d)		Specific Yield (%)	Specific Storage (1/m)	Effective Porosity (%)
	Horizontal	Vertical
Surficial Alluvium	4.32	1.44	20	1 x 10-6	20
Surficial/Near Surface Playa Sediments	0.01	0.0001	1	1 x 10-7	1
Tufa Aquifer System (TAS)	59	59	7	1 x 10-6	7
Salt Aquifer System (SAS)	0.2	0.2	1	1 x 10-6	1
Marginal Gravel Aquifer (MGA)	1.3	1.3	15	1 x 10-7	15
Main Ash Aquifer (MAA)	4.6	4.6	11	1 x 10-7	11
Lower Aquifer System (LAS)	0.3	0.03	5	1 x 10-7	5
Lower Gravel Aquifer (LGA)	1.2	1.2	18	1 x 10-7	18
Lacustrine Sediments	0.03	0.0015	1	1 x 10-7	1

Source: SRK, 2021

12.1.4Simulated Pre-Development Conditions

The pre-development model simulates equilibrium conditions prior to lithium mining activities. Prior to mining activities, groundwater generally flowed from the basin boundaries toward the center of the basin. Water enters the basin aquifer system via mountain front recharge and groundwater inflows. Rates of these inflows were estimated by Rush (1968) as shown in Table 12.3.


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Table 12.3: Basin Inflows


Inflow Description	Inflow Rate (AFA)	Inflow Rate (m3/d)
Mountain Front Recharge	1,500	5,100
Interbasin Groundwater Inflow from Big Smoky Valley	13,000	43,900
Interbasin Groundwater Inflow from Alkali Spring Valley	5,000	16,900
Total	19,500	65,900

Source: Modified from Rush, 1968

Prior to pumping, groundwater left the basin via evaporation in the central and lowest portions of the basin. The simulated water balance for pre-development conditions is shown in Table 12.4.

Table 12.4: Simulated Groundwater Budget, Pre-Development


Model In (m3/d)
Mountain Front Recharge			5,069
Groundwater Inflow			60,829
Total In			65,898
Model Out (m3/d)
Evapotranspiration			65,817
Total Out			65,817
In - Out (m3/d)			81
Percent Discrepancy			0.12%

Source: SRK, 2021

12.1.5Simulated Historical Development

Production wells have been used to extract lithium-rich brine from the alluvial sediments of Clayton Valley since 1966. Annual production rates in relation to wellfield average lithium concentration for 1966 through 2019 are shown in Figure 12-2.


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Source: SRK, 2020

Figure 12-2: Wellfield Pumping and Average Lithium Concentration

In 2009, SPLO staff member Jennings estimated that the amount of brine recharging the aquifer from the evaporation ponds was 6,960 m3/day (2,060 AFA). The brine in the ponds would have been extracted the prior year, 2008. The average pumping rate for the production wellfield in 2008 was 37,900 m3/day (11,217 AFA). Jennings estimate of pond recharge represents approximately 18% of the pumping from the prior year. This ratio was applied to the pumping to estimate the amount of pond recharge each year of the historical model simulation. According to current SPLO operations staff, the ponds are divided into three categories: the weak brine system, the strong brine complex, and the final pond. The lithium concentration varies in the evaporation ponds depending on the feed from the wellfield and the rate of evaporation. In the first half of 2020, the average concentration of lithium was 306 parts per million (ppm) in the weak brine system and 2,038 ppm in the strong brine complex (S. Thibodeaux, personal communication, 2020). The final pond is lined so it was not evaluated with regards to recharging the aquifer system.

The simulated groundwater budget at the end of the historical period, December 2019, is shown in Table 12.5.


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Table 12.5: Simulated Groundwater Budget, End of 2019


Model In (m3/d)
Decrease in Storage			5,268
Mountain Front Recharge			5,069
Groundwater Inflow			60,829
Pond Recharge			6,024
Total In			77,190
Model Out (m3/d)
Increase in Storage			1,148
Evapotranspiration			39,211
Production Wells			36,870
Total Out			77,229
In - Out (m3/d)			-39
Percent Discrepancy			-0.05%

Source: SRK, 2021

Historical water levels measured on-site by the SPLO are taken in the production wells. In the database, these water levels are labeled as either pumping or static. It is not clear from the records how long the pumps had been off when static water levels were measured. Therefore, in SRK’s opinion, these water levels were not suitable for use in calibrating the numerical flow model. SRK still attempted to calibrate the model to water level change around a prolonged shutdown of pumping that occurred in 2009. The change in water level between when the pumps were turned off to when they were turned back on provided a recovery in water levels to which SRK tried to calibrate the flow model. Simulated water level recovery versus measured water level recovery is shown in Figure 12-3. Statistics for the calibration of water level recovery are as follows:

•Residual mean error: 0.5 m

•Absolute mean error: 11.5 m

•Root mean square error (RMSE): 16.4 m

•RMSE divided by the range of observed data: 31%

Values of RMSE divided by the observed data range should be less than 10% for an acceptably calibrated model. SRK acknowledges that the statistics for this calibration are not ideal but also notes the questionability of the data. The model simulates more response than was observed in wells screened in the SAS aquifer and in wells screened across the LAS and LGA aquifers. SRK used the geometric mean of horizontal hydraulic conductivity values from the pumping test data, as shown in Table 12.2, for the numerical models.


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Source: SRK, 2021

Figure 12-3: Water Level Recovery during 2009 Shutdown, Simulated Versus Measured

In comparison, lithium concentrations have been measured at the wellhead of each active production well on a regular basis since 1966. A comparison of the simulated mass of lithium extracted annually by the production wellfield versus the measured mass is shown on Figure 12-4. The residual mean error in this comparison is -37,679 kg, the absolute mean error is 132,045 kg, and the RMSE is 159,129 kg. The RMSE divided by the range of observed data is 5%. Values of RMSE divided by the observed data range should be less than 10% for an acceptably calibrated model.


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Source: SRK, 2021

Figure 12-4: Annual Mass of Lithium Extracted by Production Wellfield, Simulated Versus Measured

A comparison of simulated to observed average wellfield lithium concentration vs cumulative production pumping is shown on Figure 12-5.


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Source: SRK, 2021

Figure 12-5: Lithium Concentration Versus Cumulative Production Pumping, Simulated Versus Measured

A comparison of the simulated vs observed mass extraction rate (lithium concentration times pumping rate) for each production well active at the end of 2019 is shown in Figure 12-6. The residual mean error in this comparison is 3.5 kg/d, the absolute mean error is 32.8 kg/d, and the RMSE is 46.8 kg/d. The RMSE divided by the range of observed data is 10%. Values of RMSE divided by the observed data range should be less than 10% for an acceptably calibrated model.

Calibration of the model to mass extracted by the production wellfield annually and comparison of simulated to observed lithium concentration versus cumulative production pumping are both reasonable. Calibration of the model to the mass extraction rate at the end of 2019 also looks reasonable. It is SRK’s opinion that the numerical model adequately represents the historical and current wellfield production of lithium from the basin and can be used for future production plans to support a reserve estimate.


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Source: SRK, 2021

Figure 12-6: Mass Extraction Rate at the End of 2019, Simulated Versus Measured Sensitivity Analysis

Selected aquifer parameters were varied to evaluate the sensitivity of the simulated wellfield average lithium concentrations over time to changes in values of these parameters. Those parameters that were sensitive to changes during the calibration process were selected for this analysis. Ranges were chosen for each aquifer parameter based on professional experience in calibrating numerical models.

Specific yield and effective porosity values were varied by decreasing or increasing values by 30% in the MGA, MAA, LAS, and LGA aquifers. Results of the analysis are shown in Figure 12-7. The gap in the lines represents the shutdown of operations that occurred in 2009. Simulated historical wellfield lithium concentrations were most sensitive to increasing and decreasing specific yield and effective porosity in the MAA and LAS aquifers.

Horizontal hydraulic conductivity values were varied by decreasing or increasing values by 50% in the MGA, MAA, LAS, and LGA aquifers and in the lacustrine sediments aquitard. Results of the analysis are shown in Figure 12-8. Simulated historical wellfield lithium concentrations were not sensitive to increasing and decreasing horizontal hydraulic conductivity.

Vertical hydraulic conductivity values were varied by decreasing or increasing values by one order of magnitude in the surficial playa sediments and lacustrine sediments aquitards. Results of the


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analysis are shown in Figure 12-9. Simulated historical wellfield lithium concentrations were sensitive to increasing and decreasing vertical hydraulic conductivity in the surficial playa sediments and lacustrine sediments aquitards. Increasing vertical hydraulic conductivity in the surficial playa aquitard resulted in larger lithium concentrations due to more lithium from the brine recharged in the ponds reaching the production wells.


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Source: SRK, 2021

Figure 12-7: Sensitivity of Simulated Wellfield Lithium Concentration to Varying Specific Yield


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Source: SRK, 2021

Figure 12-8: Sensitivity of Simulated Wellfield Lithium Concentration to Varying Horizontal Hydraulic Conductivity


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Source: SRK, 2021

Figure 12-9: Sensitivity of Simulated Wellfield Lithium Concentration to Varying Vertical Hydraulic Conductivity

12.2Mineral Reserves Estimates

Using the hydrogeologic properties of the Salar combined with the well field design parameters, the rate and volume of lithium projected as extracted from the Project was simulated using the predictive model. The predictive model output generated a brine production profile appropriate for the playa based upon the well field design assumptions with a maximum pumping rate of 20,000 afpy (based on the maximum water rights held by Albemarle) over a period of 50 years. The model was able to simulate extraction of brine from the aquifer system during the 50-year LoM. Total wellfield pumping was maintained by turning off shallow MGA and MAA wells and installing deeper LAS wells.

Additional details on the wellfield design and pumping schedule are discussed in Section 13. Projected lithium mass extracted each year for the next 50 years is shown on Figure 12-10. SRK cautions that this prediction is a forward-looking estimate and is subject to change depending upon operating approach (e.g., pumping rate, well location/depth) and inherent geological uncertainty.


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Source: SRK, 2021

Figure 12-10: Projected Annual Mass of Lithium Extracted by Production Wellfield

12.2.1Model Simulation to Reserve Estimate

Therefore, direct conversion of measured and indicated classification to proven and probable reserves is not practical. As the direct conversion is not practical, in the QP’s opinion, the most defensible approach of generation of a reserve is to truncate the predictive model simulation results early and assume only a portion of the static measured and indicated resource is successfully produced. This is because the confidence level in the pumping plan is highest in the early years and reduces over time.


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While this is a qualitative measure and subject to the opinion of the QP, it is an established industry practice. For the purposes of this reserve estimate, in the QP’s opinion, a 30-year pumping plan is reasonable and defensible and therefore truncated the pumping plan at the end of 2050 (due to the partial year of pumping in 2021, the actual mine plan is approximately 29.5 years). Truncating the mine plan at the end of 2050 results in a pumping plan that extracts approximately 60% of the lithium contained in the total in situ measured and indicated mineral resource (inclusive of reserves).

Beyond the in situ reserve calculation, described above, given the delay in the time of pumping brine to actual production of lithium being approximately two years due to the extended evaporation period, the first two years of lithium production in the economic model are sourced from brine that is in process (i.e., in the evaporation ponds). Given these first two years of production are included in the economic model, in SRK’s opinion, they are also appropriately classified as a component of the reserve. Therefore, SRK has also included this brine in the reserve, quantified separately from the pumping plan.

Silver Peak tracks the volume and concentration of brine pumped for production purposes on an ongoing basis. Therefore, to quantify this in process component of the reserve, SRK summarized the prior 24 months of pumping data as the in-process reserve. This component of the reserve is reported at the concentration of brine pumped as this is the most reliable point of measurement. SRK classified this component of the reserve as proven, given the actual quantity of brine produced was directly measured and therefore has relatively low uncertainty.

12.2.2Cut-Off Grade Estimate

Due to the dynamic nature of brine resources and inflow of fresh water, the concentration of lithium in brine pumped from the mineral resource decreases over time. While there is some ability to selectively extract areas of the mineral resource with higher grades by targeting the location of new extraction well locations, the impact of dilution cannot be fully avoided. Therefore, as the brine concentration declines, the quantity of lithium production, for the same pumping rate, also declines over time. As lithium brine production operations such as Silver Peak have relatively high fixed costs, eventually the quantity of lithium contained in the extracted brine is not adequate to cover the cost of operating the business.

As discussed in Section 19, the economic model provides positive operating cash flow for the entire life of the reserve, so it is clear that the entirety of the reserve estimated herein is above the economic cutoff grade utilizing the assumptions described in that section. This includes the use of a long-term price assumption for technical grade lithium carbonate of $10,000/metric tonne (see Section 16 for discussion on the basis of this assumption).

While the pumping plan supporting this reserve, estimate is above the economic cutoff grade for the operation, SRK also calculated an approximate break-even cutoff grade for the purpose of supporting the mineral resource estimate and long-term planning for Silver Peak production. To calculate the break-even cutoff grade, SRK utilized the economic model and manually adjusted the input brine concentration downward until the after-tax cash flow reaches a value of zero. This estimate effectively includes all operating costs in the business as well as sustaining capital with other inputs such as lower process recovery with lower concentration also being accounted for. Note that the capital associated with the rehab of Pond 12 North and 12 South as well as the expansion in


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the number of extraction wells from 47 to 85 has been excluded as it is more appropriately viewed as development capital (it is supporting a production expansion), in the QP’s opinion, and therefore not typically included in a cutoff grade estimate. Based on this modeling exercise, SRK estimates that the breakeven cutoff grade at the assumptions outlined in Section 19, including the reserve price of $10,000/metric tonne of technical grade lithium carbonate, is approximately 56 mg/l Li (for comparison, the last year of pumping in the 30-year life of mine plan has a lithium concentration of 81 mg/l).

12.2.3Reserves Classification and Criteria

As noted in Section 11.7, due to the static nature of the mineral resource estimate which includes measured, indicated, and inferred resources versus the dynamic predictive model for the mineral reserve estimate, a direct conversion of measured and indicated resource to proven and probable reserves is not practical. Therefore, as with the estimation of the total magnitude of the reserve, in the QP’s opinion, a time-dependent approach to classification of the reserve is the most defensible as the QP has the highest confidence in the early years of the predictive model results, with a steady erosion of that confidence over time. Therefore, in the QP’s opinion, the production plan through the end of 2026 (approximately 5.5 years of pumping) is reasonably classified as a proven reserve with the remainder (24.5 years) of production classified as probable. Notably, this results in approximately 20% of the reserve being classified as proven and 80% of the reserve being classified as probable. For comparison, the measured resource comprises approximately 30% of the total measured and indicated resource. Effectively, this assumption represents that some measured resource would be converting to probable reserve (if a direct conversion were practical). In the QP’s opinion, this is reasonable as the uncertainty associated with pumping and associated dilution increases overall uncertainty beyond that geologic uncertainty reflected in the resource classification. Finally, as noted in Section 12.2.1, SRK classified the in-process brine as proven, given the relatively low uncertainty associated with this brine that has been fully measured during the pumping process.

12.2.4Reserve Uncertainty

The simulated historical wellfield average lithium concentrations over time were most sensitive to changes in specific yield and effective porosity in the MAA and LAS aquifers and changes in vertical hydraulic conductivity in the aquitards. These parameters were selected to vary in evaluating the sensitivity of projected lithium concentrations. Specific yield and effective porosity values in the MAA and LAS aquifers were again varied by decreasing or increasing by 30%. Vertical hydraulic conductivity values magnitude in the surficial playa sediments and lacustrine sediments aquitards were again varied by decreasing or increasing by one order of magnitude. Results of simulating changes to these parameters with the predictive model are shown in Figure 12-2.

Reducing simulated vertical hydraulic conductivity in the aquitards reduces movement of brine from the aquitards into the aquifers and can have a potential impact on pumpability of the thinner aquifer units like the MAA. If SPLO operations determines that current or future production wells screened in the MAA or MGA become unpumpable, then there is a risk that they will have to install deeper LAS wells earlier than is scheduled in the base scenario pumping plan.


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Source: SRK, 2021

Figure 12-11: Sensitivity of Projected Wellfield Lithium Concentration to Varying Select Parameters


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12.3Summary Mineral Reserves

Table 12.6 shows the Silver Peak mineral reserves as of June 30, 2021.

In the QP’s opinion, key points of uncertainty associated with the modifying factors in this reserve estimate that could have a material impact on the reserve include the following:

•Resource dilution: The reserve estimate included in this report assumes the brine aquifer is extracted at a rate of 20,000 afpy, in accordance with Albemarle’s maximum water rights at Silver Peak. Historic pumping rates are lower, on average, than this level and pumping at this higher rate could result in more inflow of fresh water increasing dilution more than predicted in the model simulation. Higher dilution levels may result in a shorter mine life (i.e., lower reserve) or require pumping at lower rates. While the same amount of lithium potentially could be extracted over a longer timeframe at the lower pumping rate, the associated reduction in lithium production on an annual basis could increase the cutoff grade for the operation and potentially reduce the mineral reserve.

•Aquifer Pumpability: The pumpability of an aquifer is an assessment of the simulated water level in the model’s production wells to estimate when the well will likely no longer be operable due to water levels in the well dropping below the pump intake. Comparison of simulated to measured water levels where possible were used to devise adjustment factors for evaluating aquifer pumpability, allowing for a conservative estimate of when wells would no longer be operable. Inaccurate estimates of aquifer pumpability may result in wells becoming inoperable earlier or require pumping at lower rates.

•Hydrogeological assumptions: Factors such as specific yield and hydraulic conductivity play a key role in estimating the volume of brine available for extraction in the wellfield and the rate it can be extracted. These factors are variable through the project area and are generally difficult to directly measure. Significant variability, on average, from the assumptions utilized in the predictive model could materially impact the estimate of brine available for extraction and associated concentrations of lithium. Model sensitivity analyses were completed on key aquifer parameters as discussed in Section 12.2.4. As shown in the figures, the ranges evaluated in these analyses resulted in lithium concentrations ranging from 75 to 104 mg/l, compared to a base-case of 81 mg/l, at the end of the 30-year reserve life. However, these analyses do not fully quantify all potential uncertainty and wider variability in these parameters or changes in other parameters may result in more significant deviation in the base case than those shown in the sensitivity analyses.

•Lithium carbonate price: Although the pumping plan remains above the economic cutoff grade discussed in Section 12.2.2, commodity prices, including technical grade lithium carbonate, can have significant volatility which could result in a shortened reserve life.

•Extension of the pumping plan beyond 2049: In the QP’s opinion, the predictive model presents adequate confidence in the results to support a reserve estimate through 2049.


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However, the model continued to predict lithium concentrations above the economic cutoff grade discussed in Section 12.2.2 for the full 50-year simulation period. This suggests opportunity remains to extend the mine life and associated reserve beyond the current assumptions.


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Table 12.6: Silver Peak Mineral Reserves, Effective June 30, 2021


	Proven Mineral Reserves		Probable Mineral Reserves		Total Mineral Proven and Probable Reserves
	Contained Li (Metric Tonnes x 1,000)	Li Concentration (mg/L)	Contained Li (Metric Tonnes x 1,000)	Li Concentration (mg/L)	Contained Li (Metric Tonnes Li x 1,000)	Li Concentration (mg/L)
In Situ	11.91	87	49.13	83	61.04	84
In Process	1.31	103	-	-	1.31	3

Source: SRK, 2021

•Proven reserves have been estimated as the lithium mass pumped during Years 2021 through 2026 of the proposed Life of Mine plan

•Probable reserves have been estimated as the lithium mass pumped from 2025 until the end of the proposed Life of Mine plan (2050)

•Reserves are reported as lithium metal

◦A technical grade LC price of US$10,000/metric tonne CIF North Carolina.

◦A fixed brine pumping rate of 20,000 afpy, ramped up from current levels over a period of five years.

◦Operating cost estimates are based on a combination of fixed brine extraction, G&A and plant costs and variable costs associated with raw brine pumping rate or lithium production rate. Average life of mine operating costs is calculated at approximately $5,100/metric tonne LC CIF North Carolina.

•Mineral reserve tonnage, grade and mass yield have been rounded to reflect the accuracy of the estimate (thousand tonnes), and numbers may not add due to rounding.

•SRK Consulting (U.S.) Inc. is responsible for the mineral reserves with an effective date: June 30, 2021.


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13Mining Methods

As a sub-surface mineral brine, the most appropriate method for extracting the reserve is by pumping the brine from a network of wells. This method of brine extraction has been in place at Silver Peak for over 50 years. As discussed in Section 0, the extracted brine is concentrated using solar energy in a series of evaporation ponds prior to final processing in the lithium carbonate production plant.

These extraction wells and associated pumping infrastructure are the primary pieces of equipment required for brine extraction (see the following section for more discussion). Primary ancillary equipment required are drills for development of new or replacement wells. Silver Peak utilizes a contractor for wellfield development that provides necessary drilling and well installation equipment.

The extraction rate of raw brine from the aquifer can be limited by the number of wells in the wellfield, the hydraulic parameters of the aquifer, the capacity of the evaporation ponds, the capacity of the lithium carbonate production facility, or the water rights held by Albemarle. The current limits on extraction rate are the evaporation pond capacity and the wellfield pumping capacity. However, the lithium carbonate production plant has excess capacity and Albemarle has water rights exceeding current pumping rates. Therefore, consistent with Albemarle’s strategic plan for the Silver Peak operation, SRK has assumed increasing the capacity of the wellfield and the evaporation ponds to sustain brine extraction rates at the maximum level of water rights held by Albemarle (20,000 afpy). At these pumping rates, the predicted brine concentrations and predicted evaporation pond recovery rates, the associated lithium production rate will remain under the capacity of the lithium carbonate plant. Expansion of the wellfield and rehabilitation of existing evaporation ponds to sustain this pumping rate will require significant capital investment, as discussed in Section 18.2.

13.1Wellfield Design

To support increasing the brine pumping rate to 20,000 afpy, the mine plan evaluated for the reserve estimate increases the number of active production wells from the 46 that are active at the end of 2020 to 84 wells active by the end of 2025. SPLO has applied for permits to drill 23 additional production wells during 2021 and 2022; these additional wells will increase brine pumping to close to 20,000 AFA. The schedule for increasing the number of active production wells is shown in Table 13.1. After this date, as wells in the higher producing aquifers are deleted and replaced with those in lower producing aquifers, the well count continues to climb, reaching a peak of 86 active wells at the end of the 30-year reserve period. In 2035, it is predicted that a low producing well will no longer be operable. A new well to maintain wellfield pumping at 20,000 AFA is not expected to be necessary, the additional pumping can be acquired by increasing the pumping rate in an existing production well. In reality, this will be managed by SPLO as part of their management of the production wellfield. Existing production wells require periodic replacement as well with around three wells replaced per year, on average, for the current wellfield. For the purposes of this reserve estimate, SRK has assumed roughly the same rate of wells failing per year with the increased well count. A map showing the predicted locations for the life of mine production wells is presented in Figure 13-1.


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Table 13.1: Wellfield Expansion Schedule (30-Year Reserve Pumping Plan)


Year	Number Active Wells at Start of Year	Number Wells Removed	Number New Wells	Number Active Wells at End of Year
2021	46	0	7	53
2022	53	2	22	73
2023	73	2	8	79
2024	79	4	6	81
2025	81	1	4	84
2026	84	1	1	84
2027	84	0	0	84
2028	84	2	3	85
2029	85	0	0	85
2030	85	0	0	85
2031	85	1	1	85
2032	85	0	0	85
2033	85	0	0	85
2034	85	1	1	85
2035	85	1	0	84
2036	84	0	0	84
2037	84	0	0	84
2038	84	0	0	84
2039	84	0	0	84
2040	84	0	0	84
2041	84	0	0	84
2042	84	0	0	84
2043	84	0	0	84
2044	84	0	0	84
2045	84	0	0	84
2046	84	0	0	84
2047	84	0	0	84
2048	84	0	1	85
2049	85	0	1	86
2050	86	0	0	86

Source: SRK, 2021


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Source: SRK, 2021

Figure 13-1: Well Location Map for Predicted Life of Mine


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New extraction wells are designed to produce pumping rates ranging from 300 to 875 m3/d. Current extraction wells are drilled to depths ranging from 0 to 600 meters. SRK selected the location for new wells to support the higher predicted pumping rates and target areas of the reserve with higher lithium grades. These new wells are expected to be similar in design to current Silver Peak extraction wells with depths ranging from 90 to 550 m. A photo of a typical extraction well from Silver Peak is shown in Figure 13-2. The typical well consists of casing and screen between 12 and 16 inches in diameter with a submersible pump. The pumps extract between 125 and 4500 m3/d. The well has valves, backflow preventer, flow meter, and pump control panel. The well pumps through HDPE piping to the evaporation ponds. A cross section of a typical extraction well is shown in Figure 13-3.

Source: SRK, 2020

Figure 13-2: Brine Extraction Well at Silver Peak


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Source: Wood, 2018

Figure 13-3: Typical Production Well Construction

13.2Production Schedule

Section 12.1 details the hydrogeological modelling that was utilized to develop the life of mine production plan. The associated proposed brine extraction rate from the wellfield is shown on Figure 13-4. Note that as discussed in Section 12.3.1, the reserve portion of this pumping plan was truncated in year 30.


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Factors such as mining dilution and recovery are implicitly captured by the predictive hydrogeological model. Reporting of these factors is not practical due to the disconnect between the static resource model and the dynamic predictive model utilized for reserve estimation as well as other factors such as mixing of brine during production. However, at a high level and highly simplified comparison, the reserve grade for the 30-year reserve pumping plan is 84 mg/l in comparison to a measured and indicated resource grade of 145 mg/l, suggesting dilution greater than 40% (if dilution is at zero grade, which it is not which means, in reality, dilution is even higher). Further, as noted in Section 12.2.1, the production plan was truncated at 30 years which results in a conversion of approximately 60% of the measured and indicated resource to reserve. Again, this is a gross simplification, but this conversion rate does have a relationship to mining recovery rates.

Source: SRK, 2021

Figure 13-4: Planned Pumping for Life of Mine


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14Processing and Recovery Methods

The processing methodology at Silver Peak utilizes traditional solar evaporation to concentrate and remove impurities from the lithium-rich brine extracted from the resource. This concentrated brine is then further purified in the processing facilities and chemically reacted to produce a technical grade lithium carbonate. Figure 14-1 provides a high-level flow sheet and mass balance for a 6,000 tonnes per annum (t/a) Li2CO3 production target, summarizing the key unit operations.

The nameplate capacity of the Lithium carbonate plant is listed as 6,000 t/a Li2CO3. However, in recent years, Silver Peak has demonstrated that the plant is capable of producing higher than that. In 2018, the plant produced approximately 6,500 tonnes Li2CO3.


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Source: SRK, 2020

Figure 14-1: Silver Peak Simplified Process Flowsheet and Mass Balance


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14.1Evaporation Pond System

Lithium bearing brines are pumped from beneath the playa surface by a series of wells designed and distributed to recover the resource from the aquifer. The range of designed operation conditions for each well is dependent upon the aquifer and individual environment of the unit, with the wellfield as a whole historically producing a maximum of twelve million gallons of fluid per day. Exploration, well drilling and aquifer development are on-going throughout the life of the operation and are covered in more detail in Section 13. Brine produced from the extraction wells is pumped to the solar evaporating pond system.

Brine flows from one pond to another, typically through flow points cut in the dikes separating one pond from another, or pumped where elevation differential requires, as evaporation increases the total dissolved solids (TDS) content. Figure 14-2 shows the flow through the various ponds in the evaporation pond system. Management of the flow through the system consists of regular monitoring of pond levels and laboratory analysis of the contained brine concentration.

The rate of brine transfer from one pond to another is governed by the rate of solids increase, which is dependent upon the evaporation rate, which is seasonally variable. Sampling of the pond brines for laboratory analysis is done on a regular schedule, which provides for sampling of each pond a minimum of once per month and a maximum of daily, dependent upon management needs.

Pond levels are surveyed monthly to determine the volume of brine contained and monitored daily by visual inspection by the playa supervisory personnel. In addition, there is always at least one employee on duty (10 hours per day, 365 days per year) who is assigned to monitor the pond system. The storage capacity for meteoric waters is typically in excess of one foot of dike freeboard, or more than four times the 100 yr., 24 hr. storm event. The flow through the system is adjusted and closely monitored by supervisory personnel during and after any severe storm event. The operating personnel are instructed to contact a supervisor in the event of any precipitation over the pond system and action must be taken by the supervisor if the quantity of precipitation exceeds one tenth of an inch, as described in the emergency response plan.


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Source: Albemarle, 2021

Figure 14-2: Brine Flow Path in Pond System


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It is necessary to remove magnesium from the brines, and this is accomplished by treatment with slaked lime (Ca(OH)2). The slaked lime is added as a slurry to the brine in a two-stage reactor system. The lime slaking operation is controlled by measuring the specific gravity of the slurry to ensure that the proper ratio of water to lime is used for maximum efficiency. The lime addition rate is controlled by measuring the pH of the brine as it is discharged from the reactors. The lime treatment results in the production of a semi-solid mud, consisting mainly of magnesium hydroxide (Mg[OH]2) and calcium sulfate (CaSO4), which is deposited in a lime solids pond. Seasonal liming occurs during summer months, May through September. The discharged brine enters a series of nine small ponds known as the Strong Brine Complex (SBC) for further concentration through solar evaporation. Seasonal dredging is performed during winter months following the liming season. SRK notes that to support the forecast expansion of pumping rates to 20,000 afpy, additional liming capacity will need to be installed at the operation.

Decant and further evaporation of the treated brine results in the continued deposition of salts in the pond bottoms. The salts are removed from the ponds and stockpiled in one of three piles located adjacent to the pond area. Salt harvesting is performed by a contractor during winter months within the strong brine complex on a three to five-year rotation. The removal of precipitated salt restores capacity for future use. At the production rates forecasted in this reserve estimate, on average, 2 million tons of salt will require harvesting per year.

There are currently 1,688 ha of active ponds at Silver Peak. While evaporation-based process performance can vary significantly due to factors such as climate and salt harvesting strategy, SRK estimates these ponds are adequate to support a maximum of approximately 16,420 AFA of sustained brine extraction. However, Albemarle is currently evaluating options to expand pond capacity to support forecasted pumping rates in excess of this value. While multiple options for pond expansion are under evaluation, as a current base-case, there are additional inactive ponds (12S and 12N) that are currently full of precipitated halite. Albemarle can remove this halite and reactivate these ponds. Ponds 12S and 12N would add an additional 277 ha of pond capacity to the current network, bringing the total to 1,964 ha. With this expansion, SRK estimates that the Silver Peak pond system can support sustained pumping of 20,000 AFA although climatic factors and other operational factors (e.g., salt harvesting strategy) could negatively impact this production capacity. SRK notes that Albemarle is conducting studies to further determine if salt removal, or additional pond capacity by an additional 40 to 70 ha, or a combination is most appropriate for long term operations. Albemarle is also exploring pond lining options to further enhance lithium recovery.

14.2Lithium Carbonate Plant

When the lithium concentration reaches levels suitable for feed to the lithium carbonate plant, approximately 0.54% lithium, the brine is pumped from the SBC to the carbonate plant. Within the plant (Figure 14-3), the brine is discharged into one of two mixing tanks, where slaked lime and soda ash (Na2CO3) are added to remove any remaining magnesium and calcium. This treatment results in the production of a semi-solid sludge composed primarily of magnesium hydroxide and calcium carbonate (CaCO3). This sludge is removed periodically from the treatment tanks and discharged into the plant waste ditch, where it is combined with other plant waste waters and discharged onto the playa surface on Albemarle’s permitted property near the western edge of the pond system. The settled brine is decanted through one of two plate and frame filter presses into the clear brine surge tank (CBST).


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Source: Albemarle, 2018

Figure 14-3: Silver Peak Lithium Carbonate Plant

The brine feed is pumped from the CBST on a continuous basis through heat exchangers into the reactor system for final precipitation of lithium carbonate (Li2CO3). The rate of brine feed to the plant is based on lithium concentration and production requirements. The rate is historically approximately 500 to 600 m3/d of 0.54% Li concentrate. The heat exchangers heat the brine to increase the efficiency of the precipitation of the lithium carbonate. The hot brine feed is processed through a series of reactors where soda ash is added to precipitate lithium carbonate. The resultant lithium carbonate slurry is pumped into a bank of cyclones for concentration of the lithium carbonate solids prior to further removal of liquids using a vacuum filter belt. Overflow from the cyclones goes to the thickener to be re-circulated, and the underflow goes to filtration and consequently drying. Mother liquor from the reactors, recovered in the cyclones and belt dryer, is pumped to the pond system for recycle so the contained lithium is not lost.

The product cake from the belt filter is washed with hot, softened water to remove any contaminants left by the mother liquor. The water is removed from the cake by another vacuum pan and recycled to the lithium carbonate reactors. The washed cake is fed to a propane fired dryer, then air conveyed to the product bin and packaging warehouse for final packaging prior to shipment to customers. In the packaging facility the product may be packaged in a number of different containers, depending on sales and inventory needs.


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There is another facility on site that produces anhydrous lithium hydroxide. However, this facility does not directly source feed product from Silver Peak and has therefore been excluded from this evaluation of reserves for Silver Peak.

14.3Pond System and Plant Performance

SRK developed a mass yield model of the evaporation pond system that is used to predict concentrate mass yield and lithium recovery, based on wellfield lithium input grade, into concentrate containing 0.54% Li feeding the lithium carbonate plant. The mass yield model was developed from an analysis of the pond system performance at different feed grades. The recovery model for the pond system is given as:

Yield % = -206.23*(Li wellfield feed)2 +7.1903*(wellfield Li feed)+0.46099

Predicted mass yield and lithium recoveries versus Li feed from the wellfield are shown in Figure 14-4.

Source: SRK, 2021

Figure 14-4: Salar Yield versus Wellfield Li Input

As previously mentioned, Albemarle is also investigating options to line ponds within the strong brine system. Lining of these ponds would potentially increase the lithium recovery in the pond system by 16% taking the total pond system recovery near to 59%.

Recovery at the lithium carbonate plant can be considered constant at 85% recovery with an input concentrate from the ponds at 0.54% Li.

The pond yield and plant yield are provided as part of the summary cash flow in Table 19-7 of this technical report under the heading “Processing”, and is the QP’s opinion that the metallurgical


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recovery information provided is sufficient to declare mineral reserves, which may be inferred through its use of the resulting parameters in the reserve analysis.

14.4Requirements for Energy, Water, Process Materials, and Personnel

For its nameplate capacity of 6,000 t/y Li2CO3, the Silver Peak process (ponds and LC plant) uses the following:

•Personnel: Total number of people at site, 62.

•Propane: Average of 150 gallons per t of Li2CO3 produced

•Electricity: An average of 8.8 Mmw/h for the Playa operations, and 4.5Mmw/h for the LC Plant

•Fresh Water: 120 to 140 m3 fresh water per t of Li2CO3 produced

•Soda ash: 2.5 tons per t of Li2CO3 produced

•Lime: 1.3 tons per t of Li2CO3 produced

•Salt Removal: Average of 2 Mt/y for the entire pond system

14.5SRK Opinion

It is SRK’s opinion that the metallurgical testwork is sufficient to declare reserves, which may be inferred through its use of the resulting parameters in the reserves analysis.


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15Infrastructure

Silver Peak is a mature operating lithium brine mining and concentrating project that produces lithium carbonate and to a lesser degree, lithium hydroxide. Access to the site is by paved highway off of major US highways. Employees travel to the project from various communities in the region. There is some employee housing in the unincorporated town of Silver Peak, where the project is located. The site covers approximately 15,000 acres includes large evaporation ponds, brine wells, salt storage facilities, administrative offices and change house, laboratory, processing facility, propane and diesel storage tanks, water supply and storage, utility supplied power transmission lines feed power substations and distribution system, liming facility, boiler and heating system, packaging and warehousing facility, miscellaneous shops, and general laydown yard. All infrastructure needed for ongoing operations is in place and functioning.

15.1Access, Roads, and Local Communities

15.1.1Access

The project is located in south central Nevada, USA between the large cities of Reno and Las Vegas. The unincorporated town of Silver Peak, where the project is located, is by paved highway from the north and by improved dirt road to the east. Accessing the project from the north starting in Hawthorne, travel is via paved two-lane US-95, 63 mi to Coaldale. At Coaldale, continue east on US-95 approximately six mi to NV-265. Travel south on paved two-lane NV-265 for 21 mi to Silver Peak. The project administration offices and plant are located on the south side of town. The project can also be accessed from the east from Goldfield. Proceed north on US-95 for five mi to Silver Peak road and turn northwest. Travel northwest approximately five mi on the improved gravel road though Alkali and then south for a total of 25 mi to arrive at the project site. Silver Peak Road bisects the evaporation ponds and salt storage areas. There are numerous dirt roads that provide access to the project from Tonopah to the north. Figure 15-1 shows the general location of the project.


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Source: SRK, 2020

Figure 15-1: Silver Peak General Location

15.1.2Airport

The nearest public airport is located approximately 9 mi east of Tonopah, south of US highway 6. The county owned airport has two asphalt paved runways. One is approximately 7,200 ft long. The other is approximately 6,200 ft long. The airport is approximately 45 to 65 mi northeast of the project depending on the route chosen. Substantial international airports are located to the north in Reno and to the south in Las Vegas.

15.1.3Rail

The nearest railroad is operated by the Department of Defense from Hawthorne, Nevada approximately 90 mi north of Silver Peak. The rail runs north to connect to main east-west portion of the Union Pacific rail near Fernley, Nevada. The rail is not currently used nor planned to be used by the Project.

15.1.4Port Facilities

Port facilities are approximately 400 mi away from the Project. The Port of San Francisco, CA is to the east and the ports of Los Angeles, CA and Long Beach, CA to the south.

15.1.5Local Communities

The processing facilities are located in the unincorporated community of Silver Peak (population 115) in Esmeralda County, Nevada. Goldfield (population 270), the county seat of Esmeralda County is located approximately 30 mi to the east. Three quarters of the personnel who work at Silver Peak live locally in the communities of Silver Peak, Tonopah, and Goldfield, with the majority living in Tonopah. Albemarle has company housing and a camp area for recreational vehicles or campers in Silver


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Peak. Others travel to work from other regional communities. Table 15.1 shows the population and mileage from the site to regional towns and cities. Tonopah is the closest community with full services to support the Project.

Table 15.1: Local Communities


Community	Population	Distance from Silver Peak (Miles)
Bishop, CA	3,900	102
Fernley, NV	19,400	189
Fallon, NV	8,600	162
Dyer/Fish Lake Valley, NV	1,300	35
Goldfield, NV	268	30
Las Vegas, NV	2,200,000	214
Reno, NV	504,000	214
Tonopah	2,000	58

Source: SRK, 2020

15.2Facilities

The Project has the three locations where facilities are located. The playa is the area that has the evaporation ponds, salt storage areas, liming plant, fuel tanks, wellfield maintenance facility and Avian Rehabilitation Center. The overall site layout can be seen in Figure 15-2. The evaporation ponds are located in the playa which also contains the brine production wells. The plant is located in town north of the highway. The administrative area is across the street to the southeast. Farther to the south are the process water supply wells.


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Source: Albemarle, 2021

Figure 15-2: Infrastructure Layout Map


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The plant area has the lithium carbonate plant, the lithium anhydrous plant, shipping and packaging facility, reagent building, propane and diesel tanks, boiler room, warehouse facility, plant maintenance facility, electrical and instrument shop, water storage tank, firewater system and dry and house/change house facility. The administrative area is located just north of the plant (across the street) and includes the main office/administrative building including the laboratory, safety office, and mine office. The Silver Peak substation is located approximately 4 mi northeast of the plant and administrative facilities. Figure 15-3 shows the plant area.

Source: Albemarle, 2021

Figure 15-3: Plant Layout Map


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15.3Evaporation Ponds

Evaporation ponds are used to concentrate lithium. The ponds are discussed in detail in Section 14.1. Figure 15-2 shows the location of the evaporation ponds.

15.4Harvested Salt Storage Areas

Salt is harvested from the evaporation ponds and stored in designated salt storage areas. The salt storage areas are located near the evaporation ponds and can be seen in Figure 15-2.

15.5Energy

15.5.1Power

Electricity is provided by NV Energy. Two 55 kV transmission lines feed the Silver Peak substation. One line connects to the Millers substation NE of Silver Peak and the other line connects to Goldfield to the east through the Alkali substation. A 55 kV line continues south from the Silver Peak substation to connect to the California power system. Figure 15-4 shows the regional transmission system and local substations.

Primary loads are the pumps in the brine wellfield (Playa) and the processing plant. Table 15.2 shows the average loads for 2017 to 2019 in megawatts per hour (MWh). Electricity cost ranges between US$0.06 to 0.07/kilowatts per hour (kWh).

Table 15.2: Silver Peak Power Consumption


Year	Playa (MWh)	Plant (MWh)	Total (MWh)
2017	8.6	4.0	12.7
2018	8.7	5.1	13.9
2019	8.8	4.4	13.1

Source: Albemarle, 2020


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Source: NV Energy, 2017 (Modified by SRK)

Figure 15-4: NV Energy Regional Transmission System

15.5.2Propane

Propane is used for heating and drying in the process facilities. The major propane loads include an 800 horsepower (hp) Donlee boiler, a 150 Johnston boiler, and a carbonate rotary dryer. The propane is supplied by a vendor located in Salt Lake City. The main propane supply tank is located on the plant site with a capacity of 20,000 gallons. There are several smaller tanks with approximately of 2,000 gallons used for forklifts and heating at various locations on the site. Propane is supplied by 12,000-gallon tanker trucks as needed four to six times per month.

15.5.3Diesel

The project has two diesel storage tanks on site. A 15,000-gallon storage tank, which fueled a now decommissioned boiler, and a new 10,000-gallon storage tank located in the playa area near the liming facility. The playa diesel tank is being permitted and once permitting is completed it will be filled by tanker truck delivery in 10,000-gallon loads from Las Vegas or Tonopah, NV. During the interim period fuel is delivered out of Tonopah in smaller 1,700-gallon quantities every other week. The fuel is delivered by truck typically in larger quantities during the winter month when salt harvesting is occurring during the winter months. The fuel is used for site and contractor vehicles.


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15.5.4Gasoline

Gasoline is delivered in smaller quantities, typically 3,000 gallons per load, and stored in a 5,000-gallon tank and used for site vehicles.

15.6Water and Pipelines

Potable water is supplied by ESCO. The County water system is used at all company provided houses or lots for general domestic purposes; office restrooms; dry house showers, restrooms, laundering, emergency eyewash/showers throughout the processing plants.

Albemarle owns and operates two freshwater wells located approximately two mi south of Silver Peak, near the ESCO fresh water well. These wells are used to provide process water to the boilers, firewater system and makeup water for process plant equipment. The freshwater wells are located approximately 150 ft apart in the same aquifer and are operated one at a time. The 60 and 75 hp pumps each have approximately 672 gallons per minute (gpm) capacity based on pump tests performed in 2019. Both fresh-water wells are discharged to the same 6-inch pipeline which runs to the plant water tank and on to the playa water tank located at the liming facility.


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16Market Studies

SRK was engaged by Albemarle to perform a preliminary market study, as required by S-K 1300 to support resource and reserve estimates for Albemarle’s mining operations. This report covers the Silver Peak operations. Silver Peak’s sole product, sourced from its brine resource, is technical grade lithium carbonate. The site does also produce a specialty anhydrous lithium hydroxide that uses lithium hydroxide brought onto site from other Albemarle facilities. This product has been excluded from the analysis as it is not directly sourced from the Silver Peak brine resource.

16.1Market Information

This section presents the summary findings for the preliminary market study completed by SRK on lithium.

16.1.1Lithium Market Introduction

Historically, (i.e., prior to the 2000s), the dominant use of lithium was in ceramics, glasses, and greases. However, with the boom in the use of portable electronic devices, starting with mobile phones and laptop computers and now covering a wide range of consumer electronic products, the use of lithium in lithium-ion batteries has grown from a fringe portion of the market to the most significant portion of demand. Over the last few years, the development of the battery electric vehicle (BEV) industry has further driven demand growth in lithium usage in lithium-ion batteries. If BEVs expand from their current niche position to a mainstream method of transportation, lithium demand in BEV batteries will overwhelm all historic uses and require multiples of historic levels of production.


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For existing producers, the major differences in cost between brine and hard rock include the following:

•Hard rock sources require additional mining, concentrating, and roasting/leaching costs.

•Brine sources require concentration prior to production, as natural brine solutions are generally too diluted to allow for precipitation of lithium in a salable form.

•Brine sources generally have a higher level of impurities (in solution) that require removal.

16.1.2Lithium Demand

In recent years, the lithium industry has gone through an evolution. The ceramic and glass sectors were traditionally the largest source of demand for lithium products globally. However, the development boom in demand for mobile consumer applications reliant upon lithium-ion batteries has structurally changed the industry. Much of this change, through approximately 2015, was driven by devices such as phones, laptop computers, tablet computers, and other devices (e.g., speakers, lights, wearables, etc.), as well as small mobility devices (e.g., electric bikes). However, the use of lithium in the recent nascent adoption of BEVs has quickly become the most important aspect of overall lithium demand, not just within the battery sector of demand, but for lithium demand on whole. This is seen in Figure 16-1, with BEV market share rapidly growing in importance and driving overall demand growth in the lithium industry.

Source: SRK, 2021

Figure 16-1: Global Electric Vehicle Lithium Demand


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Nonetheless, acceleration in the growth of the BEV industry appears to have a high probability. Demand growth in 2019 and early 2020 were relatively disappointing but were likely driven by external factors (e.g., changes in BEV subsidies in jurisdictions such as China as well as the global COVID-19 pandemic) that have largely moved through the system. The last quarter of 2020 easily set a record for global sales of BEVs. Therefore, even with the poor first half, SRK estimates that overall sales for 2020 jumped by 30% from 2019 sales. Even with COVID-19 still a major global health issue, SRK believes the lockdowns of early 2020 that created major economic damage will not be repeated as governments are learning to better manage the disease and vaccines are starting to become more prevalent globally. Most auto makers and other industry participants have invested heavily to expand into BEV production and transition overall toward expectations of future dominant consumption of EVs instead of internal combustion engine (ICE)-based vehicles. However, in SRK’s opinion, there remain several barriers to BEVs becoming the dominant type of vehicle sales, including:

•Costs

•Changes of buyer perceptions

•Raw material availability

Currently, for BEVs to have a range that is competitive with internal combustion engine (ICE)-powered cars, they have to have a large and expensive battery pack. Based on recent estimates by clean energy researcher BloombergNEF (BNEF), in 2020, the battery pack comprised approximately one third of the total up-front cost of a new BEV. For higher end vehicles, this cost is manageable in the context of the overall vehicle cost. However, for entry level vehicles, the cost of the battery pack remains a hurdle to BEVs being competitive with ICE cars. The price of batteries has been rapidly decreasing as the scale of production has increased and technological advances have focused on cost reduction. A 2019 prediction by BNEF assumes that these trends will continue and the threshold where BEVs become generally affordable (US$90/kWh on unit basis for the battery pack) is predicted to occur in 2022. Notably, by the end of 2020, BNEF has commented that battery pack costs first crossed the US$100/kWh threshold in 2020 in electric buses in China and has assumed further reductions in its projected cost profile (e.g., the new 2030 pack price is forecast as US$58/kWh). This outperformance of actual cost and technological improvements versus forecasts has been a common theme in the industry.


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following the Toyota Prius strategy), a typical buyer will likely be turned off by this style of marketing. Further, to date, auto manufactures have focused on developing electric vehicles as sedans and compact cars and have not targeted the booming Sport Utility Vehicles (SUV) and pickup truck market. However, these trends are changing, with Tesla producing cars that generally have widespread appeal from a style standpoint and take advantage of the inherent performance advantages of BEVs (e.g., outperformance relative to ICEs for handling and acceleration) and leading all other global manufacturers in sales. In addition, SUV BEV models started sales in 2020 and BEV pickup truck sales are expected to start in 2021.

In SRK’s opinion, raw materials and supply chain limitations are the other major risk to widespread BEV adoption. SRK does not expect this bottleneck to come from lithium, at least in the short- to mid-term (longer term, it may become an issue, but widespread recycling and production from non-traditional lithium sources such as clays or low-concentration brines can mitigate this risk). Downstream production (e.g., battery-grade lithium carbonate/hydroxide, cathode precursor, cathodes, batteries, etc.) also appears to have a low risk of creating a bottleneck, as extensive investment in this manufacturing capacity has already happened and continues. However, other raw materials, especially nickel and cobalt, both of which are critical to the key cathode technology of nickel-manganese-cobalt (NMC) and nickel-cobalt-aluminum (NCA), appear to create future supply risks. SRK believes it is likely that additional nickel supply can be developed at a cost (i.e., higher nickel prices will be required), but adequate cobalt supply to maintain current levels of cobalt in batteries will likely not be feasible. The most likely solution to this bottleneck will be the elimination (or reduction to minimal levels) of cobalt in BEV batteries through technological improvements.

Overall, given the discussion above, SRK expects near- to mid-term growth in the BEV market to reflect late-2020 and 2021 results to date (i.e., robust) versus reverting to slower 2019 and early 2020 results. However, there remains the risk that BEVs remain a niche vehicle or are eliminated completely. The most serious risks that SRK can foresee are technology related, such as substitution of alternative technology (e.g., fuel cells make a comeback or non-lithium batteries such as sodium-ion eventually overtake lithium-based batteries), battery costs plateau, and BEVs remain uncompetitive on low-cost vehicles or cobalt cannot be substituted out of batteries and adequate supply cannot be sourced. Under any of these three scenarios, demand for lithium from BEVs would be severely curtailed (if not eliminated). However, overall SRK does not view these downside scenarios as the most likely outcomes for the sector.

To quantify potential demand growth, SRK constructed a basic demand model. In its model, SRK ran three scenarios through 2030:

•The first scenario, as the base case, assumes that demand growth will continue the robust trend of late 2020/early 2021 as government subsidies bridge the gap to lower battery costs and the associated reduced costs make EVs fully competitive. Further, the wide range of new models under development by the major auto manufacturers will appeal to the typical consumer. Growth rates start to taper in the latter half of the decade as BEVs hit around 45% of sales in 2028 and continue to decline given the high penetration. 2030 BEV sales are predicted as 55% of global automotive sales in this scenario.


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•The third scenario, as the low scenario, assumes that the demand growth spike in late 2020 and early 2021 is not sustained as lower income population stays away from BEVs. Around 2023, with battery prices falling (although maybe not fully competitive), growth slowly picks up as the average consumers are slower to accept a major change to a BEV. Under this significantly curtailed growth scenario, BEV sales only achieve 7.5% of global vehicle sales in the model period. This scenario reflects a situation with battery costs failing to fall below ICE costs or development of alternative technologies that substitute away from BEVs (e.g., fuel cells).

16.1.3Lithium Supply


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although Wodgina and Bald Hill have subsequently closed again), and five new mines have come online (Salar de Olaroz, Mt. Marion, Pilgangoora, Altura, and Yiliping with Altura closing at the end of 2020). At the same time, the existing operations, including Greenbushes and Atacama, have expanded, but nonetheless, this major increase in supply has reduced the dominance of Greenbushes and Salar de Atacama, which, when combined, SRK estimates produced approximately 50% of global lithium in 2020.

Note that while all of these projects are well advanced, with most already being financed and construction underway or the projects on care and maintenance, awaiting restart, if lithium prices drop back to levels seen in 2019 and 2020, projects in the financing phase may not receive development capital (although SRK has already eliminated those projects it believes will be the most difficult to finance), and some of the higher cost producers may not expand as predicted. Nonetheless, given the demand outlook discussed above, SRK believes it is likely these projects will be incentivized to reach these production levels. Most, if not all, of this production increase is likely to happen even at current prices (e.g., Salar de Atacama expansions), although higher prices would increase the probability of these projects rapidly advancing to production with more easily available capital. In short, SRK has already discounted ramp-up timing and performance for expected delays and inability to meet targets and has tied project production rates to expected demand growth, but there nonetheless remains uncertainty in the forecast.

Beyond 2025, the supply pipeline still has remaining development capacity as well. The 2025 forecast of approximately 1,200,000 t LCE assumes several of the advanced projects are either not producing or not producing at full capacity. In addition, there are further moderate quality brine projects that are not included in this forecast given their long timelines to development. Finally, existing large producers have announced further expansions that were paused with the recent low-price environment and are not likely to come to market in this period so are not included.

16.1.4Pricing Forecast

As discussed above, while lithium demand has been increasing (driven by the BEV demand boom), the lithium market is currently in an oversupply situation as supply has been increasing even faster. In fact, SRK believes this market surplus has been in place since at least 2016. With significant additional production coming online from 2021 through 2025 (projects currently under construction or under financing), demand will have to accelerate its rate of growth to keep up with potential supply.

The historical commodity pricing for lithium carbonate and lithium hydroxide is provided in Figure 16‑2.


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Source: S&P Global Market Intelligence, 2022. Note - Chart date range from 1/31/2010 to 12/31/2021.

Figure 16-2: Historic Lithium Prices (Lithium Carbonate/Hydroxide)

Figure 16‑3 presents a comparison of SRK’s three demand scenarios against its base-case supply growth forecast

Source: SRK, 2020

Figure 16-3: Supply/Demand Scenarios (2016 to 2023)


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Although there is a near-term market oversupply of lithium, in the long-term, even with aggressive supply growth to date, significant new supply will need to be incentivized to fulfill demand requirements for the base-case demand projection. Therefore, in SRK’s opinion, the lithium price will need to exceed the production cost for new projects and provide an adequate rate of return on investment to justify development. Overall, SRK believes essentially all lithium producers currently producing or in SRK’s supply growth forecast would be profitable at US$9,000/t LCE or less. However, additional projects not in this outlook are clearly needed to meet demand forecasts as a major supply gap develops in the latter half of the decade based only upon the high probability projects included in SRK’s forecast. Therefore, SRK forecasts a price of US$10,000/t for technical grade lithium carbonate (CIF terms) as its long-term price. This price should be adequate to incentivize all projects included in SRK’s supply outlook, shown in Table 16.1, plus additional projects required to close the projected supply gap show in 2025 and beyond (many of the earlier stage projects are third to fourth quartile and therefore should be profitable at this pricing level although production costs for other supply sources such as recycling and non-traditional minerals / brines remains highly uncertain). Due to typical price volatility, SRK expects in the short-term prices may spike well above or fall well below this level, but from an average pricing perspective, in SRK’s opinion, this forecast is reasonable.

16.2Product Sales

Silver Peak is an operating lithium mine. The mine pumps a subsurface brine that is rich in lithium to evaporation ponds on the surface of the playa. These evaporation ponds concentrate the brine utilizing solar energy. Lithium chloride is concentrated to approximately 0.54% lithium at which point it is processed into technical grade lithium carbonate at the site’s production facilities. Specifications for this product are provided in Table 16.1.

Table 16.1: Technical Grade Lithium Carbonate Specifications


Chemical	Specification
Li2CO3	min.	99%
Cl	max.	0.015%
K	max.	0.001%
Na	max.	0.08%
Mg	max.	0.01%
SO4	max.	0.05%
Fe2O3	max.	0.003%
Ca	max.	0.016%
Loss at 550°C	max.	0.75%

Source: Albemarle 2017

Historic production from the Silver Peak facility is presented in Table 16.2.

Table 16.2: Historic Silver Peak Annual Production Rate (Metric Tonnes)


	2015	2016	2017	2018	2019	2020e
Technical Grade Lithium Carbonate	5,410	3,849	4,471	6,565	3,586	3,920

Note 2015-2019 data reflects actual production, 2020 production is an estimate

Source: Albemarle 2020


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Looking forward, Albemarle is targeting increasing production from Silver Peak to fully utilize the facility. As seen in Table 16.2, the facility has produced as much as 6,500 tonnes of Li2CO3 in recent years (specifically 2018), although not on a sustainable basis. Current active evaporation ponds do not have the capacity to sustain this production rate and the 2018 production relied upon depleting pond inventory. Going forward, Albemarle plans to rehabilitate existing ponds that are out of use to increase the evaporation capacity to bring sustained pond capacity closer to the capacity of the production facilities and achieve higher production rates on a sustained basis (note, these production rates are dependent upon lithium concentration in brine remaining at or near recent levels, as lithium concentration drops over time, the production rate will also fall unless pumping rates and evaporation pond capacity can be increased).

The technical grade lithium carbonate product from Silver Peak is a marketable lithium chemical that can be sold into the open market. However, Albemarle is an integrated chemical manufacturing company that operates multiple downstream lithium processing facilities and also has the option of utilizing the production from Silver Peak for further processing to develop value-add products (e.g., battery grade lithium carbonate or hydroxide). Therefore, a proportion of the production from Silver Peak is utilized as source product for Albemarle’s downstream processing facilities. In recent years, the proportion of production consumed internally has averaged approximately 65% with the remainder sold to third parties.

While a portion of the production may be consumed internally, for the purposes of this reserve estimate, SRK has assumed that 100% of the production from Silver Peak will be sold to third parties and has therefore utilized a typical third-party market price, without any adjustments, as the basis of the reserve estimate.

16.3Contracts and Status

As outlined above, the lithium carbonate produced from Silver Peak is either consumed internally for downstream value-add production or sold to third parties. These third-party sales may be completed in spot transactions or the lithium carbonate may be utilized to satisfy sales contracts for lithium chemicals held at the consolidated corporate Albemarle level or its affiliates. Silver Peak also has direct offtake contracts to third parties totaling 2,000 tonnes per year. Of this, around 1,600 t is sold under long term or annual contracts with the rest being sold at spot prices. The balance of Silver Peak’s annual production volumes are used internally as raw material for downstream lithium salts.

SRK is not aware of any other material contracts for Silver Peak.


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17Environmental, Permitting and Social Factors

The following sections discuss reasonably available information on environmental, permitting, and social or community factors related to the SPLO. Where appropriate, recommendations for additional investigation(s), or expansion of existing baseline data collection programs, are provided.

17.1Environmental Studies

The SPLO is in a rural area approximately 30 mi southwest of Tonopah, in Esmeralda County, Nevada. It is located in Clayton Valley, an arid valley historically covered with dry lake beds (playas). The operation borders the small unincorporated town of Silver Peak, Nevada. Albemarle uses the SPLO for the production of lithium brines, which are used to make lithium carbonate (Li2CO3) and, to a lesser degree, lithium hydroxide (LiOH). The site covers approximately 13,753 acres and is dominated by large evaporation ponds on the valley floor; some in use and filled with brine while others are dry and temporarily unused. Actual surface disturbance associated with the operations is 7,390 acres, primarily associated with the evaporation ponds. The manufacturing and administrative activities are confined to an area approximately 20 acres in size, portions of which were previously used for silver mining through the early twentieth century (DOE, 2010)

Albemarle Corporation and its predecessor companies (Rockwood Lithium, Inc., Chemetall Foote Corporation, Cyprus Foote Minerals, and Foote Minerals) have operated at the Silver Peak site since 1966, significantly pre-dating most all environmental statutes and regulations, including NEPA and subsequent water, air, and waste regulations. Baseline data collection as part of environmental impact analyses was never conducted comprehensively, though some hydrogeological investigations were performed as part of project development. The DOE conducted a limited NEPA EA in 2010 of its proposal to partially fund the following activities:

•The establishment of a new 5,000 metric tonne per year lithium hydroxide plant at an existing Chemetall facility in Kings Mountain, North Carolina

•The refurbishment and expansion of an existing lithium brine production facility and lithium carbonate plant in Silver Peak, Nevada

Both projects were intended to support the anticipated growth in the BEV industry and hybrid electric vehicle (HEV) industry. The following information was obtained primarily from early studies, publicly available databases, and information provided in the Final Environmental Assessment for Chemetall Foote Corporation Electric Drive Vehicle Battery and Component Manufacturing Initiative Kings Mountain, NC and Silver Peak, NV (DOE, 2010), which analyzed the impact to a limited number of environmental resources.


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The SPLO currently has a permitting action before the BLM for the construction of two new large evaporation ponds, as well as a new strong brine complex with lined ponds to replace existing unlined ponds and a small area of existing ponds that overlapped onto BLM-administered public land but were not properly authorized. Baseline reports for these areas were prepared by SWCA Environmental Consultants for use by the BLM in the EA of these actions, and include studies for the pale kangaroo mouse, soils, ecological sites, vegetation, noxious and invasive weeds, migratory birds, eagles and raptors, and cultural resources. SRK did not have access to these reports for this assessment. Separately, SPLO conducted a site evaluation for the presence of Tiehm’s buckwheat and observed no evidence of any buckwheat species within the SPLO project property boundaries

In addition, several broad-scope environmental studies have also been conducted within Clayton Valley, but not specifically for the SPLO. While the studies were not officially sanctioned by the BLM as part of an active mining plan, each study does follow approved protocols for data collection with respect to the resource under investigation per BLM Instruction Memorandum NV-2011-004 Guidance for Permitting 3809 Plans of Operation (BLM, 2010). The botanical inventory was initiated early due to the time critical nature of plant identification, which is generally limited to the spring of the year in most locations in Nevada. The wildlife inventory was conducted concurrently as an opportunistic sampling event. The following is a summary of the relevant environmental studies conducted in the valley to date.

17.1.1Air Quality

The NDEP – Bureau of Air Quality Planning (BAQP), which is responsible for monitoring air quality for each of the criteria pollutants and assessing compliance, has promulgated rules governing ambient air quality in the State of Nevada. Esmeralda County is in attainment for all criteria air pollutants. Immediately bordering the SPLO to the north and west is the town of Silver Peak, which contains private residences, a small school, a post office, a Fire/Emergency Medical Services (EMS) station, a small church, a park, and a tavern. The closest occupied structures to the SPLO (measured from the Administrative Office) are approximately 1,000 ft away. The DOE (2010) EA concluded that exhaust emissions from equipment used in construction, coupled with likely fugitive dust emissions, could cause minor, short-term degradation of local air quality.

The SPLO operates via a Class II Air Quality Operating Permit issued by the NDEP – Bureau of Air Pollution Control (BAPC). This permit applies to most of the equipment used and materials handling activities in the lithium carbonate and lithium hydroxide manufacturing processes. The SPLO currently, and historically, has been in full compliance with their air quality operating permits and has had no reported violations.

17.1.2Site Hydrology/Hydrogeology and Background Groundwater Quality

The SPLO is located within the Clayton Valley Hydrographic Area, which covers 1,437 square kilometers (km2), and is designated as Hydrographic Area No. 143 of the Central Region, Hydrographic Basin 10. Clayton Valley, a topographically closed basin bounded by low to medium altitude mountain ranges, is a graben structure. Seismic and gravity surveys reveal numerous horst and graben features as the basin deepens to the east-southeast. Extensive faulting has created hydrologic barriers, resulting in the accumulation of lithium brines below the playa surface. Jennings (2010) states that satellite imagery and geological mapping identifies several parallel north-south trending faults that are semi-permeable barriers separating the freshwater aquifer on the west from


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the brines beneath the playa. Stratigraphic barriers occur around much of the playa, isolating it from significant freshwater inflows originating in the mountains.

Recharge occurs as underflow into the basin from Big Smoky Valley in the north and Alkali Spring Valley in the west. Recharge derived from precipitation in the basin is low due to high evapotranspiration rates.

Extensive exploration drilling has occurred to define the naturally occurring brine resource and hydrogeology of the Clayton Valley playa and surrounding areas. Freshwater does not exist near the pond system of the playa. However, upgradient of the playa margin yields groundwater that is potable. A monitoring well is located between the R-2 process pond and the freshwater wells (located upgradient) to define the groundwater quality between the playa aquifer and the freshwater aquifer. The topographic surface at the freshwater wells is about 390 ft higher in elevation than the playa surface and the direction of the groundwater flow is clearly toward the playa.

The groundwater pumped from the Clayton Valley playa produces a brine solution with very high TDS concentrations, averaging 139,000 parts per million (ppm). Stormwater runoff and accumulation is directed to the closed hydrogeologic system of Clayton Valley.

17.1.3General Wildlife

A review conducted in 2011, indicated that the dark kangaroo mouse (Microdipodops megacephalus) and the pale kangaroo mouse (Microdipodops pallidus) may occur in the area. The dark kangaroo mouse is listed as a sensitive species by the Nevada BLM, and both species are protected by the State of Nevada. At the same time, the Nevada Department of Wildlife (NDOW) reported that bighorn sheep (Ovis canadensis) and mule deer (Odocoileus hemionus) distributions exist on Mineral Ridge, north and west of the community of Silver Peak. The 2011 review also cited the potential presence of desert kangaroo rat (Dipodomys deserti), Merriam’s kangaroo rat (Dipodomys merriami), Great Basin whiptail (Cnemidophorus tigris tigris) and the zebra-tailed lizard (Callisaurus draconoides). The U.S. Fish and Wildlife Service (FWS) had no listings for threatened or endangered species in the area.

Golden eagle (Aquila chrysaetos) and raptor aerial surveys of the area were conducted in the spring of 2016. During the first aerial survey conducted in May, four eagle nests were observed. The four nests were again monitored in June. All four nests were inactive in June 2016. No updated information was available for this report.

17.1.4Avian Wildlife

A comprehensive assessment of avian wildlife in and around the area of the SPLO was completed as part of the Avian Protection Program (APP) (EDM, 2013). Clayton Valley lies in an arid region at the northern edge of the Mojave Desert which represents a transition from the hot Sonoran Desert to the cooler and higher Great Basin. The landscape is dominated by Nevada’s driest habitat, salt desert scrub, with isolated ephemeral wetlands and playas. According to the Great Basin Bird Observatory (GBBO, 2010), salt desert scrub and ephemeral wetlands and playas constitute important habitat for several priority bird species in Nevada. Although the breeding bird population of Esmeralda County is small, several hundred species of birds migrate through the county (Esmeralda County Commissioners, 2010).


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17.1.5Botanical Inventories

Based on a review of data provided by the Southwestern Regional Gap Analysis Program (SWReGAP) and a biological survey conducted on June 16, 2011, the area generally consists of three vegetative communities: inter-mountain basins playa, inter-mountain basins greasewood flat, and inter-mountain basins active and stabilized dunes (U.S. Geologic Survey [USGS], 2005). Additional seasonally sensitive botanical inventories were conducted in the area between June 19 and June 21, 2016. Playa habitat types were generally void of vegetation, while greasewood flats were dominated by black greasewood (Sarcobatus vermiculatus), Bailey’s greasewood (Sarcobatus baileyi), four-wing saltbush (Atriplex canescens), Mojave seablite (Suaeda moquinii), shadscale (Atriplex confertifolia), pickleweed (Salicornia ssp.) and inland saltgrass (Distichlis spicata).

17.1.6Cultural Inventories

No cultural inventories appear to have been conducted within the SPLO areas of disturbance, including the process plant site. In general, the valley playas are devoid of cultural artifacts and easily cleared during baseline data collection. The presence and complexity of cultural resources does, however, tend to increase toward the playa edges and adjacent dune systems. (DOE, 2010)

17.1.7Known Environmental Issues

There are currently no known environmental issues that could materially impact Albemarle’s ability to extract SPLO resources or reserves.

17.2Environmental Management Planning

Environmental management plans have been prepared as part of the state and federal permitting processes authorizing mineral extraction and beneficiation operations for the SPLO. Requisite state permitting environmental management plans include (NAC 445A.398 and NAC 519A.270):

•Fluid Management Plan

•Monitoring Plan

•Emergency Response Plan

•Petroleum Contaminated Soil (PCS) Management Plan

•Temporary and Seasonal Closure plans

•Tentative Plan for Permanent Closure

•Reclamation Plan

Federal permitting environmental management plans incorporate many of the same plans as are required by the State of Nevada. These are specified in Title 43 of the Code of Federal Regulations Part 3809.401(b) (43 CFR § 3809.401(b)) and include:

•Water Management Plan

•Rock Characterization and Handling Plan (not applicable to SPLO)

•Spill Contingency Plan

•Reclamation Plan

•Monitoring Plan

•Interim Management Plan

The state environmental management plans were submitted to the NDEP-BMRR as part of the Water Pollution Control Permit (WPCP) Renewal Application (Rockwood Lithium Inc., 2016). The


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federal management plans do not appear to have been specifically and formally submitted as part of the SPLO Plan of Operations (Rockwood Lithium Inc., 2017), but most overlap with state counterparts.

17.2.1Waste Management

The major materials used at the SPLO include various salts, and acids. There is a diesel fueling station onsite, as well as several water tanks and a hydrochloric acid tank system. The facility has a Hazardous Material Storage Permit issued by the Nevada Fire Marshall. The facility also holds a Class 5 license from the Nevada Board for the Regulation of Liquefied Petroleum Gas for its storage of liquefied petroleum gas (propane).

The site is located in U.S. Environmental Protection Agency (EPA) Region 9 and operates as a very small quantity generator (VSQG) under the Resource Conservation and Recovery Act (RCRA) waste regulations, as the SPLO generates less than 220 lb (100 kg) of hazardous waste or less than 2.2 lb (1 kg) of acute hazardous waste per month, or less than 220 pounds of spill residue per month. In fact, the SPLO typically generates little or no hazardous waste.

All non-hazardous solid waste generated at the plant is disposed of in an on-site landfill, permitted by the NDEP. Petroleum contaminated soil at the site, resulting from spills, leaks, and drips of various petroleum hydrocarbon products used at the site, are managed through the PCS Management Plan (June 2009) that documents spills at the site from 1997 to 2006. The facility currently operates two bioremediation cells for the treatment of PCS. There are no known off-site properties with areas of contamination or federal Superfund sites within the immediate vicinity of the facility.

17.2.2Tailings Disposal

While not tailings in the traditional hardrock mining sense, the SPLO does generate a solid residue that requires management during operations and closure. As part of the lithium extraction process, it is necessary to remove magnesium from the Clayton Valley brines. This is accomplished by treating the brines with slaked lime (Ca(OH)2). The lime treatment results in the production of a lime solid, consisting mainly of magnesium hydroxide (Mg(OH)2) and calcium sulfate (CaSO4), which is collected and deposited for final storage in the Lime Solids Pond (LS Pond; a.k.a., R2 Tailings Pond).

TCLP analysis of the lime solids conducted in October 1988, indicated concentrations below detection levels for cadmium, chromium, lead, mercury, selenium, and silver, but detectable levels of arsenic (0.02 mg/L) and barium (0.08 mg/L) in the leachate, both of which are regularly observed in brine and freshwater samples. More recent analyses were not available. SRK recommends that more comprehensive characterization of this material be undertaken as part of final closure of the facility.

Final reclamation of the LS Pond will involve decanting all fluids away from the pond to allow the solids to dewater. The containment berm will be breached at the lowest part to ensure the surface drains freely and remains dry. A four-strand barbed wire fence will be erected around the perimeter to prevent access to the surface of the pond. The lime solids should solidify but are not likely to support vehicular traffic. If it is later determined that the dried material in the LS Pond represents dust or other hazards, the permittee/operator will cooperate with appropriate state (and federal) regulatory agencies to correct the situation. If the correction includes capping or covering the pond, the


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appropriate actions will be included in the final closure plan. Inspection of this surface-crusted facility during heavy winds suggests that such remedial action is not likely to be necessary.

17.2.3Site Monitoring

Monitoring of the SPLO is accomplished on multiple levels and across various regulatory programs. These include:

•Air quality and emissions monitoring through the Class II Air Quality Operating Permit

•Surface disturbances, reclamation and revegetation monitoring through the Plan of Operations and Reclamation Permit

•Terrestrial and avian wildlife mortalities and mitigative protection measures monitoring through the Industrial Artificial Pond Permit and Avian Protection Program

•Solution impoundment embankments and appurtenant inspections as part of the Dam Safety Permit

•Process fluids, surface, and groundwater resources (including contamination from petroleum contaminated soils) through the Water Pollution Control Permit

The groundwater in Clayton Valley is essentially the “ore” for the SPLO, and thus represents the water quality of the mine area. In the vicinity of the plant and town, monitoring of the freshwater aquifer through a pumping well is performed quarterly. Leak detection is conducted to monitor encroachment from the brine aquifer and surface ponds into the freshwater aquifer via the monitor well (R-2W).

17.2.4Human Health and Safety

The site has prepared a Safety Manual that includes an Emergency Response Plan (ERP) for the SPLO. The ERP provides a risk and vulnerability assessment that rates hazards from low to high for probability and severity. The greatest hazards are associated with a propane tank failure or a boiler explosion, which were both rated high for severity but low for probability. Hazards rated as having both moderate probability and moderate severity include the potential for a propane line failure, a hydrochloric acid spill, and a hydroxide spill (either solution or powder). The area has a low probability for earthquake hazards. The plan outlines safety procedures, communications, and response procedures, including evacuation procedures, to protect workers from hazardous conditions. The facility is located in an unoccupied area separated from residential communities. The evaporation ponds, process facilities, and some of the other ponds are surrounded by security fencing to restrict public access.

17.3Project Permitting

17.3.1Active Permits

The SPLO includes both public and private lands within Esmeralda County, Nevada. The Project, therefore, falls under the jurisdiction and permitting requirements of Esmeralda County, the State of Nevada (principally the NDEP-BMRR), and federally through the BLM. The list of permits and authorizations under which the SPLO operates is presented in Table 17.1: SPLO Project Permits.


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Table 17.1: SPLO Project Permits


Permit/Approval	Issuing Authority	Permit Purpose	Status
Federal Permits Approvals and Registrations
Plan of Operations	BLM	Prevent unnecessary or undue degradation of public lands	BLM Case No. N-072542 Geothermal Lease No. NVN-87008 BLM Bond No. NVB001312 Surety Bond No. 105537179
Rights-of-Way (RoW) Grant	BLM	Authorization to use public land for things such as electric transmission lines, communication sites, roads, trails, fiber optic lines, canals, flumes, pipelines, and reservoirs, etc.	RoW N-44618 for access and pipeline to pumping wells (renewed annually)
Explosives Permit	U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives (BATFE)/U.S. Department of Homeland Security (DHS)	Storage and use of explosives	License No. 9-NV-009-33-9F-00385 Note: This permit is no longer held as it was deemed not necessary for the materials used/stored onsite.
U.S. Environmental Protection Agency (EPA) Hazardous Waste ID No.	EPA	Registration as a generator of wastes regulated as hazardous	SPLO is currently classified as a Very Small Quantity Generator (VSQG)
Migratory Bird Special Purpose Utility Permit	Department of the Interior – Fish & Wildlife Service (FWS)	Required for utilities to collect, transport, and temporarily possess migratory birds found dead on utility property, structures, and rights-of-way as well as, in emergency circumstances, relocate or destroy active nests	MB38854B-0
Fish and Wildlife Rehabilitation Permit	FWS		MB38854B-3
Waters of the U.S. (WOTUS) Jurisdictional Determination	U.S. Army Corps of Engineers (USACE)	Implementation of Section 404 of the Clean Water Act (CWA) and Sections 9 and 10 of the Rivers and Harbors Act of 1899	1992 NDEP correspondence determined that stormwater runoff from the SPLO discharges to a· dry playa in a closed hydrological basin and is not considered a water of the United States
Federal Communications Commission Permit	Federal Communications Commission (FCC)	Frequency registrations for radio/microwave communication facilities	Registration No. 0021049176
State of Nevada Permits Approvals and Registrations
Annual Status and Production Report	NDM Commission on Mineral Resources	Operator shall submit to the Administrator a report relating to the annual status and production of the mine for the preceding calendar year	Reported by April 15 for each preceding year
Surface Area Disturbance Permit	NDEP/ BAPC	Regulates airborne emissions from surface disturbance activities	Included as Section VII of SPLO Class II Air Quality Operating Permit
Air Quality Operating Permit	NDEP/BAPC	Regulates project air emissions from stationary sources	AP2819-0050.03
Mercury Operating Permit to Construct	NDEP/Bureau of Air Quality Planning	Requires use of Nevada Maximum Achievable Control Technology (MACT) for all thermal units that have the potential to emit mercury	NA
Mining Reclamation Permit	NDEP/ BMRR	Reclamation of surface disturbance due to mining and mineral processing; includes financial assurance requirements	0092
Groundwater Permit / General Permit to Operate and Discharge Large-Capacity Septic System	NDEP/ Bureau of Water Pollution Control (BWPC)	Prevents degradation of waters of the state from discharges wastewater, dewatering water, or water from industrial processes.	NS2013501_DTS08-02-2013
Water Pollution Control Permit (WPCP)	NDEP/BMRR	Prevent degradation of waters of the state from mining, establishes minimum facility design and containment requirements	NEV0070005


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National Pollutant Discharge Elimination System (NPDES)	NDEP/ BWPC		Waiver; Closed hydrological basin
Approval to Operate a Solid Waste System	NDEP/Bureau of Sustainable Materials Management (BSMM)	Authorization to operate an on-site landfill	SW321
Hazardous Waste Management Permit	NDEP/BSMM	Management of non-Bevill Exclusion mining/hazardous wastes	59084; 5-5062-01
General Industrial Stormwater Discharge Permits	NDEP/BWPC	Management of site stormwater discharges in compliance with federal CWA	Waiver; Closed hydrological basin
Permit to Appropriate Water/Change Point of Diversion	NDWR	Water rights appropriation	49988, 44251, 44270, 44253, 44268, 44267, 44252, 44255, 44256, 44257, 44258, 44269, 44261, 44260, 52918, 52919, 52920, and 52921
Permit to Construct a Dam	NDWR	Regulate any impoundment higher than 20 feet or impounding more than 20 acre feet (AF)	J-735
Potable Water System Permit	Nevada Bureau of Safe Drinking Water	Water system for drinking water and other domestic uses (e.g., lavatories)	Potable water is purchased from city water supply.
Sewage Disposal System Permit	NDEP/BWPC	Construction and operation of Onsite Sewage Disposal System (OSDS)	GNEV0SDS09-0403 (cancelled and moved over to NS2013501_DTS08-02-2013)
Industrial Artificial Pond Permit	Nevada Department of Wildlife (NDOW)	Regulate artificial bodies of water containing chemicals that threaten wildlife	S-37036
Wildlife Rehabilitation Permit	NDOW	Authorization to capture, transport, rehabilitate, release, and euthanize sick, injured or orphaned birds and mammals	License No. 427565
Hazardous Materials Permit	Nevada Fire Marshal	Store a hazardous material in excess of the amount set forth in the International Fire Code, 2006	97426 (expires February 28, 2022)
Encroachment Permit	Nevada Department of Transportation (NDOT)	Permits for permanent installations within State ROWs and in areas maintained by the State	Documents indicate having a NDOT permit for “Oversized hauling or changes in traffic pattern”. This was a one-time permit to haul a drill rig.
Fire and Life Safety Permit	Nevada Fire Marshal	Review of non-structural features of fire and life safety and flammable reagent storage	NA
Liquefied Petroleum Gas License	Nevada Board of the Regulation of Liquefied Petroleum Gas (LPG)	Tank specification and installation, handling, and safety requirements	No. 5-5533-01. Fee paid and license re-issued annually (expires May 31, 2021)
State Business License	Nevada Secretary of State	License to operate in the state of Nevada	State of Nevada Business license for ALBEMARLE U.S., INC.; NV20021460735
Local Permits for Esmeralda County
Building Permits	Esmeralda County Building Planning Department	Compliance with local building standards/requirements	None
Conditional Use Permit	Esmeralda County Building Planning Department	Compliance with applicable zoning ordinances	None
County Road Use and Maintenance Permit/Agreement	Esmeralda County Building Planning Department	Use and maintenance of county roads	Road through facility is private, but Albemarle allows use and maintains for public through agreement with county

Source: Albemarle, 2020


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17.3.2Current and Anticipated Permitting Activities

Several strong brine ponds are undergoing salt excavation and lining activities using HDPE in order to increase recovery efficiency and reduce infiltration losses. While this is not a permit compliance-related activity, authorization for embankment modifications is required by the NDWR prior to construction activities.

As noted in Section 17.1, Albemarle has submitted to the BLM a plan of operations amendment for the construction and operation of additional evaporation ponds (12 West and 13 North). The current Proposed Action includes a nominal expansion of the existing plan boundary onto surface lands not currently claimed or controlled by Albemarle. While the consensus appears to be that the BLM is within its authority to grant the pond and plan boundary expansion, should the agency deny this request, Albemarle is prepared to scale back the expansion plans to only use surface lands within its currently authorized plan boundary. The plan amendment will require appropriate NEPA documentation and review as well as a public comment period prior to final agency decision.

Once ponds 12 West and 13 North are permitted, Albemarle intends to pursue the authorization of several new ponds, located principally on private lands owned or controlled by the company. While actions strictly limited to private land should be solely under the jurisdiction of the NDEP-BMRR, the BLM may exercise some review or approval authority on these new constructions under NEPA and Council on Environmental Quality (CEQ) regulations concerning connected actions. The final determination on potential connectively will not be made until the proposal for new ponds is formally presented to both agencies, and therefore remains a risk to the permitting and construction schedule if federal involvement is required.

Between August 2021 and Q3 2022, Albemarle will be working closely with the NDWR on a number of temporary and permanent water rights applications, with the initial filing for the construction of new wells and the redevelopment of existing wells having occurred in May 2021. Temporary permits are issued for only one year and will need to be converted to permanent rights once expired.

Construction of a new lime system for dosing of the brine ponds will require modification of the current air quality permit and updating of the WPCP to reflect the proposed changes in the process flow and containment systems. Similarly, optimization of the carbonate system will require further modifications to these permits, both activities of which will not likely occur until mid to late 2022.

17.3.3Performance or Reclamation Bonding

Pursuant to state and federal regulation, any operator who conducts mining operations under an approved plan of operations or reclamation permit must furnish a bond in an amount sufficient for stabilizing and reclaiming all areas disturbed by the operations. The BLM Tonopah Field Office and the NDEP-BMRR received an updated Reclamation Cost Estimate (RCE) for the SPLO on September 3, 2020, in support of a three-year bond review and update. The agencies reviewed this updated RCE and approved the amount of $8,164,980. The amount is based on the operator complying with all applicable operating and reclamation requirements as outlined in the regulations at 43 CFR § 3809.420 and NAC 519A.350 et seq. Additional details are provided in Section 16.5 Mine Closure.


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17.4Mine Reclamation and Closure

17.4.1Closure Planning

Mine closure and reclamation requirements are addressed on several levels and by a several authorities:

•Federal requirements are generally covered in the plan of operations under the BLM’s 43 CFR § 3809.401(b)(3) which state that, at the earliest feasible time, the operator shall reclaim the area disturbed, except to the extent necessary to preserve evidence of mineralization, by taking reasonable measures to prevent or control on-site and off-site damage of the federal lands.

•State of Nevada requirements are stipulated in both the Water Pollution Control Permit’s Tentative Plans for Permanent Closure (TPPC) and Final Plans for Permanent Closure (FPPC) under NAC 445A.396 and 445A.446/.447, respectively, and the Reclamation Permit requirements under NAC 519A.

•On a local level, the 2013 Esmeralda County Public Lands Policy Plan, Policy 7-7 for Mineral and Geothermal Resources: Reclamation of geothermal, mine, or exploration sites should be coordinated with the Esmeralda County Commission, and should consider the post-mine use of buildings, access roads, water developments, and other infrastructure for further economic development by industry, as well as historic and other uses pursuant to the federal Recreation and Public Purposes (R&PP) Act.

The state closure and stabilization requirements under the WPCP pertain to process and non-process components (sources), such as mill components, heap leach pads, tailings impoundments, pits, pit lakes, waste rock dumps, ore stockpiles, fueling facilities, and any other associated mine components that, if not properly managed during operation and closure, could potentially lead to the degradation of waters of the State. A mining facility operator/permittee must submit a TPPC as part of any application for a new WPCP or modification of an existing permit. A TPPC was submitted as part of the SPLO WPCP NEV0070005 renewal application in 2016. A FPPC must be submitted to the agency at least two years prior to the anticipated closure of the mine site, or any component (source) thereof. This plan must provide closure goals and a detailed methodology of activities necessary to achieve chemical stabilization of all known and potential contaminants at the site or component, as applicable. The FPPC must include a detailed description of proposed monitoring that will be conducted to demonstrate how the closure goals will be met.

Under State of Nevada Reclamation Permit #0092, total permitted disturbance at the SPLO, as of 2017, totaled 7,390 acres, of which, only 18% is on public lands administered by the BLM; the remaining 82% is on private land and subject to state mine reclamation regulations (NAC 519A). In general, the reclamation and closure of the SPLO, upon cessation of brine pumping, will involve the removal of all pumps and abandonment of the wells in accordance with state regulations. While no additional brines will be added to the evaporation pond system, brine management would continue unchanged for at least one year while the ponds evapoconcentrate and are systematically shut down. As each pond is abandoned, all equipment associated with its operation will be removed. It will then require another year to year and a half to process all of the remaining limed brine through the lithium carbonate plant. Once processing has been halted, all surface structures will be removed, including buildings, pipelines, equipment, and power lines. The solar pond embankments will not be removed; neither the ponds, nor the salt spoils are expected to pose a hazard to public safety. The


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embankments surrounding these ponds will be graded at 3:1 slopes as described in the reclamation plan. Final reclamation of the LS Pond is described in Section 16.2.2. The PCS disposal site will be reclaimed according to the PCS Management Plan.

To the extent practicable, reclamation and closure activities would be conducted concurrently to reduce the overall reclamation and closure costs, minimize environmental liabilities, and limit financial assurance exposure. The revegetation release criteria for reclaimed areas are presented in the Guidelines for Successful Revegetation for the Nevada Division of Environmental Protection, the Bureau of Land Management, and the U.S.D.A. Forest Service (NDEP, 2016). The revegetation goal is to achieve the plant cover similar to adjacent lands as soon as possible, which, on a denuded salt playa, is relatively simple.

17.4.2Closure Cost Estimate

Albemarle/Silver Peak does not maintain a current internal LOM cost estimate to track the closure cost to self-perform a closure. The most recent closure cost estimate available for review was the 2020 reclamation bond cost update prepared by Haley & Aldrich. This three-year reclamation cost update for financial assurance primarily involved importing previous data from an earlier build of the SRCE into version 17b. The SRCE model has been in use since 2006 in the State of Nevada after validation by both state and federal regulators and mining industry representatives.

SRK reviewed the 2017 Plan of Operations and the 2017 and 2020 reclamation cost estimates provided by Albemarle. The documents meet the requirements of Nevada Revised Statutes (NRS) 519A and NAC 519A, as well as meeting requirements in 43 CFR§ 3809. An acceptance letter for the 2020 update to the associated cost estimate has also been provided and found to meet the requirements for financial assurance. As noted above, the 2020 update to the reclamation bond cost is $8,164,980.

The 2020 update utilized a Cost Data File (CDF) prepared by the NDEP-BMRR, which was released on August 1st, 2020. The CDF utilizes the unit rates below:

•Labor rates from federally mandated Davis-Bacon rates

•Rental equipment rates quoted from Cashman Caterpillar in Reno, Nevada

•Miscellaneous unit rates from Nevada mining vendor quotes (e.g., seeding, well abandonment, etc.)

•Costs for some activities and supplies are from the 2019 RS Means Heavy Construction database (where activities include labor, they are modified to use the Davis Bacon wages)

A cost basis was selected for Southern Nevada, which includes Clark, Esmeralda, Lincoln, and Nye counties. The SRCE model utilizes first principles to calculate various costs for activities related to mining operations, inputs for these equations range from: equipment efficiencies, labor efficiencies, fuel consumption rates, area calculations, unit rates for labor/equipment/consumables, etc. Some costs estimated in the SRCE model, such as those for demolition are estimated based on the RS Means Heavy Construction database. Other, site-specific costs may be calculated by the operator and included in one of the User Sheets.


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The rates for the CDF are supplied by the NDEP-BMRR and vetted for usage in reclamation estimates throughout the State of Nevada, as well as several surrounding jurisdictions. Davis-Bacon labor rates are based on government contracts with select labor unions and may be higher than those that would be incurred by an operator in a self-perform closure scenario where in-house or non-union contract labor can be used. The costs within a reclamation estimate prepared for a regulatory agency often have additional overhead costs related to government oversight of the closure project. The same is true of the values associated with equipment. The rates within the government prepared CDF are leased rates (which include capital and operating costs), as opposed to an owner/operator fleet already having a majority of the equipment on hand and partially or fully amortized, or potentially easier access to equipment. The reclamation bond cost estimate includes 10% for contractor overhead and profit, 6% for engineering and design, 6% for contingency, 10% for government project management and 4% for bonding and insurance. The total indirect markup of the reclamation bond estimate is 35%. While this total markup is likely sufficient to cover the project management and overhead (general and administrative) costs in a self-perform closure, they are not detailed enough to make a judgement whether they are adequate in this case. Normally, a self-perform LOM closure cost will include a project specific list of general and administrative costs for both management and overhead items like phones, office supplies, electricity, etc.

The 2020 cost estimate prepared by Haley & Aldrich utilizes various sheets within the SRCE. These sheets include: Cost Summary, Other User, Waste Rock Dumps, Roads, Quarries and Borrow Pits, Haul Material, Foundations and Buildings, Landfills, Yards, etc., Waste Disposal, Well Abandonment, Misc. Costs, Monitoring, Construction Management, and various User Sheets (User 1 [calculations for equipment removal], User 2 [2019 mobilization/demobilization calculation spreadsheet], User 3 [quote from SANROC INC to remove powerlines and poles]).

User 1 sheet includes various calculations to remove equipment (transfer pumps, lime slaking plant equipment, and power poles); these calculations utilize equipment, material, and labor rates from within the SRCE model (i.e., they mobilization/demobilization calculation spreadsheet], User 3 [quote from SANROC INC to remove powerlines and poles]). All of the sheets that contain added data appear to be done in a manner that is representative of good industry practice. SRK was provided copies the worksheets in PDF format rather than in native Excel format so we could not review any custom formulas and links created by Albemarle/Silver Peak or their consultants within worksheets in the model.

SRK did not attempt to recreate the closure cost estimate by reproducing the inputs that were derived from computer aided drafting (CAD) or geographic information system (GIS) models. When implemented in an acceptable manner, this information should be accurate and lead to a cost estimate model that is also a relatively accurate facsimile of the financial liability associated with the operation. There are many nuances in how to approach the desired inputs for the SRCE model, as well as the desired outcome, and no two modelers or models are identical. However, given the acceptance by the federal and state regulators of the previous versions of the reclamation cost estimate, and the regulators familiarity with the SRCE model, it appears that the reclamation estimate executed with respect to the Silver Peak operation is within the margins of good industry practice and showcases a reasonable cost to reclaim the operation and its associated features.


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Note: The current permitting activities (Section 17.3.2) will require modification of the recently approved reclamation cost estimate at a time specified by the BLM during the process. At a minimum, additional costs associated with the expanded and new evaporation ponds and lime addition system will need to be captured. However, according to Albemarle, some of these costs will be offset by the current and ongoing closure of a number of extraction wells that are currently carried in the SRCE model; thus, a material change in the reclamation cost estimate is not anticipated. However, SRK was unable to assess these changes at this time.

17.4.3Limitations on the Closure Cost Estimate

The purpose for which the cost estimate provided for review was created was to provide a basis for financial assurance. This type of estimate reflects the cost that the government agency responsible for closing the site in the event that an operator fails to meet their obligation would incur. If Albemarle, rather than the government, closes the site in accordance with their current mine plan and approved closure plan, the cost of closure is likely to be different from the financial assurance cost estimate approved by the government. There are a number of costs that are included in the financial assurance estimate that would only be incurred by the government, such as government contract administration. Other costs, such as head office costs, a number of human resource costs, taxes, fees, and other operator-specific costs that are not included in the financial assurance cost estimate would likely be incurred by Albemarle during closure of the site. Because Albemarle does not currently have an internal closure cost estimate, SRK was not able to prepare a comparison of the two types of closure cost estimates. The actual cost could be greater or less than the financial assurance estimate.

Furthermore, because closure of the site is not expected until 2053, based on the forecast reserve production plan, the closure cost estimate represents future costs based on current expectations of site conditions at that date. In all probability, site conditions at closure will be different that currently expected and, therefore, the current estimate of closure costs is unlikely to reflect the actual closure cost that will be incurred in the future.

17.5Plan Adequacy

Given the robust regulatory requirements in Nevada, and review of the available documentation, it is SRK’s opinion that the current plans are sufficiently adequate to address any issues related to environmental compliance, permitting, and local individuals or groups.

17.6Local Procurement

No formal commitments were identified by the SPLO for local procurement.


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18Capital and Operating Costs

18.1Capital and Operating Cost Estimates

Estimation of capital and operating costs is inherently a forward-looking exercise. These estimates rely upon a range of assumptions and forecasts that are subject to change depending upon macroeconomic conditions, operating strategy and new data collected through future operations. For this report, capital and operating costs are estimated to a PFS-level, as defined by S-K 1300, with a targeted accuracy of +/-25%. However, this accuracy level is only applicable to the base case operating scenario and forward-looking assumptions outlined in this report. Therefore, changes in these forward-looking assumptions can result in capital and operating costs that deviate more than 25% from the costs forecast herein.

18.2Capital Cost Estimates

Capital cost forecasts are estimated based on (i) a baseline level of sustaining capital expenditures, in-line with historic expenditure levels, and (ii) strategic planning for major capital expenditures. Table 18.1 presents historical capital expenditures for reference (2015 to 2020) and estimated capital for 2021.

Table 18.1: Silver Peak Capital Expenditure (Nominal US$M for 2015-2019, Real 2020 US$M for 2020/2021)


Trailing Five Year Capital by Expenditure Type, Actual							Capital Forecast by Expenditure Type, Estimate
	2015	2016	2017	2018	2019	2020	2021
Well Drilling/Rehab	1.53	0.90	4.04	8.37	5.09	10.65	11.95
Expansion/Ops Improvement	0.14	0.08	0.24	3.18	1.27	6.87	7.73
Anhydrous Hydroxide	0.01	0.00	0.09	0.19	0.03	-	-
Other Sustaining	1.27	1.80	4.64	6.68	5.71	2.25	1.52
Total Capital Expenditure	2.94	2.78	9.01	18.41	12.11	19.78	21.20

Source: Albemarle Cost Reporting. 2021

In reviewing these costs, elevated lithium prices in 2017 to 2019 supported increased expenditure at the operation. Some of this expenditure (including non-specific ‘Other Sustaining”) was likely to catch up on historic under-spend from years with more depressed pricing. However, in SRK’s opinion, the 2017 to 2019 non-specific expenditure is not likely reflective of typical long-term expenditure levels with 2015/2016/2020/2021 presenting better benchmarks.

For the purpose of forecasting capital to support the reserve estimate, SRK did not include expenditure for operational improvement as no improvement is assumed in operating performance relative to historic. Further, as the anhydrous hydroxide plant does not utilize feed material from the


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Silver Peak resource/reserve and economics associated with this plant are not included in the economic evaluation of the reserve, capital associated with this portion of the plant is excluded. Therefore, SRK’s capital forecast includes a direct estimate of replacement/rehabilitation of production wells and a single line item to capture all other miscellaneous sustaining capital.

For the estimate of replacement/rehabilitation of production wells, SRK assumes three wells per year will require replacement with a typical cost of US$750,000 per well. As replacement wells, these wells do not require supporting piping or electrical infrastructure. Actual well costs vary depending upon depth, but based on historic expenditure, US$750,000 presents a reasonable estimate for a typical well and the rate of three wells per year is consistent with historic averages. Notably, this average three wells per year rate is based on the current wellfield of 46 production wells. SRK’s production assumptions include increasing production rates to maximize permit and infrastructure capacity. This results in a production well field of 73 wells by the end of 2022 and further increasing over time to 86 wells in 2050. With increasing wellfield size, the well replacement rate was also increased based on factoring off the current ratio of three wells per year out of 46.

For a typical annual sustaining capital meant as a catch-all for all other items, SRK estimates an average value of US$2.5 million per year. This is higher than the estimates for 2021, 2020, 2016 and 2015 but is less than the estimates for 2016 and 2017. As noted above, in SRK’s opinion the expenditure in 2017, 2018 and 2019 was relatively inflated whereas the 2015 and 2016 expenditure were likely lower than sustainable. 2020 and 2021 as estimates are focused on items that are known required spend but are not likely adequate to capture spend associated with equipment failure/repair incurred during the year. Therefore, in SRK’s opinion, at US$2.5 million per year, the assumption is a reasonable balance given the historic data.

All the capital expenditure discussed above is most appropriately classified as sustaining existing production levels. However, as noted above, SRK’s reserve assumptions include increasing production rates. To allow for these higher production rates, Silver Peak will need to increase the total production well count as well as remove salt buildup from evaporation ponds that are not currently in use.

For the expanded wellfield, SRK’s production modelling requires at least 79 total production wells (i.e., 33 additional wells). During this period, an additional four low producing wells are replaced with completely new wells in SRK’s assumptions. For capital forecasts, SRK assumed the same US$750,000 per well cost plus an additional US$250,000 per well to piping and electrical infrastructure to tie the new wells into the existing infrastructure. This results in a total capital expenditure for new wells of US$42 million in the initial expansion period, which is incurred between 2021 and 2023. Beyond 2023, an additional US$127 million is required over the remaining production period to sustain production levels (i.e., these are additional new wells moved from existing locations due to low productivity as well as additional wells required as some of the replacement wells invariably produce less than the original wells requiring additional wells to make up for these lower production rates.)

Although Albemarle has not settled on rehabilitation of Ponds 12 North and South as the confirmed go-forward option for expanding evaporation capacity on-site, from a capital cost perspective, this option is likely the highest cost, it’s used to support the reserve is likely fully encompassing of other options that may be implemented. For the salt removal, two existing ponds (12 North and 12 South) will require removal of approximately 10 ft of salt that built up through historic operations. These


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ponds total 684 acres, combined. Albemarle has assumed a cost of US$2.10/cubic yard, including haulage which results in capital expenditure of approximately US$25.5 million or US$29.3 million when including 15% contingency (Table 18.2). SRK checked these assumptions against historic salt harvesting costs and including the contingency, the cost per cubic yard is consistent with prior results. This capital is forecast for expenditure between 2022 and 2023.

Table 18.2: Pond 12S and 12N Salt Harvest Expenditure Forecast


	Value	Unit
Area	684	Acres
Average Depth	10	ft
Volume	11,035,189	Cu. Yds.
Unit Harvest Cost	$2.10	$/cy
Harvest Cost	$23,174	$’000s
Unit Haulage Cost	$0.21	$’000/cy
Haulage Cost	$2,317
Subtotal	$25,491	$’000s
Contingency (15%)	$3,824	$’000s
Total	$29,315	$’000s

Source: SRK

The final remaining material capital investment item required to support the forecast 20,000 acre-feet per annum wellfield pumping rate is the expansion of liming capacity in the evaporation ponds. Albemarle currently forecasts the capital requirement for this project at US$7.1 million expended over the next four years.

Table 18.3 presents capital estimates for the next 10 years and the life of the reserve and incorporated into the cashflow model. Total capital costs over this period (July 2021 to December 2053) are estimated at US$298.1 million in 2020 real dollars.

Table 18.3: Capital Cost Forecast ($M Real 2020)


Period	Total Sustaining Capex	Wellfield Expansion Projects	Capital Expenditure (US$M Real 2020)
2021	12.65	7.00	5.65
2022	52.21	22.00	30.21
2023	25.66	8.00	17.66
2024	12.38	-	12.38
2025	10.25	-	10.25
2026	7.25	-	7.25
2027	6.25	-	6.25
2028	10.00	-	10.00
2029	7.00	-	7.00
2030	7.00	-	7.00
Remaining LoM (2031 – 2053)	147.41	-	147.41

Note: 2021 capex is July – December only

Source: SRK, 2021

18.3Operating Cost Estimates

Six years’ trailing and forecast 2021 cash operating costs are presented in Table 18.4. Operating costs are site specific (e.g., they do not include corporate overheads although there is an allocation


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for corporate engineering costs). Note that for internal reporting purposes, Albemarle allocates brine production costs to the year the brine is processed (i.e., an approximate 24-month delay from the actual cost being incurred). The costs shown in Table 18.4 reflect the costs at the time incurred so reflect different results than Albemarle’s accounting.

Table 18.4: Operating Costs ($M, Nominal for 2015-19, Real 2020 for 2020/2021)


	2015 Act	2016 Act	2017 Act	2018 Act	2019 Act	2020 F10	2021F
Utilities	1.06	0.82	0.85	0.98	0.98	0.91	1.02
Salaries and Benefits	7.32	7.16	6.91	6.92	6.74	6.17	6.94
Soda Ash	4.09	3.03	2.79	3.96	2.33	2.61	3.99
Packaging	0.20	0.18	0.22	0.29	0.16	0.17	0.26
Other	6.58	6.42	8.62	8.68	8.76	6.89	7.11
Total	19.23	17.62	19.38	20.83	18.97	16.75	19.33
Annual Production (metric tonnes lithium carbonate)	5,410	3,849	4,471	6,565	3,586	3,920	6,000
Unit Cash Cost ($/metric tonne lithium carbonate)	3,555	4,576	4,335	3,173	5,289	4,273	3,221

Costs included are cash costs only (e.g., depreciation and depletion not included)

Major costs within the “Other” category include propane, lime, salt harvesting, maintenance, and administrative costs

Costs associated with anhydrous hydroxide production are not broken out separately and therefore SRK subtracted a typical $250,000 per year based on Albemarle guidance

Typical reimbursement for corporate engineering support of $150,000 added (not individually broken out in cost reporting)

Source: Albemarle Cost Reporting

As noted above, Albemarle has not developed long term cost forecasts. Therefore, SRK developed a cost model to reflect future production costs. Of note, SRK’s forecast production profile includes an increase in wellfield pumping rates and production rates, therefore, the cost forecast necessarily accounts for these changing conditions.

In evaluating the historic costs and discussing the cost profile with Albemarle, the majority of the Silver Peak costs are fixed and will not change with increasing pumping and production rates. However, there are a few material cost items that are variable and therefore need to be adjusted. For the purposes of this reserve estimate, SRK developed a variable cost model for the following items:

•Packaging

•Propane

•Soda Ash

•Lime

•Electricity

•Salt Removal

For packaging, propane, soda ash and lime, the costs are treated as fully variable to the current year’s lithium carbonate production. For Salt Removal, the cost is calculated based on a factor against the contained salt in the brine pumped two years prior (reflects timing to evaporate brine before salt is harvested). For electricity, based on a comparison of historic electricity usage versus production and pumping rates, it appears likely that the majority of electrical consumption is fixed. SRK also found better correlation between electricity usage and brine pumping rates than lithium carbonate production. Therefore, the consumption of electricity is treated as approximately 70% fixed with the remaining variable to brine pumping rates. Overall, at historic production rates, these


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variable costs comprise approximately one third of the total cost structure for Silver Peak, although as production rates increase, the proportion of variable costs increases.

Some of the cost inputs can have volatile pricing which can have a material impact on operating costs. SRK utilized Albemarle’s 2021 budgetary actuals and forecasts for these items to represent LoM inputs. SRK checked the 2021 budgetary forecasts against historic actuals, and they are reasonable in SRK’s opinion. These key inputs are listed below. Note, that in the economic model, SRK ran a sensitivity analysis on soda ash pricing as it is the most important of these inputs. See Section 19.3 for more detail.

•Soda Ash: $226/metric tonne, delivered

•Lime: $220/metric tonne, delivered

•Electricity: 0.067/kW-hr

•Propane: $1.00/gallon, delivered

For calibration purposes, SRK modeled historic and 2020/2021 costs using the cost model developed to check against actuals. Notably, for the purposes of this calibration check, SRK reduced the salt harvesting expenditure assumptions to better reflect historic practices at Silver Peak (see discussion below). These results are presented in Table 18.5.

Table 18.5: Operating Cost Model Calibration Results ($M, Real 2020)


	2015	2016	2017	2018	2019	2020	2021
Utilities (total)	0.95	0.95	0.93	0.95	0.96	1.03	1.06
Non-Electricity	0.05	0.05	0.05	0.05	0.05	0.00	0.00
Electricity Fixed	0.67	0.67	0.67	0.67	0.67	0.67	0.67
Electricity Variable	0.23	0.23	0.21	0.23	0.24	0.36	0.39
Fixed Plant	12.70	12.70	12.70	12.70	12.70	12.70	12.70
Variable Plant	-	-	-	-	-	-	-
Soda Ash	3.60	2.56	2.97	4.37	2.38	2.61	3.99
Lime	1.55	1.10	1.28	1.88	1.03	1.12	1.72
Propane	0.81	0.58	0.67	0.98	0.54	0.59	0.90
Packaging	0.24	0.17	0.20	0.30	0.16	0.18	0.27
Salt Removal	0.68	0.69	0.64	0.67	0.70	1.07	1.16
Total	20.53	18.76	19.39	21.84	18.47	19.30	21.79
Difference to Actual Costs and Albemarle Forecasts	7%	6%	0%	5%	-3%	15%	13%

Source: SRK

Note Salt removal costs shown in this table reflect historic harvest rates for calibration purposes and do not reflect costs forecast by SRK.

As seen in this table, on average, SRK’s model overpredicts costs by around 5% within a range of minus 3% to plus 10%. The most notable outliers are 2015/2016 and 2020/2021. In SRK’s opinion, as the costs are meant to reflect a real 2021 estimate, it is not surprising the longer dated historic costs are overpredicted when compared to the nominal results from those years given the inflation over this period. For 2020, the operation was subject to a partial shutdown for a portion of the year which almost certainly skewed the actual costs lower than the model. For 2021, the most significant difference in costs appears to be on the fixed plant costs, which are overestimated by more than two million dollars, when compared to Albemarle’s forecast. It is likely that Albemarle is forecasting some level of cost improvement for 2021. While it is reasonable that Albemarle will achieve cost reduction, in SRK’s opinion, for the purpose of this exercise to estimate reserves, basing the costs on the


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established historic results is reasonable and in future years the model can be adjusted as Albemarle demonstrates effective cost reductions.

For salt harvesting, Albemarle has not historically harvested all salt that is deposited each year. This has resulted in some ponds no longer being usable for evaporation purposes as they are full of salt. As noted in the capital section above, for example, Ponds 12S and 12N are estimated to contain around 11 million cubic yards of precipitated salt that must be removed to allow usage of these ponds again. As noted in Section 12, SRK’s brine production schedule maximizes the usage of current infrastructure (e.g., ponds) and water rights. To sustain these production rates, excess salt cannot be allowed to accumulate over time. Therefore, instead of utilizing historic salt harvesting rates, SRK has calculated salt harvesting requirements as a factor of salt contained in the brine pumped (with harvesting delayed two years from the time brine is pumped). This results in annual average salt harvesting costs of approximately $4.1 million, in comparison to historic costs that have averaged around $800,000 per year. Part of this significant jump is due to higher pumping rates for brine, but even at historic pumping rates, SRK’s salt harvesting cost would be approximately $3 million per year.

Total annual forecast operating costs for Silver Peak are shown in Figure 18-1.

Note 2021 costs reflect a partial year (July – December)

Source: SRK

Figure 18-1: Total Forecast Operating Expenditure (The tabular data can be located in Table 19-7.)


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19Economic Analysis

19.1General Description

SRK prepared a cash flow model to evaluate Silver Peak’s reserves on a real, 2021-dollar basis. This model was prepared on an annual basis from the reserve effective date to the exhaustion of the reserves. This section presents the main assumptions used in the cash flow model and the resulting indicative economics. The model results are presented in US$, unless otherwise stated.

All results are presented in this section on a 100% basis, reflective of Albemarle’s ownership.

19.1.1Basic Model Parameters

Key criteria used in the analysis are presented throughout this section. Basic model parameters are summarized in Table 19.1.

Table 19.1: Basic Model Parameters


Description			Value
TEM Time Zero Start Date			July 1, 2021
Pumping Life (first year is a partial year)			30
Operational Life (first year is a partial year)			32
Model Life (first year is a partial year)			33
Discount Rate			8%

Source: SRK, Albemarle, 2021

The operational life extends two years beyond the pumping life to allow for recovery of the lithium pumped to the ponds from the wellfield.

The model continues one year beyond the operational life to incorporate closure costs in the cashflow analysis.

The selected discount rate is 8% as provided by Albemarle.


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19.1.2External Factors

Pricing

Modeled prices are based on the prices developed in the Market Study section of this report. The prices are modeled as US$10,000/t technical grade Li2CO3 over the life of the operation. This price is a CIF price and shipping costs are applied separately within the model.

Taxes and Royalties

As modeled, the operation is subject to a 21% federal income tax rate. All expended capital is subject to depreciation over an eight-year period. Depreciation occurs via straight line method. Taxable income is adjusted by depletion on a US$644 per tonne LCE basis provided by Albemarle.

As the operation is located in Nevada, it is not subject to a state level income tax but is subject to the Nevada Net Profits Interest tax.

This tax is on a sliding scale and is levied over the operation’s gross revenue fewer operating costs and depreciation expenses. As the operation is modeled to have a ratio of net proceeds to gross proceeds greater than 50% at the forecast price, the tax rate is modeled as 5%.

Working Capital

The assumptions used for working capital in this analysis are as follows:

•Accounts Receivable (A/R): 30-day delay

•Accounts Payable (A/P): 30-day delay

•Zero opening balance for A/R and A/P

19.1.3Technical Factors

Pumping/Extraction Profile

The modeled pumping profile was developed by SRK. The details of this profile are presented previously in this report. No modifications were made to the profile for use in the economic model other than adjustments where necessary to account for already pumped solution in the first year. The modeled profile is presented in Figure 19-1.

Source: SRK, 2021

Figure 19-1: Silver Peak Pumping Profile (Tabular data in Table 19-7)

A summary of the modeled life of operation pumping profile is presented in Table 19.2.


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Table 19.2: Modeled Life of Operation Pumping Profile


Extraction Summary (incl. full year 2021)	Units	Value
Total Brine Pumped	tonnes	729,505,457
Total Contained Lithium	tonnes	61,039
Average Lithium Grade	mg/l	83.67
Annual Average Brine Production	m3	24,316,849
Annual Average Brine Production	Acre Feet	19,714

Source: SRK, 2021

Processing Profile

The processing profile is identical to the pumping profile. The material pumped is immediately fed to the processing circuit consisting of evaporation ponds and processing plant.

The production profile is the result of the application of processing logic to the processing profile within the economic model. The following recovery curve was applied to raw brine pumping profile to account for losses in the evaporation ponds:

+0.4609

An additional 85% fixed lithium recovery is applied to account for losses in the lithium carbonate plant.

Source: SRK, 2021

Figure 19-2: Modeled Processing Profile (Tabular data in Table 19-7)


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Source: SRK, 2021

Figure 19-3: Modeled Production Profile (Tabular data in Table 19-7)

A summary of the modeled life of operation processing profile is presented in Table 19.3.

Table 19.3: Life of Operation Processing Summary


LoM Processing (incl. full year 2021)	Units	Value
Lithium Processed	tonnes	61,039
Combined Lithium Recovery	%	44.36%
Li2CO3 Produced (Partial year 2021)	tonnes	144,095
Annual Average Li2CO3 Produced (Partial year 2021)	tonnes	4,503

Source: SRK, 2021

Operating Costs

Operating costs are modeled in US$ and are categorized as utilities, processing, and shipping costs. No contingency amounts have been added to the operating costs within the model. A summary of the operating costs over the life of the operation is presented in Table 19.4 and Figure 19-4.

Table 19.4: Operating Cost Summary


LoM Operating Costs	Units	Value
Utilities	USD	36,016,507
Processing Costs	USD	665,625,568
Shipping Costs	USD	18,011,865
Total Operating Costs	USD	719,653,939
Utilities	USD/t Li2CO3	250
Processing Costs	USD/t Li2CO3	4,619
Shipping Costs	USD/t Li2CO3	125
LOM C1 Cost	USD/t Li2CO3	4,994

Source: SRK, 2021


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Source: SRK, 2021

Figure 19-4: Life of Operation Operating Cost Summary (Tabular data is presented in Table 19-7)

The contributions of the different operating cost segments over the life of the operation are presented in Figure 19-5.

Source: SRK, 2021

Figure 19-5: Life of Operation Operating Cost Contributions

Utilities

The utilities costs in the model consist of fixed and variable electricity and other costs. The non-electricity cost is captured at US$50,000/a and the fixed electrical cost is captured at US$670,000/a. The variable electric costs are assessed at a rate of US$0.067/kWh with an estimated consumption of 0.28 kWh/m3 of brine.


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Processing

Processing costs are composed of fixed and variable components. The fixed component is modeled a US$12.7M/a. The variable components are modeled as outlined in Table 19.5.

Table 19.5: Variable Processing Costs


Processing Costs	Units	Value
Soda Ash Consumption	t/t Li2CO3	2.50
Soda Ash Pricing	USD/tonne	226.00
Lime Consumption	t/t Li2CO3	1.30
Lime Pricing	USD/tonne	220.00
Propane Consumption	gal/t Li2CO3	150
Propane Pricing	USD/gal	1.00
Salt Removal	USD/tonne	2.20

Source: SRK, 2021

Shipping

Shipping costs are captured as variable costs and composed of two cost areas, packaging, and shipping.

Packaging costs are assessed at a rate of US$45/t Li2CO3 and shipping costs are assessed at a rate of US$80/t Li2CO3.

Capital Costs

As Silver Peak is an existing operation, no initial capital has been modeled. Sustaining capital is modeled on an annual basis and is used in the model as developed in previous sections. No contingency amounts have been added to the sustaining capital within the model. Closure costs are modeled as sustaining capital and are captured as a onetime payment the year following cessation of operations. The modeled sustaining capital profile is presented in the figure below.

Source: SRK, 2021

Figure 19-6: Silver Peak Sustaining Capital Profile (Tabular data is presented in Table 19-7)

19.2Results

The economic analysis metrics are prepared on annual after-tax basis in US$. The results of the analysis are presented in the table below. As modeled, at a Lithium Carbonate price of US$10,000/t, the NPV8% of the forecast after-tax free cash flow is US$60million. Note that because Silver Peak is in operation and is modeled on a go-forward basis from the date of the reserve, historic capital


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expenditures are treated as sunk costs (i.e., not modeled) and therefore, IRR and payback period analysis are not relevant metrics.

Table 19.6: Indicative Economic Results


LoM Cash Flow (Unfinanced)	Units	Value
Total Revenue	USD	1,440,949,180
Total Opex	USD	(719,653,939)
Operating Margin	USD	721,295,241
Operating Margin Ratio	%	50%
Taxes Paid	USD	(126,596,288)
Free Cashflow	USD	302,513,973
Before Tax
Free Cash Flow	USD	429,110,261
NPV @ 8%	USD	101,583,201
NPV @ 10%	USD	72,891,749
NPV @ 15%	USD	30,977,352
After Tax
Free Cash Flow	USD	302,513,973
NPV @ 8%	USD	59,656,066
NPV @ 10%	USD	38,530,185
NPV @ 15%	USD	7,962,954

Source: SRK, 2021

The economic results are presented on an annual basis in the Figure 19-7.


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Table 19-7: Silver Peak Annual Cashflow and Key Project Data

Source: SRK, 2021


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Source: SRK, 2021

Figure 19-7: Annual Cashflow Summary (Tabular data in Table 19-7)

19.3Sensitivity Analysis

SRK cautions that this sensitivity analysis is for comparative purposes only to show the relative importance of key model input assumptions. The 10% flex is not intended to reflect actual uncertainty for these inputs but instead is maintained as a constant value to maintain comparability. These parameters were flexed in isolation within the model and are assumed to be uncorrelated with one another which may not be reflective of reality. Additionally, the amount of flex in the selected parameters may violate physical or environmental constraints present at the operation.

Source: SRK, 2021

Figure 19-8: Silver Peak NPV Sensitivity Analysis


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20Adjacent Properties

20.1Pure Energy Minerals

The Pure Energy Minerals (PEM) Project is located in central Esmeralda County, Nevada – neighboring the SPLO.

Extracted from PEM March 2018 NI 43-101 Preliminary Economic Assessment Report:

The property consists of 1,085 lithium placer claims located in Clayton Valley. The placer claims are comprised of blocks to the south and north of Albemarle Corporation’s existing lithium-brine operation. In their entirety, the claims controlled by PEM occupy approximately 106 km2 (10,600 ha or 26,300 ac). All 1,085 claims are located on unencumbered public land managed by the federal Bureau of Land Management (BLM), and shown in Figure 20-1.


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Source: Pure Energy Minerals, 2018

Figure 20-1: Map of Claims Controlled by Pure Energy Minerals

In addition, SRK notes that there are other exploration companies also hold claims in Clayton Valley.


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21Other Relevant Data and Information

No additional data is included in Section 21 as the relevant information is provided in the body of the report.


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22Interpretation and Conclusions

22.1Geology and Mineral Resources

Geology and lithium on brine distribution are well understood through decades of active mining, and SRK has used relevant available data sources to integrate into the modeling effort at the scale of a long-term resource for public reporting, as of the effective date of the sampling. The mineral resource estimation could be improved with additional infill program (drilling and brine sampling).

Lithium concentration data from the brine sampling exploration data set was regularized to equal lengths for constant sample volume (Compositing). Lithium grades were interpolated into a block model using ordinary kriging methods. Results were validated visually, and via various statistical comparisons. The estimate was depleted for current production, categorized in a manner consistent with industry standards, and statistical parameters. Mineral resources have been reported using a revisited pumping plan, based on economic and mining assumptions to support the reasonable potential for eventual economic extraction of the resource. A cut-off grade has been derived from these economic parameters, and the resource has been reported above this cut-off. The mineral resource exclusive of reserves will continue to evolve as the reserves are depleted, and over time the effective date of the remaining resource will make its comparison to the reserve less reasonable. It is expected that the resource will need to be updated as these deviations become material.

22.2Reserves and Mine Plan

22.3Metallurgy and Mineral Processing


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The nameplate capacity of the Lithium carbonate plant is listed as 6,000 t/a Li2CO3. However, in recent years Silver Peak has demonstrated that the plant is capable of producing higher than that. In 2018 the plant produced ~6,500 tonnes Li2CO3.

SRK’s reserve estimate includes the assumption that Albemarle will increase the pumping rate from the Silver Peak wellfield to 20,000 afpy. To support this increased pumping rate, the facility will require expansion of evaporation pond capacity and liming operations. Albemarle is currently performing work to select the optimal approach to this expansion.

SRK recommends assessing the feasibility of lining additional evaporation ponds in order to evaluate an increase in recovery within the pond system which could help improve overall production levels.

22.4Infrastructure

Silver Peak is a mature operating lithium brine mining and concentrating project that produces lithium carbonate and to a lesser degree, lithium hydroxide. Access to the site is well established and functional. Local communities are available to provide supplies, services, and housing for employees at the project. Albemarle provides some employee housing in Silver Peak. The site covers approximately 15,000 acres includes large evaporation ponds, brine wells, salt storage facilities, administrative offices and change house, laboratory, processing facility, propane and diesel storage tanks, water supply and storage, utility supplied power transmission lines feed power substations and distribution system, liming facility, boiler and heating system, packaging and warehousing facility, miscellaneous shops and general laydown yard. All infrastructure needed for ongoing operations is in place and functioning.

22.5Environmental, Permitting, Social and Closure

While the SPLO predates all state and federal environmental statutes and regulations, the operation follows all currently required permits and authorizations. Environmental management and monitoring are an integral part of the operations and is completed on several levels across a number of permits. There are currently no known environmental issues that could materially impact Albemarle’s ability to extract SPLO resources or reserves.

Closure

Although Silver Peak has a closure plan prepared in accordance with applicable regulations, this plan should be reviewed and modified, as necessary, to ensure inclusion of all closure activities and costs SPLO to properly close all of the project facilities. This update should be prepared in accordance with applicable regulatory requirements and commitments included in the approved closure plan, but also include any activities that would be specific to an owner-implemented closure project. It should also be prepared in sufficient detail that a proper PFS-level closure cost estimate can be prepared.

Because Albemarle/Silver does not have an internal closure cost estimate, SRK was only able to review the financial assurance cost estimate prepared in accordance with applicable regulations. If Albemarle, rather than the government, closes the site in accordance with their current mine plan and approved closure plan, the cost of closure is likely to be different from the financial assurance cost estimate approved by the government. There are a number of costs that are included in the financial assurance estimate that would only be incurred by the government, such as government


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contract administration. Other costs, such as head office costs, a number of human resource costs, taxes, fees, and other operator-specific costs that are not included in the financial assurance cost estimate would likely be incurred by Albemarle during closure of the site. Without an internal closure cost estimate with sufficient detail to compare with the financial assurance cost estimate, SRK cannot provide a comparison between the two types of cost estimates.

Furthermore, because the site will continue to operate for approximately 30 more years, the closure cost estimate represents future costs based on current expectations of site conditions at that date. In all probability, site conditions at closure will be different that currently expected and, therefore, the current estimate of closure costs is unlikely to reflect the actual closure cost that will be incurred in the future.

22.6Economics

The Silver Peak operation as modeled for the purposes of this report is forecast to have a 32-year life with the first modeled year of operation being a partial year to align with the effective date of the reserves.

As modeled for this analysis, the operation is forecast to produce 4,503 tonnes of technical grade lithium carbonate, on average, per year over its life. At a price of US$10,000/t technical grade lithium carbonate, the NPV@8% of the modeled after-tax cash flow is US$60 million.

The operation is expected to generate positive cashflow during every full year in which it is pumping or processing brine on the schedule and at the costs and process outlined in this report except for 2022 and 2023 when there are significant capital expenditures scheduled. This supports the economic viability of the reserve under the assumptions evaluated.

An economic sensitivity analysis indicates that the operation’s NPV is most sensitive to variations in lithium carbonate price, lithium recovery and raw brine grade.


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23Recommendations

23.1Recommended Work Programs

SRK suggests the following for recommendations to further develop the project or understanding of the mineral resources.

•SRK recommends further optimizing the projected wellfield pumping plan. Through further optimization of well locations and depths as well as timing of stopping pumping from existing wells, SRK believes it is likely that the predicted brine concentration over the life of the operation can be increased.

•SRK recommends developing a program for measuring water levels in current and historical production wells. This program would outline a protocol for when a static, non-pumping water level would be measured following turning off the pump in active production wells. Historical production wells that are no longer actively pumping but have not been fully abandoned could also be used for monitoring groundwater levels. An improved understanding of the groundwater levels within the basin would allow for optimized well placement and improved production modeling for estimating aquifer pumpability into the future.

•SRK recommends implementing an infill drilling campaign in the aquifers within the inferred zones and deep areas mentioned above, focused on collecting lithium concentration data in LAS and LGA. The drilling campaign should include a sampling program for drainable porosity lab tests.

•SRK also recommends collecting drainable porosity samples when drilling any new wells. This would require drilling for core ahead of drilling the well.

•In order to evaluate an increase in recovery within the pond system, SRK recommends assessing the feasibility of lining some evaporation ponds.

•Leapfrog Model needs to be updated based on new geological information derived from the proposed drilling program.

•Numerical Groundwater Model needs to be updated and improved based on the new information derived from the proposed drilling program and monitoring data.

23.2Recommended Work Program Costs

Table 23.1: Summary of Costs for Recommended Work summarizes the costs for recommended work programs.


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Table 23.1: Summary of Costs for Recommended Work


Discipline	Program Description	Cost (US$)
Mineral Resource Estimates	Infilling Drilling Program to obtain brine and porosity samples over a 2-year period	3,000,000
Mineral Reserve Estimates	Update numerical groundwater model if additional drilling and sampling is completed	200,000
Water Level Monitoring	Establish water sampling program and evaluate additional monitoring wells	50,000
Mining Methods	Update Mine Plan with new information if drilling program implemented	50,000
Processing and Recovery Methods	Pond Lining Assessment	100,000
Infrastructure	No Work Programs are recommended as this is a stable operating project.	---
Environmental, Permitting, Social and Closure	Updated LS Pond solids residue (tailings) characterization (incl. TCLP testing)	10,000
Closure	Prepare detailed closure plan suitable to estimate internal closure costs at a PFS level. Prepare PFS level internal closure cost estimate	150,000
Total US$		$3,560,000

Source: SRK, 2021


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24References

Bureau of Land Management (BLM). 2010. Guidance for Permitting 3809 Plans of Operation. Instruction Memorandum NV IM-2011-004. United States Department of the Interior, Bureau of Land Management, Nevada State Office. November 5, 2010.

Burris, J.B., 2013. Structural and stratigraphic evolution of the Weepah Hills Area, NV - Transition from Basin and Range extension to Miocene core complex formation. M.S. thesis, University of Texas, Austin, 104 p.

Davis, J.R., Friedman, L., Gleason, J.D., 1986. Origin of lithium-rich brine, Clayton Valley, Nevada: U.S. Geological Survey Bulletin B1622, 131-138.

Davis, J.R. and Vine, J.D., 1979. Stratigraphic and Tectonic Setting of the Lithium Brine Field, Clayton Valley, Nevada. Rocky Mountain Association of Geologists – Basin and Range Symposium, p. 421-430.

Department of Energy (DOE). 2010. Final Environmental Assessment for Chemetall Foote Corporation Electric Drive Vehicle Battery and Component Manufacturing Initiative Kings Mountain, NC and Silver Peak, NV. Unites States Department of Energy, National Energy Technology Laboratory. DOE/EA-1715. September 2010.

EDM International, Inc. (EDM). 2013. Silver Peak Facility Avian Protection Plan. Submitted to Rockwood Lithium, Inc. December 2013.

Esmeralda County Commissioners. 2010. Esmeralda County, Nevada Master Plan. Available online at: www.accessesmeralda.com/Master_Plan.pdf.

Fetter, C.W., 1988. Applied Hydrogeology (2nd Edition), Merrill Publishing Co., Columbus, OH, 592 p.

Great Basin Bird Observatory (GBBO). 2010. Nevada comprehensive bird conservation plan, ver. 1.0. Great Basin Bird Observatory, Reno, NV. Available online at www.gbbo.org/bird_conservation_plan.html.

Groundwater Insight Inc. and Matrix Solutions Inc. 2016. Draft Hydrostratigraphy and Brine Models for the Rockwood Silver Peak Site.

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HydroGeoLogic, Inc., 2012, MODFLOW-SURFACT: version 4.0, HydroGeoLogic Inc., Herndon, Virginia, 2012.

Jennings, Melissa. 2010. Re-Analysis of Groundwater Supply Fresh Water Aquifer of Clayton Valley, Nevada. August 13, 2010. Presented in DOE, 2010.

Johnson, A.I., 1967. Specific Yield – Compilation of Specific Yield for Various Materials: U.S. Geological Survey Water-Supply Paper 1662-D.

Kunasz, I.A., 1970. Geology and chemistry of the lithium deposit in Clayton Valley, Esmeralda County, Nevada [Ph.D. dissertation]: Pennsylvania State University, 114p.


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Kunasz, I.A., 1974. Lithium occurrence in the brines of Clayton Valley, Esmeralda County, Nevada, Fourth Symposium on Salt; Northern Ohio Geological Survey, pp.5766.

Lindsay, R., 2011. Seismo-lineament analysis of selected earthquakes in the Tahoe-Truckee Area, California and Nevada: Waco, Texas, Baylor University Geology Department, , M.S. thesis, 147 p.

Meinzer, O.E., 1917. Geology and Water Resources of Big Smokey, Clayton, and Alkali Spring Valleys, Nevada: U.S. Geological Survey Water-Supply Paper 423.

Morris D.A. and Johnson, A.I., 1967. Summary of Hydrologic and Physical Properties of Rock and Soil Materials, as Analyzed by the Hydrologic Laboratory of the U.S. Geological Survey 1948-60: U.S. Geological Survey Water-Supply Paper 1839-D.

Nevada Division of Environmental Protection (NDEP). 2016. Attachment B: Nevada Guidelines for Successful Revegetation for the Nevada Division of Environmental Protection, the Bureau of Land Management and the United States Forest Service. Revised November 2016.

Nevada Division of Water Resources (NDWR). 2013. Nevada Statewide Assessment of Groundwater Pumpage Calendar Year 2013. State of Nevada, Department of Conservation and Natural Resources, Division of Water Resources, Jason King, P.E. State Engineer.

Nevada Division of Water Resources (NDWR). 2020. Hydrographic Area Summary – 143 Clayton Valley. Website: water.nv.gov accessed 10 October 2020.

Price, J.G., Lechler, P.J., Lear, M.B., and Giles, T.F., 2000. Possible volcanic source of lithium in brines in Clayton Valley, Nevada, in Cluer, J.K., Price, J. G., Struhsacker, E.M., Hardyman, R.F., and Morris, C.L., eds., Geology and Ore Deposits 2000: The Great Basin and Beyond: Geological Society of Nevada Symposium Proceedings, May 15-18, 2000, p.241-248.

Pure Energy Minerals, 2018. NI 43-101 Technical Report. Preliminary Economic Assessment (Rev. 1) of the Clayton Valley Lithium Project. Esmeralda County, Nevada.

Rockwood Lithium Inc. 2016. Water Pollution Control Permit Renewal Application, Rockwood Lithium, Inc., Esmeralda County, NV. An Albemarle Company Submitted to Bureau of Mining Regulation and Reclamation. November 2016.

Rockwood Lithium Inc. 2017. Silver Peak Project Plan of Operations. April 2017.

Rumbaugh, J.O., and Rumbaugh, D.B., 2011, Groundwater Vistas (Version 7.24): Environmental Simulations Inc., Reinholds, PA.

Rush, F.E., 1968. Water-Resources Appraisal of Clayton Valley-Stonewall Flat Area, Nevada and California: Water Resources – Reconnaissance Series Report 45, May 1968.

U.S. Geological Survey (USGS). 2005. National Gap Analysis Program. 2005. Southwest Regional GAP Analysis Project – Land Cover Descriptions. RS/GIS Laboratory, College of Natural Resources, Utah State University.

Zampirro, D., 2003. Hydrogeology of Clayton Valley Brine Deposits, Esmeralda County, NV. Nevada Bureau Mines & Geology Special Publication 33: p. 271-280.

Zampirro, D., 2004, Hydrogeology of Clayton Valley brine deposits, Esmeralda County, Nevada: Nevada Bureau of Mines and Geology Special Publication 33, p. 271-280.


December 2022

SRK Consulting (U.S.), Inc.


SEC Technical Report Summary – Silver Peak			Page 184

Zampirro, D., 2005. Hydrogeology of Clayton Valley Brine Deposits, Esmeralda County, The American Institute of Professional Geologists: p. 46-54.


December 2022

SRK Consulting (U.S.), Inc.


SEC Technical Report Summary – Silver Peak			Page 185

25Reliance on Information Provided by the Registrant

The Consultant’s opinion contained herein is based on information provided to the Consultants by Albemarle throughout the course of the investigations. Table 25-1 of this section of the TRS will:

Table 25.1: Reliance on Information Provided by the Registrant


Category	Report Item/Portion	Portion of TRS	Disclose Why the Qualified Person Considers It Reasonable to Rely Upon the Registrant
Legal Opinion	Sub-sections 3.3, 3.4, and 3.6	Section 3	Albemarle has provided a document summarizing the legal access and rights associated with its unpatented mining claims and mineral rights. This documentation was reviewed by Albemarle’s legal representatives. The Qualified Person is not qualified to offer a legal perspective on Albemarle’s surface and title rights but has summarized this document and had Albemarle personnel review and confirm statements contained therein.
Discount Rates	19.1.1	19 Economic Analysis	Albemarle provided discount rates based on the company’s Weighted Average Cost of Capital (WACC). While this discount rate is higher than what SRK typically applied to mining projects (ranging from 5% to 12% dependent upon commodity), SRK ultimately views the higher discount rate as a more conservative approach to project valuation.
Tax rates and government royalties	19.1.2	19 Economic Analysis	SRK was provided with tax rates and government royalties for application within the model. These rates are in line with SRK’s understanding of the tax regime at the project location.


December 2022

SRK Consulting (U.S.), Inc.


SEC Technical Report Summary – Silver Peak			Page 186

Signature Page

This report titled “SEC Technical Report Summary, Pre-Feasibility Study, Silver Peak Lithium Operation, Nevada, USA” with an effective date of June 30, 2021, was prepared and signed by:

SRK Consulting (U.S.) Inc. (Signed) SRK Consulting (U.S.) Inc.

Dated at Denver, Colorado

December 16, 2022


December 2022

Exhibit 96.5

JORDAN BROMINE OPERATION

Technical Report Summary

as of December 31, 2021


214554 Final 26 January 2023

respec.com


rpsgroup.com


TECHNICAL REPORT SUMMARY

JORDAN BROMINE OPERATION

Technical Report Summary




Approval for issue
Michael Gallup, P. Eng.	[email]: michael.gallup@rpsgroup.com	26 January 2023

This report was prepared by RPS Energy Canada Ltd (‘RPS’) within the terms of its engagement and in direct response to a scope of services. This report is strictly limited to the purpose and the facts and matters stated in it and does not apply directly or indirectly and must not be used for any other application, purpose, use or matter. In preparing the report, RPS may have relied upon information provided to it at the time by other parties. RPS accepts no responsibility as to the accuracy or completeness of information provided by those parties at the time of preparing the report. The report does not take into account any changes in information that may have occurred since the publication of the report. If the information relied upon is subsequently determined to be false, inaccurate or incomplete then it is possible that the observations and conclusions expressed in the report may have changed. RPS does not warrant the contents of this report and shall not assume any responsibility or liability for loss whatsoever to any third party caused by, related to or arising out of any use or reliance on the report howsoever. No part of this report, its attachments or appendices may be reproduced by any process without the written consent of RPS. All inquiries should be directed to RPS.


Prepared by:			Prepared for:
RPS			Albemarle Corporation
Michael Gallup Technical Director – Engineering
Suite 600 555 4th Avenue SW Calgary AB T2P 3E7			4250 Congress Street Suite 900 Charlotte, NC 28209 U.S.A.
T +1 403 265 7226 E michael.gallup@rpsgroup.com			T +1 225 388 7076 E
and
RESPEC Edmundo Laporte Peter Christensen Tabetha Stirrett 146 East Third Street PO Box 888 Lexington, Kentucky 40588


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TECHNICAL REPORT SUMMARY

RPS Ref: 214554 Suite 600

555 4th Avenue SW

January 26, 2023 Calgary AB

T2P 3E7

Albemarle Corporation T +1 403 265 7226

4250 Congress Street

Suite 900

Charlotte, NC

28209

U.S.A.

Jordan Bromine Operation

Technical Report Summary as of December 31, 2021

As requested in the engagement letter dated July 26, 2021, RPS and RESPEC have evaluated certain Bromine reserves and resource in the Kingdom of Jordan, as of December 31, 2021 (“Effective Date”), and submit the attached report of our findings. The evaluation was conducted in compliance with subpart 1300 of Regulation SK. This report was originally released February 7th, 2022, but has been amended on January 26th, 2023.

This report contains forward looking statements including expectations of future production and capital expenditures. Potential changes to current regulations may cause volumes actually recovered and amounts future net revenue actually received to differ significantly from the estimated quantities. Information concerning reserves and resources may also be deemed to be forward looking as estimates imply that the reserves or resources described can be profitably produced in the future. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause the actual results to differ from those anticipated. These risks include, but are not limited to, the underlying risks of the mining industry (i.e., operational risks in development, exploration and production; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of resources estimates; the uncertainty of estimates and projections relating to production, costs and expenses, political and environmental factors), and commodity price and exchange rate fluctuation. Present values for various discount rates documented in this report may not necessarily represent fair market value of the reserves or resources.

Yours sincerely,

for RPS Energy Canada Ltd

“Original Signed by Michael Gallup, P. Eng.
on behalf of RPS Energy Canada Ltd.”

Michael Gallup

Technical Director – Engineering

michael.gallup@rpsgroup.com

+1 403 265 7226


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Contents


INDEPENDENT PETROLEUM CONSULTANT'S CONSENT AND WAIVER OF LIABILITY			vi
1 EXECUTIVE SUMMARY			7
1.1 Property Description			7
1.2 Mineral Rights			7
1.3 Geological Setting, Mineralization and Deposit			7
1.4 Exploration			7
1.5 Mineral Processing and Metallurgical Testing			8
1.6 Mineral Resource Estimates			8
1.7 Mineral Reserves Estimates			8
1.8 Mining Methods			8
1.9 Processing and Recovery Methods			9
1.10 Infrastructure			9
1.11 Market Studies			9
1.12 Environmental Studies, Permitting and Plans, Negotiations, or Agreements With Local Individuals or Groups			10
1.13 Capital and Operating Costs			10
1.14 Economic Analysis			11
1.15 Interpretation and Conclusions			11
1.16 Recommendations			11
2 INTRODUCTION			12
2.1 Issuer of Report			12
2.2 Terms of Reference and Purpose			12
2.3 Sources of Information			12
2.4 Glossary			12
2.5 Personal Inspection			13
3 PROPERTY DESCRIPTION			14
3.1 Jordan Land Management and Regulatory Framework			14
3.2 Mineral Rights			14
3.2.1 Jordan Bromine Company and Albemarle Joint Venture			14
3.2.2 Arab Potash Company			17
3.3 Significant Encumbrances or Risks To Performing Work On Permits			18
4 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE, AND PHYSIOGRAPHY			19
4.1 Topography and Vegetation			19
4.2 Accessibility and Local Resources			22
4.3 Climate			22
4.4 Infrastructure			23
4.5 Water Resources			24
5 HISTORY			25
6 GEOLOGICAL SETTING, MINERALIZATION, AND DEPOSIT			26
6.1 Regional Geology			26
6.2 Local Geology			26
6.3 Property Geology and Mineralization			32
7 EXPLORATION			34


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8 SAMPLE PREPARATION, ANALYSES, AND SECURITY			36
9 DATA VERIFICATION			37
10 MINERAL PROCESSING AND METALLURGICAL TESTING			38
10.1 Brine Sample Collection			38
10.2 Security			38
10.3 Analytical Method			39
11 MINERAL RESOURCE ESTIMATES			40
11.1 Dead Sea Elevation			41
11.2 Dead Sea Volume			41
11.3 Dead Sea Salinity			43
11.4 Simulation Model			44
11.5 Bromide Concentration			45
11.6 Resource Estimation			45
12 MINERAL RESERVES ESTIMATES			48
13 MINING METHOD			50
13.1 Brine Extraction Method			50
13.2 New Pumping Station			51
13.3 Life of Mine Production Schedule			56
14 PROCESSING AND RECOVERY METHODS			57
14.1 Mineral Recovery Process Walkthrough			57
15 INFRASTRUCTURE			59
15.1 Roads and Rail			59
15.2 Port Facilities			59
15.3 Plant Facilities			60
15.3.1 Water Supply			60
15.3.2 Power Supply			61
15.3.3 Brine Supply			61
15.3.4 Waste-Steam Management			61
16 MARKET STUDIES			62
16.1 Bromine Market Overview			62
16.2 Major Producers			62
16.3 Major Markets			63
16.4 Bromine Price Trend			63
16.5 Bromine Applications			64
17 ENVIRONMENTAL STUDIES, PERMITTING AND PLANS, NEGOTIATIONS, OR AGREEMENTS WITH LOCAL INDIVIDUALS OR GROUPS			66
17.1 Environmental Studies			66
17.2 Environmental Compliance			66
17.2.1 Compliance With National Standards			66
17.2.2 Compliance With International Standards			66
17.2.3 Environmental Monitoring			67
17.3 Requirements and Plans for Waste and Tailings Disposal			67
17.4 Project Permitting Requirements, The Status of Any Permit Applications			67
17.5 Qualified Person's Opinion			68
18 CAPITAL AND OPERATING COSTS			69


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18.1 Capital Costs			69
18.1.1 Development Facilities Costs			69
18.1.2 Plant Maintenance Capital (Working Capital)			69
18.2 Operating Costs			69
19 ECONOMIC ANALYSIS			71
19.1 Royalties			71
19.2 Bromine Market and Sales			71
19.3 Income Tax			71
19.4 Cash Flow Results			72
19.5 Net Present Value Estimate			76
20 ADJACENT PROPERTIES			78
20.1 Manaseer Magnesia Company			78
20.2 Dead Sea Works Limited			78
21 OTHER RELEVANT DATA AND INFORMATION			81
22 INTERPRETATION AND CONCLUSIONS			82
22.1 General			82
22.2 Discussion of Risk			83
22.2.1 Geopolitical Risk			83
22.2.2 Environmental Risk			85
22.2.3 Additional Raw Materials Risk			85
22.2.4 Other Risk Considerations			86
22.2.5 Risk Conclusion			88
23 RECOMMENDATIONS			90
24 RELIANCE ON INFORMATION PROVIDED BY THE REGISTRANT			91
References			92

Tables


Table 2-1 Glossary of Terms			13
Table 6-1: Typical Concentration of Ions in the Dead Sea and Regular Sea Water Grams per Liter			33
Table 11-1: Dead Sea Water Level and Surface Area			43
Table 11-2: Dead Sea Level, Area, and Volume as Predicted by a Two-Layer Model Based on the Water-Mass Balance Approach, Baseline year, 1997			45
Table 11-3: Dead Sea Bromide Ion Resources			46
Table 11-4: Dead Sea Surface Area Allocation (as of 2020)			47
Table 12-1: Jordan Bromine Company (Area 1 and Petra) Brine Processing and Bromine Production Records (2019-2021)			48
Table 13-1: Ion Concentration in Dead Sea Water			50
Table 13-2: Life of Mine Production schedule			56
Table 15-1: Materials Handled by JBC at Aqaba Port and JBC Terminal			59
Table 15-2: Materials Stored at Jordan Bromine Company Terminal			60
Table 16-1: Bromine Production in Metric Tons by Leading Countries (2015-2020)			62
Table 18-1: Summary of Operating Costs and Capital Expenses			70
Table 19-1: Annual Cash Flow Summary – Proved Reserves – Spot Prices			72
Table 19-2: Annual Cash Flow Summary – Proved Reserves – Spot Prices less 15%			73


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TECHNICAL REPORT SUMMARY


Table 19-3: Annual Cash Flow Summary – Proved Reserves – Spot Prices less 30%			74
Table 19-4: Annual Cash Flow Summary – Proved Reserves – Spot Prices less 45%			75
Table 19-5: Jordan Bromine Company –NPV of Reserves as of December 31, 2021 – Spot Prices less 45%			76
Table 19-6: Jordan Bromine Company – NPV of Reserves as of December 31, 2021 – Spot Prices less 15%			76
Table 19-7: Jordan Bromine Company – NPV of Reserves as of December 31, 2021 – Spot Prices less 30%			76
Table 19-8: Jordan Bromine Company – NPV of Reserves as of December 31, 2021 – Spot Prices less 45%			77
Table 22-1: Project Risks			87
Table 25-1: Reliance on Information Provided by the Registrant			91

Figures


Figure 3.1: Jordan Bromine Company Project Location Map.			15
Figure 3.2: Administrative Divisions of Jordan.			16
Figure 4.1: Morphological Features and General Elevation.			20
Figure 4.2: Vegetation Types of Jordan.			21
Figure 4.3: Average Annual Rainfall .			23
Figure 6.1: Physiological Features.			27
Figure 6.2: (A) Plan View of the Dead Sea in Relation to the Western Boundary Fault and the Arava Fault and (B) Generalized Cross Section of the Dead Sea Lake Geology.			28
Figure 6.3: Main Regional Faults in the Area .			29
Figure 6.4: Map of the Jordan Bromine Company Area and Its Generalized Geology, Including Faults ,.			30
Figure 6.5: Depositional Settings of the Dead Sea.			31
Figure 11.1: Interannual Changes in the Dead Sea Total Vertical Stability and Sea Level .			42
Figure 11.2: Quasi-Salinity (Sigma 25) of the Dead Sea. .			44
Figure 11.3: Schematic of the Mass Balance for the Dead Sea Using a Two-Layer System.			45
Figure 11.4: Schematization of the Water Mass Balance for the Dead Sea Using a Two-Layer System.			46
Figure 13.1: Process Sequence Schematic.			51
Figure 13.2: Solar Evaporation and Production Plant Map.			52
Figure 13.3: Location of the Dead Sea Brine Pumping Station Relative to the APC and JBC Plants.			53
Figure 13.4: Proposed Location for the New Pumping Station Relative to the Existing Pumping Station PS3.			54
Figure 13.5: Pond C-7 Feedbrine Pumping Station (for Bromine and Magnesium Plants).			55
Figure 14.1: Area 1 and Petra Mineral Recovery Trains.			57
Figure 16.1: Bromine Price Trend as per China Petroleum and Chemical Industry Federation (Price is in US$ )			64
Figure 19.1: Net Present Value Distribution of Proved Reserves by Price Forecast.			77
Figure 20.1: The Adjacent Properties of Manaseer Magnesia Company and Arab Potash Company.			79


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TECHNICAL REPORT SUMMARY

INDEPENDENT CONSULTANT'S
CONSENT AND WAIVER OF LIABILITY

The undersigned firm of Independent Consultants of Calgary, Alberta, Canada knows that it is named as having prepared an independent report of the bromine reserves of the Jordan property owned by Albemarle Corporation and it hereby gives consent to the use of its name and to the said report. The effective date of the report is December 31, 2021.

In the course of the evaluation, Albemarle provided RPS Energy Canada Ltd. (RPS) personnel with basic information which included the field’s licensing agreements, geologic and production information, cost estimates, contractual terms, studies made by other parties and discussions of future plans. Any other engineering or economic data required to conduct the evaluation upon which the original and addendum reports are based, was obtained from public literature, and from RPS non-confidential client files. The extent and character of ownership and accuracy of all factual data supplied for this evaluation, from all sources, has been accepted as represented. RPS reserves the right to review all calculations referred to or included in the said reports and, if considered necessary, to revise the estimates in light of erroneous data supplied or information existing but not made available at the effective date, which becomes known subsequent to the effective date of the reports.

“Original Signed by Michael Gallup, P. Eng. on behalf of:”

RPS Energy Canada Ltd.


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TECHNICAL REPORT SUMMARY

1EXECUTIVE SUMMARY

This Technical Report Summary (“TRS”) was prepared by RESPEC at the request of Albemarle Corporation (Albemarle, or the company) for the company’s Jordan Bromine Company (“JBC”). The TRS complies with disclosure standards of the SEC S-K Regulation 1300 following the TRS outline described in CFR 17 and reports the estimated reserves for the Jordan bromine operation as well as all summary information required as outlined in the SEC S-K Regulation 1300.

1.1Property Description

The JBC operation is located in Safi, Jordan, and is located on a 26-ha area on the southeastern edge of the Dead Sea, about 6 kilometers north of the of the Arab Potash Company (APC) plant. JBC also has a 2-hectare storage facility within the free-zone industrial area at the Port of Aqaba.

1.2Mineral Rights

JBC was established in 1999 and is a joint venture between Albemarle Holdings Company Limited, a wholly owned subsidiary of Albemarle and the Arab Potash Company (APC). JBC’s operations primarily consist of the manufacturing of bromine, from bromide-enriched brine which is a by-product of potash operations from the Dead Sea waters, conducted by APC. The Government of the Hashemite Kingdom of Jordan granted APC a concession for exclusive rights to exploit the minerals and salts from the Dead Sea brine until 2058. Rights granted to APC are applicable to JBC by virtue of APC’s participation in the Joint Venture. APC maintains all the necessary permits to guarantee the continuous operation of its facilities under Jordanian legislation.

1.3Geological Setting, Mineralization and Deposit

Movement of the plates that created the basin containing the Dead Sea began 15 Ma and the plates continue to diverge today at a rate of 5 to 10 mm per yeari. The Dead Sea is an isolated hypersaline lake within the lowest part of the catchment basin and is a unique, current-day example of evaporitic sedimentation and accumulation within a brine body1.

The climate, geology and location provide a setting that makes the Dead Sea a valuable large-scale natural resource for potash and bromine. Today, the Dead Sea has a surface area of 583 km2 and a brine volume of 110 km3. The Dead Sea is the world’s saltiest natural lake2, containing high concentrations of ions compared to that of regular sea water and an unusually high amount of magnesium and bromine. There is an estimated 900 million tonnes of bromine in the Dead Sea.

Evaporation greatly exceeds the inflow of water to the Dead Sea, causing a negative water balance and a receding shoreline of approximately 1.1 m to 1.25 m per year1. Variable evaporation rates and uncertain subsurface inflow of fresh water make it difficult to predict its water deficit. The Dead Sea contains a large and deep northern basin and a shallow southern basin. The southern Basin is a saline mudflat, and the water level is maintained by artificial flooding, with North Basin brine.

1.4Exploration

There is no exploration as typically conducted for the characterization of a mineral deposit. A limited site investigation program was carried out in 1966 when most of the southern basin of the Dead Sea was covered in up to 3 m of brine. A more detailed program, with a cost of £3 million, took place in 1977 when the brine level had receded from the southern basin, leaving only land-locked ponds in the central depression.


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1.5Mineral Processing and Metallurgical Testing

The JBC bromine plants and connection to the APC C-7 carnallite ponds was designed to move substantial quantities of concentrated brine to the central bromine production facilities, where brine is processed to produce bromine. Knowing the consistency of the bromide salts (“bromides”) within the feedbrine is critical for operations and business planning of the various bromine derivative sales. Feedbrine and tailbrine samples are taken frequently, upstream and downstream of the bromine tower, to capture any concentration changes.

The sampling process is systematic and documented. Bromides within the brine is measured by a widely used halogen titration process; methods appear to be reasonable and well established. The sampling and analytical processes are adequate to support the plant operation.

1.6Mineral Resource Estimates

JBC’s bromine production plant is atypical of many mineral mining and processing operations in that the feedstock for the plant is concentrated brine available from another mineral processing plant owned by APC. The feedstock for the APC plant is drawn from the Dead Sea, a nonconventional reservoir, a reservoir owned by the nations of Israel and Jordan.

As such, there are no specific resources owned by APC or JBC, but rather APC has exclusive rights granted by the Hashemite Kingdom of Jordan to withdraw brine from the Dead Sea and process it to extract minerals.

The measured resources of bromide ion attributable to Albemarle’s 50% interest in its JBC joint venture is estimated to be approximately 177.5 MMt. From these large resources, JBC is extracting approximately 1 percent of the bromine available.

1.7Mineral Reserves Estimates

Proven and probable reserves have been estimated based on the operational parameters, economics and concession agreements for JBC.

The reserve estimate is constrained by the time available under the concession agreement with the Hashemite Kingdom of Jordan, and the processing capability of the plant. The forecast volumes of brine processed are supported by demonstrated plant performance. The reserve estimate is not constrained by available resources, with approximately 1 percent of the measured resources being consumed. Costs are based on forward projections supported by historical operating and capital costs, with no major capital projects or plant expansions required to support the operating forecast. Revenues are based on a range of bromine sales prices between the spot price for the effective date of December 31, 2021, and the spot price less 15 percent, 30 percent and 45 percent.

The plants are forecast to process approximately 16.47 MMt of brine per year on average over the remaining concession life. On an annual basis, the feed contains approximately 146,400 tonnes of bromide ion. At the plant process recovery of 80-85 percent (bromine from bromide), product bromine is estimated at approximately 122,100 tonnes per year.

The APC concession and JBC’s ownership of the facility expires at the end of 2058. Over the 37 years of production from the reserves effective date of December 31, 2021, an estimated 4.89 MMt of bromine will be produced, which establishes the reserve estimate.

The proven reserves attributable to Albemarle’s 50% interest in its JBC joint venture are estimated to be approximately 2.45 MMt of elemental bromine.


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1.8Mining Methods

As evaporation takes place the specific gravity of the brine increases until its constituent salts progressively crystallize and precipitate out of solution, starting with sodium chloride (common salt) precipitating out to the bottom of the ponds (pre-carnallite ponds). Brine is transferred to other pans in succession where its specific gravity increases further, ultimately precipitating out of the sodium chloride. Carnallite precipitation takes place at C-7 carnallite pond. Where it is harvested from the brine and pumped as slurry to a process plant (where the potassium chloride is separated from the magnesium chloride). JBC extracts the bromide-rich, “carnallite-free” brine from pond C-7 through a pumping station with a capacity of approximately 84.1 MCM per year. This brine feeds the bromine and magnesium plants.

1.9Processing and Recovery Methods

Bromide-enriched brine (feedbrine) is conveyed to the two bromine plants via two parallel bromine production trains within the JBC facility via an open channel. Elemental bromine is produced at the JBC plants through a series of chemical processes.

The brine is then mixed with chlorine to extract the remaining bromine from solution. Chlorinated brine enters the bromine distillation tower (at approximately 120°C) where additional chlorine is added to continue the reaction with any residual bromide salts and where the brine stream is heated by adding steam, maintaining a temperature above the boiling point. Bromine exiting the recovery section of the tower is purified.

Heated bromide-depleted brine (tailbrine) exits the bromine distillation tower and is mixed with a strong base to neutralize any remaining acid, bromine, or chlorine. Then it is pumped to a storage pond for cooling and eventual discharge, recycled back to the Dead Sea via the APC process plant. Vaporized bromine is condensed, and the wet bromine is fed to a glass lined crude bromine storage drum that acts as an intermediate storage before downstream purification (and removal of any dissolved chlorine).

1.10Infrastructure

The Jordan Valley Highway/Route 65 is the primary method of access for supplies and personnel to JBC. The Port of Aqaba is the main entry point for supplies and equipment for JBC, where imported shipping containers are offloaded from ships and are transported by truck to JBC via the Jordan Valley Highway. Aqaba is approximately 205 km south of JBC via Highway 65. Major international airports can be readily accessed either at Amman or Aqaba. Jordan’s railway transport runs north-south through Jordan and is not used to transport JBC employees and product.

JBC ships product in bulk through a storage terminal in Aqaba. There are above ground storage tanks as well as pumps and piping for loading these products onto ships. JBC main activities at Aqaba are raw material/product storing, importing, and exporting. An evaporation pond collects the waste streams from pipe flushing, housekeeping, and other activities.

Infrastructure and facilities to support the operation of the bromine production plant at the Safi site is compact and contained in an approximately 33 ha area. Fresh water is sources from the Mujib Reservoir, a man-made reservoir. Approximately 1.0 to 1.2 MCM of water is used annually.

Electricity is generated through the National Electric Power Company of Jordan (NEPCO) and distributed directly to JBC via the Electricity Distribution Company (EDCO), owned and operated by Kingdom Electricity Company. There are 6 substations and onsite.

Overall, the project is well supported by quality infrastructure.


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1.11Market Studies

The global bromine market is expected to grow steadily at a Compound Annual Growth Rate (CAGR) of approximately 2.83 percent between 2021 and 2025. The growth trend is attributed in part by an increased demand for plastics and flame-retardant chemicals using bromine to develop fire resistance. Also driving the trend is the use of bromine and its derivatives as mercury reducing agents, for example, used for the reduction of mercury emissions from combustion of coal in coal-fired power plants. The need for specialty chemicals in various end-use industries such as oil and gas, automobile, pharmaceuticals, and construction will also drive the demand for bromine. The major producers of elemental bromine in the world are Israel, Jordan, China, and the United States. The global bromine market is dominated by manufacturers who have an extensive geographical presence with massive production facilities, all around the world.

A forecast of the global bromine market till 2023 suggests that Asia would be the fastest growing region for bromine consumption due to a growing population and the increasing purchasing power in the developing nations. The growth of agriculture and automobile industries in countries such as China and India will also drive the increasing demand for bromine.

In 2021, the price of bromine significantly increased, reaching a peak of $10,700 per tonne in November. The bromine spot price on the effective date of this report, December 31, 2021, was US$ 8,362 per tonne and the overall trend is towards a progressive decrease.

The above-described behavior of the market is the product of a combination of factors, including China’s decrease in bromine production from brine due to the country’s electricity curtailment policy

Because the market for bromine is expected to grow and oversupply is not foreseen, the price of bromine is expected to stay strong in the near future.

1.12Environmental Studies, Permitting and Plans, Negotiations, or Agreements With Local Individuals or Groups

JBC has carried out environmental impact studies in compliance with Jordanian regulations. The environmental impact studies are part of the public domain and accessible through the MIGA web site (www.miga.org).

JBC complies with national environmental and labor regulations. It also meets or exceeds the international regulations of OSHA and NFPA. JBC is the first company of its kind in Jordan to become an authorized exporter into Europe and has been certified for ISO 9001, 14001 and VECAP (Voluntary Emissions Control Action Program). The company’s environmental program has been ISO 14001 certified by Lloyd’s Register since 2007 and further enhanced through the adoption of the integrated management system for quality (IS0 9001: 2015, OHSASL800L, 2007, ISO/4001:2015) certificate received in 2018.

JBC works closely with the local communities, governmental and non-governmental organizations (NGOs) to make a positive difference and help communities prosper, both socially and environmentally. The company has established the Caring for Jordan Foundation, which contributes to the well-being of Jordanians by helping them to improve their quality of life through support of sustainable community projects.

1.13Capital and Operating Costs

The JBC facility is an active operation with a track record of industrial production of elemental bromine and most of the major capital expenditures have already taken place in the past. Review of the business plan provided by JBC confirmed no further facilities or plant capital is required because JBC intends to keep all of the major components of its industrial facility through the expiration of the concession contract. An annual sustaining capital allocation of approximately $13.00-$14.40 million has been included.


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Plant operating costs and forecast budget were reviewed. Plant operating costs are expected to remain relatively constant and are forecast at $250/tonne of product bromine.

1.14Economic Analysis

An economic model has been used to forecast cash flow from elemental bromine production and sales to derive a net present value for the bromine reserves. Cash flows have been generated using annual forecasts of production, sales revenues, operating costs and capital costs.

At the assumed bromine sales price range of $4,565 to $8,300/tonne, the operations generate an NPV of $2.72 billion to $5.25 billion at a discount rate of 15 percent as of December 31, 2021, demonstrating economic viability.

1.15Interpretation and Conclusions

JBC primary raw material is bromide enriched brine from the adjacent APC potash processing business. APC has mineral rights to brine extracted from the Dead Sea through 2058. The measured resources for bromide ion in the Dead Sea is far in excess of the stated proven reserves of 4.89 million tonnes of bromine. The operation has been in production since 2002 and has a demonstrated production capacity to support the reserve estimate.

1.16Recommendations

No additional work relevant to the existing reserves is applicable at this time. The JBC plants have demonstrated capacity to operate at the production levels forecasted through the life of the reserve. No significant capital projects are anticipated to extend the life or expand the capacity of the existing plants.


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2INTRODUCTION

2.1Issuer of Report

This Technical Report Summary (TRS) was prepared at the request of Albemarle Corporation (Albemarle), and this report is being filed for the first time under SEC S-K Regulation 1300 (SEC S-K 1300) reporting requirements for Albemarle’s Jordan Bromine Company (JBC) operation located in Safi, Jordan. The JBC is a joint venture with Arab Potash Company (APC). Headquartered in Charlotte, North Carolina, Albemarle is a global leader in specialty chemicals such as lithium, bromine, and refining catalysts.

2.2Terms of Reference and Purpose

The following general information applies to this TRS:

•This document reports the estimated reserves for the JBC operation as well as all summary information required by the SEC S-K 1300. The focus of this TRS and the scientific and technical information in this report only apply to the JBC operation. RESPEC Consulting Inc. (RESPEC) is entirely independent of Albemarle and has no interest in the mineral property discussed in this report.

•This TRS was prepared by RESPEC, complies with disclosure standards of the SEC S-K Regulation 1300, and follows the TRS outline described in CFR 17, Part 229.600.

•The point of reference (i.e., effective date) of this report is December 31, 2021, which is also the deadline for the data included within this report.

•Reserve estimates are presented on a 100 percent basis (i.e., the reserve is the total reserve for JBC) with Albemarle’s share of the reserve per the joint venture with APC is 50 percent.

•Units presented are metric units, unless otherwise noted and currency is expressed in United States dollars (USD or $) unless otherwise noted.

•Copyright of all text and other matters in this document, including the manner of presentation, is the exclusive property of RESPEC and Albemarle as per the Agreement signed between RESPEC, RPS Group (RPS), and Albemarle.

•RESPEC will receive a fee for preparing this TRS according to normal professional consulting practices. The fee is not contingent on the conclusions of this report and RESPEC will not receive any other benefit for preparing this report. RESPEC does not have any monetary or other interests that could be reasonably considered as capable of affecting its ability to provide an unbiased opinion in relation to the project. RESPEC is a 100 percent employee-owned global leader in integrated technology solutions for mining, energy, water, natural resources, infrastructure, and services.

2.3Sources of Information

The interpretations and conclusions presented in this report are primarily based on the information obtained from the public sources and information provided by Albemarle. All source materials have been properly cited and are referenced in Chapter 24.0 of this report.

2.4Glossary

Description of terms that are used throughout this report are provided in Table 2-1.


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Table 2-1 Glossary of Terms


Term	Abbreviation	Description
Assay		A test performed to determine a sample’s chemical content.
Brine		A high-concentration solution of salt (NaCl) in water (H2O).
Bromide	Br	A compound of bromine with another element or group, especially a salt containing the anion Br− or an organic compound with bromine bonded to an alkyl radical.
Bromine		A halogen element with atomic number 35 and element symbol Br that is the 10th most abundant element in sea water and 64th in the earth's crust.
Carnallite	KCl.MgCl2 6(H2O)	A mineral containing hydrated potassium and magnesium chloride.
Halite	NaCl	Sodium chloride, which is a naturally occurring sodium salt mineral.
Jordanian dinar	JD	Official currency of the Hashemite Kingdom of Jordan
Million cubic meters	MCM	Million cubic meters, a measurement of volume
Million metric tonnes	MMt	Million metric tonnes
Sylvite	KCl	Potassium chloride, which is a metal halide salt consisting of potassium and chlorine, also known as potash.
Sylvinite		A rock consisting of a mineralogical mixture of halite and sylvite crystals ± minor clay and carnallite.
Potassium Oxide	K2O	A standard generally used to indicate/report a potash deposit ore grade.
Insoluble		Water-insoluble impurities (e.g., generally clay, anhydrite, dolomite, or quartz).
Seismic Anomaly		A structural change in the natural, uniformly bedded geology.
Tetrabromobisphenol-A	TBBPA	A derivative of bromine and is one of the most prevalent flame retardants used in plastic paints, synthetic textiles, and electrical devices.
United States dollar	USD or $	Official currency of the United States of America

2.5Personal Inspection

Due to travel restrictions related to the COVID-19 pandemic, no site visit has taken place. A site visit will take place when travel restrictions are lifted.


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3PROPERTY DESCRIPTION

JBC is in the Hashemite Kingdom of Jordan (Jordan), in the Governorate of Karak, and is located on the southeastern edge of the Dead Sea. The JBC production plant facility occupies a 26-hectare (ha) area with geographic coordinates of 31° 8’ 34.85”N and 35° 31’ 34.68”E. The JBC site, as shown in

Figure 3.1, is located approximately 6 kilometers (km) north of the APC plant.

JBC also has a 2-ha storage facility within the free-zone industrial area at the Port of Aqaba. The facility is used to store bulk-liquid products before export and is located near the Jordan Oil Terminals Company, which is just west of the Aqaba Thermal Power Station and east of Solvochem-Holland. The site contains storage tanks and pumps and is connected to the nearest oil port by a 1.5-km pipeline. An extensive expansion of this facility was completed in 20133.

The administrative division of Jordan is shown in Figure 3.2. The country consists of 12 Governorates (i.e., Muhafazah). Control of the Dead Sea waters and minerals is shared by Jordan on the east and Israel (including the West Bank) on the west.

3.1Jordan Land Management and Regulatory Framework

Established in 1927, the Department of Lands and Surveys (DLS) is responsible for all legal property registration in Jordan. The DLS “has been established on a solid basis” according to The Land Tenure Journal, which is a peer-reviewed, open-access journal of the Climate, Energy and Tenure Division of the Food and Agriculture Organization of the United Nations4.

The Jordan Valley Authority (JVA) manages various aspects of economic activity and agriculture water management on the Jordan side of the Jordan Valley. The Aqaba Special Economic Zone Authority (ASEZA) is responsible for most government-related issues in the Aqaba Region4. The ASEZA was established in 2001 by the government of Jordan to independently (financially and administratively neutral) manage and regulate the economic development of the Aqaba Special Economic Zone. A description of the ASEZA and the laws and regulations are available at its website (http://www.aqabazone.com/).

The Ministry of Energy and Mineral Resources is the primary regulator of most mining activities in Jordan that provides information (e.g., studies and maps) to interested companies and investors to help facilitate exploration and extraction. These efforts promote a strong regulatory environment with international industry standard environmental and safety best practice regulationsv.

3.2Mineral Rights

3.2.1Jordan Bromine Company and Albemarle Joint Venture

JBC was established in 1999 as a joint venture between Albemarle Holdings Company Limited (a wholly owned subsidiary of Albemarle) and APC. Albemarle holds a 50 percent interest in JBC Limited. The bromide-enriched brine is a by-product of potash operations conducted by APC. JBC’s operations primarily consist of the manufacturing of bromine, from which derivative products are made including TBBPA, calcium bromide, sodium bromide, hydrobromic acid, and potassium hydroxide.


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Figure 3.1: Jordan Bromine Company Project Location Map.


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Figure 3.2: Administrative Divisions of Jordan.


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The share agreement signed between APC and Albemarle Holdings Company Limited established that Albemarle’s share on the losses, liabilities, and interest expense of the joint venture is 50 percent; however, its share in the joint venture’s profit was 70 percent until 2012 and has been 60 percent since 2013. This percentage varies and depends on product split.

APC produces potash from the brine extracted from the Dead Sea. A concentrated bromide-enriched brine extracted from APC’s evaporation ponds is the feed material for the JBC plant, as well as for the Manaseer Magnesia Company (MMC) (formally Jordan Magnesia) plant. The most relevant clauses of APC’s concession Agreement with the Government of Jordan are summarized in the following text:

•The agreement grants to APC licenses to import all devices, tools, transport means, machinery, and construction material necessary for the entire duration of the concession, its expansion or completion, work continuation, and relocation.

•APC is exempted from import fees, customs fees, and all other fees imposed on imported goods, provided they are used for the purposes of the company. If APC sells the fee-exempted goods, those goods are subject to taxation as per the Jordanian customs law.

•APC’s products are exempt from exportation licenses and all fees imposed on exported goods.

•APC retains exclusivity over the mining rights throughout the term of the concession.

•The concession grants ample rights to APC to acquire fresh water from the Jordan River, the Al Mujeb or the Maeen and Sweimeh, to be used at its facilities for mineral extraction and processing as well as to drill wells in the concession area to obtain fresh water. APC also has the right to use spring water from sources located out of the concession area, with the exception of sources that are registered as private property, and the right to request expropriation at the company’s expense.

•APC also has the right to establish stone quarries on fee- and license-exempted, state-owned land.

All these rights are applicable to JBC by virtue of APC’s participation in the joint venture.

3.2.2Arab Potash Company

According to APC’s website (http://arabpotash.com), they are the eighth largest potash producer in the world by volume of production and the sole producer of potash in the Arab world. APC also has one of the best track records among Jordanian corporations in the areas of work safety, good governance, sustainable community development, and environmental conservation. Established in 1956 in the Hashemite Kingdom of Jordan as a pan-Arab venture, APC operates under a concession from the Government of Jordan that grants it exclusive rights to extract, manufacture, and market minerals from the Dead Sea brine until 2058. Upon termination of the concession, 100 years from the date it was granted, ownership of all plants and installations will be transferred to the Government of the Hashemite Kingdom of Jordan at no cost to the latter.

In addition to its potash operations, APC also invests in several downstream and complementary industries related to the Dead Sea salts and minerals, including potassium nitrate, bromine, and other derivatives. As a major national institution and economic contributor, APC employs more than 2,200 workers across its locations in Amman, Aqaba, and Ghor Al-Safi. Potash production began in1983 and has since progressed with various projects aimed at optimizing and expanding this production. The initial plant was built to a capacity of 1.2 million tonnes (MMt) of product and was expanded in the late 1980s to handle 1.4 MMt with key modifications undertaken with the Solar System to enhance the production of the ore accordingly. A second plant based on different technology with a capacity of 0.4 MMt was built in


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1994 and brought the total production capacity to 1.8 MMt. Another cold crystallization plant of 0.45 MMt was built in 2010, which brought the total production capacity to 2.45 MMt. Further expansion is currently under evaluation to bring the total potash capacity to 3.2 MMt.

3.3Significant Encumbrances or Risks To Performing Work On Permits

The brine supply to the JBC facility fully depends on raw material extracted and pre-processed, through an evaporation sequence, by APC. The pumping facilities, which will be described later in this report, are owned and operated by APC and covered by APC’s permits. Because APC is a national enterprise and the sole producer of a key commodity, all the necessary permits are maintained by APC to guarantee the continuous operation of its facilities under Jordanian legislation. Therefore, the encumbrances and/or risks to perform work on the operational permits are considered minimal. The fact that APC is both the entity controlling the subject mineral rights and a partner in the joint venture, JBC contributes to a seamless coordination regarding the key permitting aspects of the operation.


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4ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE, AND PHYSIOGRAPHY

4.1Topography and Vegetation

The surface of the Dead Sea is at an elevation of approximately 430 meters (m) below sea levelvii within the Dead Sea Rift Valley, which is the lowest surface on earth. The Dead Sea Rift Valley contains a series of pull-apart basins, including the Jordan Valley and Wadi Araba/Arava Valley, that connect to the Dead Sea8.

The Jordan River is within the Jordan Valley that extends south from the Sea of Galilee to the north and connects to the northern shoreline of the Dead Sea. The Jordan River is the only major source of water to the Dead Sea9. The Jordan Valley is named the “food basket of Jordan.” With a continual supply of water (dams and irrigation) and its year-round warm temperatures, the Jordan Valley and the Southern Ghor are among the most important agricultural areas in Jordan9.

The Wadi Araba/Arava Valley extends from the southern shore of the Dead Sea and continues south to the Port of Aqaba. This valley is geologically related to the Jordan Rift Valleyx. This stretch of valley land is predominantly sand-dune-covered desert with scattered settlements, but the northern and the southern shore areas support some irrigated agriculture10.

Most of the Dead Sea shoreline is surrounded by steeply dipping, incised valleys and mountainous terrain. From the Port of Aqaba, the elevation rises from sea level to about 200 m above sea level along the Wadi Araba Ghor and drops drastically below sea level at the Dead Sea. The elevation gently rises but stays below sea level along the Jordan River/Valley depression, north to the Sea of Galilee (Figure 4.1).

The Wadi Araba - Dead Sea depression steeply rises to the east and forms the mountain ridge (known as the Northern Highlands), which is home to Jordan’s natural forests and are intersected by many deep wadis (canyons)9. Mountain elevations reach 1,850 m above sea level and are steeper and less vegetated in the south along the mountain ridge9.

An east-west ridge separates the deep northern Dead Sea basin from a shallow southern Dead Sea basin (or lagoons). The Dead Sea is approximately 80 km long, 13 km wide and around 330 m deep in the north basinxi. The southern shallow basin is made up of shallow lagoons that average 2 m in depth. The southern basin would be exposed and dried up because of the continued drop in sea level if not for their current use as solar evaporation ponds that were constructed for the chemical extraction industry10.

Saline-tolerant vegetation begins to grow 50 to 100 m from the Dead Sea shoreline and diversifies to less salt-tolerant vegetation moving away from the Dead Sea, with vegetation variety and density increasing within the wadis3. Figure 4.2 displays the vegetation types in Jordan.


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Figure 4.1: Morphological Features and General Elevation.


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Figure 4.2: Vegetation Types of Jordan3.


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The Gulf of Aqaba (or Gulf of Eilat, Israel) is a large gulf at the northeastern tip of the Red Sea. The gulf is 177 km long with an average width of about 12 to 17 km [https://www.britannica.com/place/Gulf-of-Aqaba]. The gulf coastline is primarily mountainous with the east side bordered by Jordan (approximately 27 km of Jordan coastline is on the northeastern portion) and Saudi Arabia. The west side of the gulf is bordered by Egypt and a small portion of Israel coastline (in the very northwestern portion of the gulf).

4.2Accessibility and Local Resources

The geographical location of Jordan has made it a crossroads of the Middle East for thousands of years. Jordan continues to play a major role by participating in and providing a fairway for trades because of its location at the junction of Africa, Asia, and Europe4.

JBC is approximately 137 km south-southwest from Amman (the capital city of Jordan) and 40 km from the city of Al-Karak. The Jordan Valley Highway/Route 65 runs north-south and locally along the east side of the Dead Sea and is the primary access method for supplies and personnel to JBC. The Port of Aqaba is the main entry point for supplies and equipment for JBC, where shipping containers imported on ships are offloaded to trucks and transported to JBC via the Jordan Valley Highway/Route 65.

The Jordan Valley Highway/Route 65 is a major highway that runs from the northwestern region of Jordan (from North Shuna) along the western edge of Jordan and south to Aqaba and the Port of Aqaba. JBC is situated midway along this highway, which is interconnected to several primary and secondary highways available to the western region of Jordan.

From the outskirts of Amman, JBC can be accessed via vehicle by traveling southwest on Dead Sea Road/Route 40 for approximately 35 km and then south on the Jordan Valley Highway/Route 65 for 77 km. Various networks of primary and secondary highways and roads surround Amman.

JBC is 40 km from Al-Karak (one of Jordan’s major cities) and can be reached via vehicle by travelling west on Al-Karak Highway/Route 50 for 26 km to Jordan Valley Highway/Route 65 and then south for 12.2 km. The community of Gawr al-Mazraah is in close proximity to JBC and is located 14.5 km north of JBC along Jordan Valley Highway/Route 65. The primary and secondary highways are provided in Figure 3.1.

The Port of Aqaba is located 205 km south of JBC along the Jordan Valley Highway/Route 65 and is the only port in Jordan and the main entry point for supplies and equipment for JBC. The Jordanian port is on the Red Sea's Gulf of Aqaba and is owned by the Aqaba Development Corporation. The port has undergone major redevelopment and expansion since 2002 and consists of 12 terminals with more than 32 specialized berths, which are operated by world-class operators (https://www.adc.jo/).

Jordan has three commercial airports that are all located within proximity to the JBC plant, as shown in Figure 3.1. The Queen Alia International Airport and Amman/Marka Civil Airport are 35 km south of Amman and located approximately 121 km north and northeast of JBC via Jordan Valley Highway/Route 65 and secondary roads and highway. The King Hussein International Airport is in Aqaba, which is 205 km south of JBC.

Jordan’s railway transport line is operated by Hijazi Jordan Railway and the Aqaba Railway Corporation (Al Rawabi Environment & Energy Consultancies). The line runs north-south through Jordan and is not used to transport JBC employees and/or product.

4.3Climate

Located within a desert, the Dead Sea and its shoreline is extremely arid. Summer temperatures average 34 degrees Celsius (°C) in August with maximum temperatures reaching 51°C. Mild winter temperatures in January average 17°C on the south shore and 14°C on the north shore7. Hot, dry southerly winds can be very strong and can potentially cause sandstorms. Rainfall averages are only 2 inches (65 millimeter) per year7 and occurs primarily during the winter months of November to March; January is the coldest and rainiest month in the Ghor Safi area3. Figure 4.3 is taken from the Red Sea Dead Sea Water Conveyance Study10 and depicts the average annual rainfall over an area that included Jordan and Israel.


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Figure 4.3: Average Annual Rainfall 10.

4.4Infrastructure

The JBC facility is located in the Karak Governorate of Jordan and is connected to the nearby city of Al-Karak by the Jordan Valley Highway/Route 65 and the Al-Karak Highway/Route 50. The site is connected to the city of Amman by the Dead Sea Road/Route 40 and the Jordan Valley Highway/Route 65. The Jordan Valley Highway/Route 65 connects the facility with the Port of Aqaba in the Red Sea.

Electricity is generated through the National Electric Power Company of Jordan (NEPCO) and is distributed directly to JBC through the Electricity Distribution Company (EDCO). EDCO is owned and operated by Kingdom Electricity Company, which is one of the preeminent holding companies in Jordan that invests in energy generation and distribution companies/utilities.

In February 2014, Noble Energy Inc. (Noble Energy), a partner in Israel’s Tamar natural-gas field, announced that they had signed an agreement to supply APC and JBC with fuel beginning in 201612. In January 2017, APC and JBC were connected to Israel’s national pipeline network and gas exports had started that month. The agreement with Noble Energy appears to have a duration of 15 years (until 2032)


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and is based on a price of $5.50 per million British thermal unit (USD/btu) and be linked to the price of Brent crude oil13.

In November 2018, APC and JBC announced that the quantity of natural gas that Noble Energy would supply to both Jordanian companies would increase in 2019. This additional agreement would extend until the end of the original agreement in 203214

JBC employs more than 350 people. Most personnel who work shifts (i.e., lower-technical staff and labor) typically stay in a company residence located near the JBC plant, and higher-level technical staff and management usually commute from Amman3. The company residence is equipped with internet, televisions, a sports hall, and a cafeteria that is catered by a contractor3. Small towns and villages are located between Amman and JBC; however, few personnel reside in these communities.

The Port of Aqaba is the main entry point for supplies and equipment for JBC, where shipping containers imported on ships are offloaded to trucks and transported to JBC via the Jordan Valley Highway/Route 65.

4.5Water Resources

Fresh water is supplied by the Mujib River that originates from the Mujib Reservoir (or dam), which is a man-made reservoir created in 1987 by the Royal Society for the Conservation of Nature. The Mujib River flows west through the Wadi Mujib Canyon and into the Dead Sea. According to JBC, approximately 1.0 to 1.2 million cubic meters (MCM) of water is used annually. Per the JV agreement, APC guarantees that JBC will receive all the brine and fresh water it requires for its operations.

JBC’s water supply is provided by APC. APC is enhancing its water security through several projects, primarily by constructing dams in the southern regions. APC has financed the construction of the 4 million m3 Wadi Ibn Hammad Dam in the Al-Karak Governorate and is studying the feasibility of financing the construction of Al-Wadat Dam in the Tafilah Governorate. These projects will achieve water cost savings and provide water to the local communities and the agriculture sector6.


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5HISTORY

JBC is Jordan’s first and only producer and manufacturer of bromine and bromine derivatives and was established in January 1999. JBC is registered as a private Free Zone Establishment in Safi, located in the southeastern area of the Dead Sea, Jordan, and is the first Jordanian company to become certified in the International Maritime Dangerous Goods (IMDG) Code, the Agreement concerning the International Carriage of Dangerous Goods by Road (ADR), and the International Air Transport Association (IATA). JBC has successfully established sales in more than 30 countries worldwide since its inception and is the first company of its kind in Jordan to become an authorized exporter to Europe.

The following timeline is the history of the development of JBC joint venture and is summarized from the Albemarle Website.

•1999: Albemarle forms a joint venture with Jordan Dead Sea Industries Company (JODICO) and APC to manufacture bromine and bromine derivatives in a world-scale complex to be built in Jordan.

•2000: JBC is registered as a private Free Zone Establishment in Safi in southeast Jordan in June.

•2002: The JBC bromine plant begins operation.

•2003: Hydrogen bromide (HBr) and calcium bromide (CaBr)/sodium bromide (NaBr) plants begin operating. JBC also becomes an authorized exporter to Europe of bromine and bromine derivatives.

•2005: JBC receives IMDG, ADR, and IATA certifications. The chlorine plant begins operations.

•2011: JBC announces that it will double the capacity of its bromine production to meet expanding global customer requirements.

•2013: JBC completes the first phase of its expansion to double its bromine production capacity.

•2017: The expansion of JBC’s TBBPA facilities goes into operation.


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6GEOLOGICAL SETTING, MINERALIZATION, AND DEPOSIT

6.1Regional Geology

The Dead Sea Basin, as shown in Figure 6.1, is a tectonically subsiding, strike-slip depression that belongs to the Aqaba-Dead Sea-Jordan Valley rift that formed between the African and Arabian diverging tectonic plates (an active plate boundary) and connected the Red Sea to Turkey15. The Dead Sea depression is a result of the transform faulting between the plates; the Western Boundary fault and the Arava fault are drawn on Figure 6.21. The Dead Sea is a hypersaline lake within the lowest part of the catchment basin and is a unique, current-day example of evaporitic sedimentation and accumulation within a brine body1.

Movement of the plates that created the basin began 15 million years ago (Ma) and the plates continue to diverge at a current rate of 5 to 10 mm per year1. Holocene and Miocene sediments comprise approximately 8 to 10 km of the basin fill that underlies the Dead Sea1. The Mediterranean Sea water is believed to have invaded the trough depression around 4 to 6 Ma and deposited 2 to 3 km of halite-rich evaporites of the Sedom Formation1. These evaporites form diapirs and subcrops along the Western Margin faults1 within the basin. Mount Sedom is an exposed salt diapir at the southwest corner of the Dead Sea. Fluviatile and lacustrine sediments of the Amora and Lisan Formations comprise 3 to 4 km of sediments that overlie the Sedom Formation and underlie the Dead Sea deposits, as shown in Figure 6.21. Figure 6.3 provides a simple schematic of the structural features for the Dead Sea area. The JBC Environmental Impact Assessment Report, 2012 includes a figure drawn by Powell [1988]16 that illustrates the generalized geological map of the JBC area and is provided in Figure 6.4.

6.2Local Geology

The Dead Sea is not only the lowest surface on earth but is also the saltiest natural lake on earth with an average salinity of 342 grams per kilogram (g/kg) as of 2011, which is 9.6 times as salty as the ocean17. The climate, geology, and location provide a setting that makes the Dead Sea a valuable large-scale natural resource for potash and bromine. When the Dead Sea was first formed, the volume was likely 4 to 5 times larger than the current volume2. Today, the Dead Sea waterbody has a surface area of 583 square kilometers (km2) and a brine volume of 110 cubic kilometers (km3)1.

Warren [2006]1 explains that the northern basin is the only permanent body of water (See Figure 6.1, Physiological Features Map). The southern basin is a saline pan and saline mudflat that would have been subaerially exposed, but the water level is maintained by artificial flooding with north basin brine and controlled evaporation for industrial salt extraction on the Israeli and Jordanian sides of the Dead Sea. Warren [2006]1 draws the various depositional settings and general geology surrounding the Dead Sea, including the saline mudflats and pans at the southern end of the sea, as depicted in Figure 6.5.

Evaporation greatly exceeds the inflow of water to the Dead Sea, especially since the mid-twentieth century, because of increased diversion and damming of the Jordan River for agricultural and domestic use. The Dead Sea has been receding approximately 1.1 to 1.25 m per year1. Warren [2006]1 described that in 400 years (from 2006), the Dead Sea will drop 80 m below its current sea level and the remaining brine will have approximately 380 grams per liter (g/L) of dissolved solids and a density of 1.27 kilograms per liter (kg/L). Simply, these rates suggest that the surface of the Dead Sea will drop approximately 1 m and, depending on the slope, the shoreline could travel 5 to 6.25m seaward over a span of 5 years. While action on falling sea level may be considered a risk to the rights of access to the resources and ultimately reserves, this is not considered likely to be a problem prior to expiry of the lease agreement in 2058.


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Figure 6.1: Physiological Features.


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Figure 6.2: (A) Plan View of the Dead Sea in Relation to the Western Boundary Fault and the Arava Fault and (B) Generalized Cross Section of the Dead Sea Lake Geology1.


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Figure 6.3: Main Regional Faults in the Area 18.


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Figure 6.4: Map of the Jordan Bromine Company Area and Its Generalized Geology, Including Faults 10,17.

The sea level generally rises slightly in winter by unpredictable, brief runoff and sudden flood events1. As the sea level continues to decrease, the brine/freshwater interface within the surrounding groundwater moves toward the sea19. The infiltration of less saline groundwater is causing the dissolution of localized rock salt in the ground, thus causing an increased occurrence of sinkholes. The Dead Sea level is expected to continue decreasing with the ongoing demand for fresh water within the area19. Chemical


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extraction by solar evaporation ponds in the southern basin also contributes to the drop in the sea level by artificially increasing the rate of evaporation19.

Figure 6.5: Depositional Settings of the Dead Sea1.

The Red Sea-Dead Sea Water Conveyance Study Program - Final Report19 states that water balance estimates for the Dead Sea vary wildly because of unknown amounts of water influx from underground streams, variable evaporation rates and an uncertain accumulation of salt collecting on the sea floor. The study also mentions that an evolution of the sea water occurs as the climate becomes warmer and the water becomes more saline and denser with time. Evaporation of the Dead Sea water slows as the water salinity increases1.

Until 1979, the Dead Sea waters were stratified, and water density increased with depth1. The decreased influx of fresh water from the Jordan River, evaporation, and increased influx of end brine from the southern evaporation ponds caused an increase in surface-water salinity and density, which led the deep waters to overturn, mix with the surface waters, and homogenize and oxidize the entire water column in 197920. After 1979, the Dead Sea became less stratified with periodic intermixing of layers (holomictic) and only periodically alters from holomictic to more rigidly stratified (meromictic) with episodes of higher-


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than-normal influx of fresh water into the basin1. During the Holocene era, overturn occurred periodically and is marked by a well-developed, coarse crystalline, deep-water halite.

The Dead Sea is supersaturated with halite (NaCl), and coarse crystalline halite has been rapidly accumulating at the bottom of the Dead Sea since the overturn in 19791. Fine-grained halite interbedded with gypsum layers is more common around the sea edge and shallow waters (less than 50 m depth)1. During the summer, sea waters become thermally stratified with the sun’s extra heat; the surface waters become warmer and the sea divides into two distinct layers 21. The warmer, surface layer also becomes saltier than the lower, cooler layer because of increased evaporation22. Winter is generally associated with supersaturated levels of NaCl 2.

6.3Property Geology and Mineralization

Supersaturated with halite, the Dead Sea has an annual negative water balance (i.e., the sea level drops), which is a result of the diversion of fresh water that would normally drain into the Dead Sea20. The water deficit by volume is greater than appears as the water level falls because of the coinciding salt precipitation on the sea floor. The water balance is complicated and not well understood because of the variations in freshwater influx, variable evaporation rates, and uncertain subsurface inflow. The evaporation rate of a brine surface decreases with the increase in the amount of dissolved salts and is not comparable to the same evaporation rate of a body of fresh water under the same conditions.

The Dead Sea is the world’s saltiest natural lake with a definite chemical stratification2. The Dead Sea brine solution contains high concentrations of ions compared to that of regular sea water and has an unusually high amount of magnesium and bromine and low amounts of carbonate and sulfate. Table 6-1 compares the average ion concentration of the Dead Sea with regular sea water.

The relative ionic composition of the brine changes through the years because of continual evaporation, ongoing massive salt deposition, and the reinjection of the dense end brines in the south. End-brine reinjection has a local effect on halite saturation and ion/cation chemistry near the southern end of the north basin. The change in brine chemistry generally changes the solubility of evaporitic salt and brine physical properties (i.e., saturation, heat capacity, and viscosity)23.

Wisniak [2002]2 reports that an estimated 900 MMt of bromine exists in the Dead Sea. The reason for the high levels of bromine found in the water is not well understood, but the salt brines are believed to have formed during the Tertiary period2. The evaporation ponds demonstrate the bromide-enrichment process that is theorized to have occurred many years ago and on a much larger scale. Residual brines are extremely rich in bromide. The feedbrine has a specific gravity of 1.24 and contains 5,000 parts per million (ppm) of bromine. After controlled evaporation occurs in the southern basin ponds following the precipitation of halite and carnallite, the residual brine has a specific gravity of 1.3412 and 8,760 ppm of bromine [JBC production reports].


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Table 6-1: Typical Concentration of Ions in the Dead Sea and Regular Sea Water Grams per Liter


Ions	In Dead Sea (g/L)	In Regular Seawater (g/L)
Cations
Sodium (Na+)	39	10.7
Magnesium (Mg2+)	39.2	1.27
Calcium (Ca2+)	17	0.42
Potassium (K+)	7	0.4
Anions
Chloride (Cl–)	208	19.4
Bromide (Br–)	5	0.07
Sulfate (SO2–)4	0.5	3.6
Total	315	33.68


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7EXPLORATION

Although typically conducted, no exploration was required to characterize the mineral deposit as the minerals are extracted from the Dead Sea, which has been extensively characterized. Typical chemistry of the Dead Sea brine is provided in Table 6-1.

Woods Ballard and Brice [1984]24 describe the geotechnical exploration work done for the design of the dike system necessary for the construction of APC’s evaporation ponds. This information assists in understanding the shallow geological conditions underlying the evaporation ponds and ancillary structures.

A limited site investigation program24 was carried out in 1966 when most of the southern basin of the Dead Sea was covered in up to 3 m of brine. A more detailed program, with a cost of £3 million, took place in 1977 when the brine level had receded from the southern basin, leaving only land-locked ponds in the central depression.

The very soft clays which overlay the area to form the flat foundation for the basins were deposited by wadis (streams) which discharge into the area from the wadi Araba and the eastern hills. The foundation clay is interspersed with layers of uncemented salts. These salts are formed during the modern depositional process, when the sea level has receded sufficiently to allow brine at the southern end to become concentrated to the point of precipitation. The wadis have also formed fans of boulders, gravels and sands where they exit from the escarpment and indent the eastern shoreline.

To undertake the site investigation program in 1977, major access problems had to be resolved. The very soft mud in the carnallite pond area would not support normal investigation equipment. Elsewhere brine pools of varying depth covered part of the surface of the central depression and were 10 m deep at the main intake location off the Lisan Peninsula in the Dead Sea.

A drilling rig was mounted on a 15 × 15 m Mackley Ace hover pontoon to allow drilling on the soft mud and over the sea. The unit was maneuvered into position by a Gemco amphibious transporter on land and by a motor launch in deep brine. The unit was serviced with small Nimbus hovercrafts which were also used for reconnaissance of the area. There was some difficulty in controlling the unit when it was being moved to new locations in windy conditions. In the areas of very soft mud, which precluded the use of the Gemco, anchors had to be laid by hand in the mud to enable the pontoon to be winched into position. It was possible to walk on these areas only with the aid of specially made ‘mud shoes’ produced on site from plywood boards.

Shallow pools of evaporating brines were formed in the central basin 7 km from the shoreline in which jagged reefs of hard salt crystals had formed, protruding up to 700 mm above the brine level. Neither the hover pontoon nor the hovercraft could be used in this particular area as the reefs ripped the hover skirts. Investigations of conditions in this area were carried out using a lightweight drilling rig mounted on the Gemco, with workforce and materials being ferried out by helicopter.

The investigations concentrated on solving two main problems: establishing the most economical design of dike on very soft mud and finding the best method of constructing a cut-off under part of the western perimeter dike for control of seepage through the uncemented salt layers.

The team carried out in situ vane tests and triaxial tests on undisturbed samples to give a preliminary indication of the strength of the mud. The inherent inaccuracy in using small vanes to determine large-scale strength criteria and the difficulty to obtain truly undisturbed samples led to the requirement for full-scale trial dikes. Three trial dikes were then constructed in various materials, with various cross sections, instrumented and loaded to failure.

In situ permeability tests were carried out in the salt and clay strata to establish design criteria for seepage control. To confirm the proposed diaphragm wall, trial cut-off trenches were formed 150 mm wide and 3 m deep in the rock salt using a chain-saw type cutter. A 2.5-mm-thick, medium-stiff high-


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density polyethylene impermeable membrane was inserted into the trench which was then filled with a self-setting mud.


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8SAMPLE PREPARATION, ANALYSES, AND SECURITY

The deposit (i.e., the Dead Sea) has been characterized based on ample information collected from multiple sources, including companies dedicated to extracting and processing brine as well as scientific institutions. Therefore, the various sampling and testing protocols and sample chain-of-custody documentation that are generally used to characterize the reserves/deposit are not included in this report.

JBC has its own internal lab facilities for testing with advanced technology and well trained staff. The lab complies with ISO 19000, 14001 and OHSAS 18001 certification requirements and follows industry best practices in terms of laboratory procedures. JBC has decided to further improve its lab by pursuing compliance with ISO 17025 requirements and this process is ongoing.

JBC’s analytical laboratory is managed by a team of experts, including a chemist, supervisors and technicians, all working around the clock in shifts, to maintain the integrity of the lab at all times.

JBC is an ongoing operation that has processed concentrated brine extracted from the Dead Sea for many years. Therefore, JBC has an extensive database of quality data that were obtained by APC and JBC. This data confirms the characteristics of the brine obtained from the Dead Sea (APC) and the Carnallite Pond C-7 (APC and JBC).

Chapter 10.0 discusses the sample preparation, analyses, and security of the brine samples used to test the quality of the brine.

It is the QP’s opinion that Albemarle’s laboratory facilities meet or exceed the industry standard requirements for such facilities and that the implemented practices for the collection and preparation of samples, as well as the methodology followed to carry out the analytical work (including the sample security protocols) are based on industry best practices and, therefore, are adequate for their intended purposes.


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9DATA VERIFICATION

Sampling and testing records from 2017 through 2021 were provided by JBC and were used as source material for the TRS. The JBC plant has been operating for approximately 20 years and the quality of the brine extracted from the Dead Sea by APC and the feedbrine coming from APC’s Carnallite Pond C-7 is continuously monitored and well understood. The typical density values, as well as the chemical composition of the brine, are well documented, and in the Qualified Person’s (QP’s) opinion, the quality data provided by JBC are adequate to understand the process and estimate mineral resources and reserves.

The data reviewed by the QP show a sampling and testing system in place that is comparable to the best management practices of the industry. The records contain detailed information on dates, times and the name of the operators who performed the sample-collection process. Documentation provided by JBC also shows appropriate chain-of-custody documentation of the samples and the standard analytical methods that were implemented for quality testing.


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10MINERAL PROCESSING AND METALLURGICAL TESTING

The methods used to test the quality of the brine before it reached the JBC plant is discussed in this chapter. Understanding the quality of the brine before it enters the plant is critical to ensure that the plant feed is consistent. The analytical procedures discussed herein are not typically used in the mining and exploration industry (e.g., geochemical assaying); however, the methods employed are sufficient for JBC to run their plant properly and efficiently. Site inspection was not possible because of COVID-19 travel restrictions; therefore, the sampling process has been described by JBC.

10.1Brine Sample Collection

The JBC bromine plants and the connection to APC’s Carnallite Pond C-7 were designed for the explicit purpose of gathering substantial quantities of brine for transport to the central bromine production facilities. Once at the facility, the bulk brine is processed to produce bromine. Concentration measurements of the bromide salts (hereafter referred to as bromides) are critical to the successful operation of the bromine plant. The brine consistency is critical for forecasting various bromine derivative sales and the overall health of the Albemarle/JBC bromine business.

Bromine samples from the JBC brine plant are taken in two strategic locations: (1) upstream of the bromine tower and (2) downstream of the bromine tower. Because of the nature of brine collection, the feedbrine (i.e., upstream brine) concentration of bromides remain relatively consistent; however, the concentration does vary and depends on weather/climate and APC’s process consistency. Feedbrine samples are therefore frequently taken to capture concentration changes and more effectively adjust downstream operating parameters.

Tailbrine (i.e., downstream brine) samples are also taken frequently to primarily ensure that existing parameters at the bromine tower are set correctly. JBC operators collect brine samples multiple times per day and as requested by plant management. The sampling method includes the following steps:

1.Travel to each feedbrine and/or tailbrine sampling area within the plant

2.Slowly open the sample valves to purge out collected debris or stagnant brine to ensure that the samples collected are representative of the actual flow

3.Collect approximately 1 liter of brine within the sample bottle (roughly filling to the bottle’s capacity)

4.Label the sample bottle with the date, time, and name of the operator who collected the sample. The label also indicates if the sample corresponds to feedbrine or tailbrine. Cap the bottle and transport to the on-site analytical laboratory for testing.

Because of the long-established operation of the JBC bromine plant, the samples collected at both feedbrine and tailbrine collection sites are only regularly tested for bromide salts. The composition of the feedbrine and tailbrine, in terms of additional salt content outside of the bromide salts, has been very consistent over the last 20 years of production and consists of magnesium, sodium, calcium, and potassium chlorides. Density measurements are not frequently taken based on the lack of density change in the brine over time. Samples are taken within the plant approximately every 2 to 4 hours to monitor process efficiency and allow operators to make adjustments to the bromine plant operations.

10.2Security

Samples are taken directly from the sampling point to the internal JBC quality control (QC) laboratory. Samples are verified by the QC laboratory technician and operator during delivery and tracked through an electronic sample monitoring system where samples are given a designated number and the results of analytical tests are posted. Samples are not sent to external laboratories for testing; however, some


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samples are sent to internal analytical laboratories at different Albemarle sites (primarily the Process Development Center in Baton Rouge, Louisiana) for various other tests that are immaterial to plant operations.

A check standard is run for each titration and if the test passes the actual sample is analyzed. If the sample fails, the instrumentation is recalibrated. The laboratory does not hold any internationally recognized certifications.

10.3Analytical Method

Halogen titration is the current process to measure bromine in brine. This method is widely used across the company for measuring bromine because of its simplicity and no complex machinery/analytical tools are required. The method involves use of different concentrations of chemicals for feedbrine and tailbrine. Firstly, a buffer solution is prepared by adding sodium fluoride and sodium dihydrogen phosphate in deionized water. Clorox bleach is then added, and the solution is heated on a hot plate for 15 minutes. Sodium formate is then added, after which the solution is heated for an additional 5 minutes and then cooled to room temperature. Potassium iodide and sulphuric acid is then added to the solution and then the solution is titrated with sodium thiosulfate until starch endpoint.

The QP has reviewed the analytical method as provided by JBC and the method appears to be reasonable and well-established.


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11MINERAL RESOURCE ESTIMATES

Estimating bromine resources from a nonconventional reservoir such as the Dead Sea presents many challenges. The elevation and the area and volume of this body of water are rapidly decreasing for the reasons explained in this report.

The decreasing water level in the Dead Sea has been of concern for many years and the concept of diverting seawater from the Mediterranean Sea or the Red Sea has been discussed in many publications. The principal objective of diverting seawater is to provide desalinated drinking water for the inhabitants of the surrounding areas of Palestinian Authority, Israel, and Jordan and to stop the decreasing water level of the Dead Sea. The desalination plant is proposed to produce fresh water using the Reverse Osmosis (RO) method.

Water mixing in the Dead Sea is slower because of low waves and wind compared to other waterbodies (e.g. seas and oceans). The Dead Sea is considered a stratified waterbody and is based on 44 available datasets on potential temperature and quasi-salinity. Traditionally, the density anomaly of the Dead Sea water from 1,000 kilograms per cubic meter (kg/m3) at 25°C was used as an indicator of water salinity25 and was called “quasi-salinity” and denoted as σ25 or SIGMA-25.

A study by Bashitialshaaer et al. [2011]26 was developed by the Department of Water Resources Engineering, Lund University in Sweden, to investigate methods for understanding the variations of water level and volume of the Dead Sea under various scenarios. The Lund University study26 developed two models for estimating changes in the Dead Sea level, surface area, and volume: (1) a single-layer (well-mixed) system and (2) a two-layer (stratified) system. The mathematical models used in the study were based on the Land-Ocean Interactions in the Coastal Zone (LOICZ) Biogeochemical Modeling Guidelines and have been validated by comparing the model performances with other modeling studies of the Dead Sea27. The models were first employed to describe the dynamic behavior of the Dead Sea using the data available in 1997 as the initial conditions and simulating the evolution over a 100-year period. Historical data from 1976 to 2006 were then used to compare with simulations obtained from the model. Although the Dead Sea is not in a steady-state condition, it was assumed to be close to steady state during the first year. Water and salt balances may have internal inputs and outputs but are only a concern in the two-layer approach.

The first model employed encompassed a single layer for which the water and salt mass balances were derived. Salinity variations and water discharged from the desalination plant were considered with and without the proposed project. The Dead Sea shows relatively strong vertical stratification that can be assumed to resemble a two-layer system (also called a stratified system)28.

Considering the significant differences in the salinities and densities of the input and output brine, as well as the Dead Sea itself, with respect to depth, a two-layer system was determined to provide a better description of the conditions than the single-layer system. The upper layer constitutes an average of approximately 10 percent of the total depth, and the rest of the lake constitutes a rather homogeneous lower layer. Values of volume, surface area, elevation, and cumulative levels of the Dead Sea for a 100-year period were predicted by the single-layer and two-layer models.

Compared to previous studies, the single-layer and two-layer models proved to be robust alternatives to the traditional water and salt balance techniques. These models allowed the water exchange to be successfully calculated through a relatively simple representation of a complex and dynamic system such as the Dead Sea.

Both analytical models were balanced using two approaches: water-mass balance and salt-mass balance. The single-layer model predicted 1.4 and 2.0 percent higher water levels than the two-layer model using the water-mass balance with and without RO discharge, respectively. The two-layer model yielded 3.7 and 4.0 percent higher values than the single-layer system using the salt-mass balance with and without RO discharge, respectively.

RESPEC opines that the two-layer model under the water-mass balance approach is a better representation of the Dead Sea environment and, therefore decided to use this model to predict present


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and future levels, areas, and volumes that are the bases for estimating resources. For this analysis, the current situation was assumed to be maintained, and the influence of a potential Red Sea to Dead Sea project was not considered. This model will be used to estimate the average water elevation, area, and volume at two critical points in time: 2021 (the effective date of this report) and 2058 (the end of APC’s concession), and correspond to the Years 25 and 62, respectively, of the 100-year model (with 1997 as the base year [Year 1]).

The JBC facility has a proven track record of commercial production and, therefore, the reliability of the economic forecast operation is high. From the technical point of view, the quality of the feed, the expected recoveries and other key factors are well understood, by virtue of many years of operation.

The capital and operational costs correspond to a Class 1 estimate and therefore are also significantly accurate (between -10% and +10%), which minimizes the potential impact of those elements on the prospect of economic recovery. Economic factors have also been discussed at length in various sections of this technical report and it is the QP’s opinion that they do not present any significant risk that could jeopardize the expected economic recovery of the operations. Moreover, it is the QP’s opinion that no additional studies are required.”

11.1Dead Sea Elevation

Among the several institutions in Jordan and Israel that constantly monitor the level of the Dead Sea, the Israel Oceanographic and Limnological Research, which publishes a level chart on its web page, is provided in Figure 11.1. As of late-2021, the reported average water level of the Dead Sea is 430 m below mean sea level (bmsl), which is consistent with the model’s forecast.

At the beginning of the last century, the water level was approximately 390 m bmsl with a surface area of 950 km2. In 1966, the Dead Sea covered an area of 940 km2 with 76 percent of the lake in the northern basin, and a total length of 76 km, and an average width of 14 km. The total volume of the water in the Dead Sea was estimated at 142 km3 with only 0.5 percent in the southern basin. At the end of 1997, the water level was 411 m bmsl and the surface area 640 km2,29. The surface area continues to decrease due to the high rate of evaporation and decreasing water inflow. The current volume of the Dead Sea is estimated at approximately 110.0 km3. Work undertaken by Ghatasheh et al. [2013] 18 presented in Table 11-1 shows historical water levels and surface areas for the time period of 1984 through 2012.

Figure 11.1 also shows the variations in the Dead Sea level30. Recorded level variations were compared with sea-level forecasts obtained from the selected simulation model and it was found that the selected two-layer model was highly accurate.

11.2Dead Sea Volume

The drop in the sea level in the late twentieth and early twenty-first centuries changed the physical appearance of the Dead Sea. Most noticeably, the peninsula of Al-Lisān gradually extended eastward until the sea’s northern and southern basins became separated by a strip of dry land. The southern basin was eventually subdivided into dozens of large evaporation pools (for extracting salt) and by the 21st century the basin had essentially ceased to be a natural body of water. The northern basin, which is effectively now the actual Dead Sea, largely retained its overall dimensions despite a great loss of water mainly because the shoreline plunged steeply downward from the surrounding landscape.


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Figure 11.1: Interannual Changes in the Dead Sea Total Vertical Stability and Sea Level 30.

The inflow from the Jordan River, with high waters occurring in winter and spring, once averaged approximately 1.3 billion cubic meters per year (bcm/yr). However, the subsequent diversions of the Jordan River’s waters reduced the river’s flow to a small fraction of the previous amount and became the primary cause for the drop in the Dead Sea’s water level. Four modest intermittent streams descend to the lake from Jordan to the east, through deep gorges: Al-ʿUẓaymī, Zarqāʾ Māʿīn, Al-Mawjib, and Al-Ḥasā. Several other wadis streams flow down spasmodically and briefly from the neighboring heights as well as from the depression of Wadi Al-ʿArabah. Thermal sulfur springs also feed the rivers. Evaporation in the summer and water inflow, especially in the winter and spring, once caused noticeable seasonal variations of 30 to 60 centimeters (cm) in the sea level, but those fluctuations have been overshadowed by the more-dramatic annual drops in the Dead Sea’s surface level.

Concern over the continued drop in the Dead Sea’s water level increased and prompted studies and a focus on conserving the Jordan River’s water resources. In addition to proposals for reducing the amount of river water diverted by Israel and Jordan, the two countries discussed proposals for canals that would bring additional water to the Dead Sea. One of the projects that received approval from both countries in 2015 involved constructing a canal northward from the Red Sea. The plan, which included desalinization and hydroelectric plants along the canal, would deliver large quantities of brine (a by-product of the desalinization process) to the lake. The project was met, however, with skepticism and opposition from environmentalists and other parties who questioned the potentially harmful effects of mixing water from the two sources.


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Table 11-1: Dead Sea Water Level and Surface Area 18


Year	Surface Area (km2)	Below Mean Sea Level (m)
1984	678.91	403.24
1985	675.46	404.13
1986	674.50	404.39
1987	670.87	405.36
1988	670.76	405.39
1989	663.21	407.50
1990	659.29	408.65
1991	658.32	408.94
1992	664.25	407.20
1993	552.64	407.56
1994	656.41	409.51
1995	653.26	410.48
1996	652.48	410.72
1997	661.55	410.98
1998	650.63	411.30
1999	646.88	412.50
2000	645.07	413.08
2001	643.92	413.46
2002	641.04	414.42
2003	641.85	414.15
2004	640.44	414.62
2005	635.85	415.85
2006	635.13	416.10
2007	633.00	417.19
2008	631.28	417.80
2009	628.02	418.98
2010	626.44	419.56
2011	623.26	420.74
2012	619.90	422.01

The area of the Dead Sea surface at the end of the 1950s was approximately 1,000 km2, of which approximately 757 km2 were located in the northern portion and 240 km2 in the southern portion. Several studies state that the water level of the Dead Sea is dropping by an average of 0.9 m per year, which represents an annual water loss of approximately 600 MCM. The current volume of the Dead Sea is estimated to be approximately 110 km3.

11.3Dead Sea Salinity

The data collected by RESPEC as well as relevant forecasts indicate that the Dead Sea quasi-salinity (Sigma 25) is increasing, as illustrated in Figure 11.2.


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Figure 11.2: Quasi-Salinity (Sigma 25) of the Dead Sea. 30.

11.4Simulation Model

The selected two-layer model takes into account the significant differences in the salinities and densities of the input and output with respect to depth and, therefore, provides a better description of the conditions of the Dead Sea. A comparison of historical water levels and areas with the model forecasts shows that the selected model is reliable and can be used to predict future water levels. The main components considered in the two-layer model and their interaction are illustrated in Figure 11.3. Table 11-2 summarizes the predicted level, area, and volume of the Dead Sea based on the selected two-layer model.

As mentioned, the two-layer model was developed to forecast the variations under both the baseline conditions (current situation) and the Red Sea-to-Dead Sea project implementation.

RESPEC deemed that the best fit between the model forecast and the historical data (between 1997 and 2021) was obtained from the water-mass balance approach. The Year 1997 represents the baseline case (Year 1) and 2021 corresponds to Year 25 of the model. The end of APC’s concession will take place in 2058, which corresponds to Year 62.


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Figure 11.3: Schematic of the Mass Balance for the Dead Sea Using a Two-Layer System.

Table 11-2: Dead Sea Level, Area, and Volume as Predicted by a Two-Layer Model Based on the Water-Mass Balance Approach, Baseline year, 1997


Water-Mass Balance — 2-Layer Model (No RO)
Year (cycle)	Year (date)	Level (m bmsl)	Area (km2)	Volume (km3)
1	1997	–411.00	640.00	131.00
25	2021	–430.30	580.22	109.54
30	2026	–433.41	570.95	105.06
60	2056	–458.56	492.30	78.23
62	2058	–462.44	480.09	76.44
90	2086	–488.58	398.43	51.39

11.5Bromide Concentration

Bromide ion concentration is well-documented in the reviewed references and records provided by APC. The bromide concentration in the Dead Sea brine averages approximately 5,000 ppm, as reported by APC. The bromide concentration considered as the cutoff grade for resources estimation is 1,000 ppm.

11.6Resource Estimation

Using on the values obtained from the two-layer model and the reported bromide concentration, a summary of the Dead Sea bromide ion resources is provided in Table 11-3. Because the waters of the


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Dead Sea and the resources contained within are shared by the Hashemite Kingdom of Jordan and the State of Israel, the waters can be allocated proportionally to the surface area controlled by each country. The Dead Sea areas corresponding to Jordan, Israel, and the West Bank (under Israeli control) are depicted in Figure 11.4.

Table 11-3: Dead Sea Bromide Ion Resources


Year	Elevation (m)	Area (km2)	Volume (km3)	Brine Density (g/cm3)	Brine Mass (MMt)	Bromide Concentration (ppm)	Bromide Ion Mass (MMt)
2021	-430.30	580.22	109.54	1.2400	135,824	5,000.00	679.10
2058	–462.44	480.09	76.44	1.2662	96.790	5,106.00	494.21

Figure 11.4: Schematization of the Water Mass Balance for the Dead Sea Using a Two-Layer System.

According to current GIS imagery and the official location of the international border between Israel and Jordan, the approximate 580.22 km2 of surface area of the Dead Sea can be allocated as indicated in Table 11-4.


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Table 11-4: Dead Sea Surface Area Allocation (as of 2020)


Jurisdictions	Area (km2)	Allocation (%)
Israel and West Bank	277.01	47.47
Jordan	303.21	52.26
Total	580.22	100.00

The cut-off grade is an industry-accepted standard expression used to determine what part of a mineral deposit can be considered a mineral resource. It is the grade at which the cost of mining and processing the ore is equal to the desired selling price of the commodity extracted from the ore.

The considered sales price ranges between USD 4,565 and USD 8,300 per tonne and the operating cost ranges between USD 355 and USD 532 per tonne, as detailed in Section 18 of this report.

The cut-off grade of the Albemarle bromine operations has been estimated to be at 1,000 ppm. The bromide ion concentration in the brine extracted from the Dead Sea significantly exceeds the selected cut-off grade.

Based on the above allocation, an estimated 52.26 percent of the brine resources identified in the Dead Sea are controlled by Jordan (as of the effective date of this report) and, therefore, correspond to APC under the terms of its concession. Consequently, as of December 2021, an estimated 135,824 MMt of brine measured resources with an average bromine ion concentration of 5,000 ppm, and a cut-off grade of 1,000 ppm (135,824 MMt × 52.26 percent = 70,982 MMt) is controlled by JBC. The measured resources of bromide ion attributable to Albemarle’s 50% interest in its JBC joint venture is estimated to be approximately 177.5 MMt. From these large resources, JBC is extracting approximately 1 percent of the bromine available. These estimates include Reserves. For perspective purposes, these estimates are a very large resource of which APC is accessing only a small portion. (as of the effective date of this report) and, therefore, correspond to APC under the terms of its concession. Consequently, as of 2021, an estimated 354.90 MMt of bromide ion resources (679.10 MMt ×52.26 percent) is controlled by JBC. This estimate includes Reserves. For perspective purposes, this estimate is a very large resource of which APC is accessing only a small portion—APC is extracting approximately 1 percent of the bromine available in the Dead Sea.


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12MINERAL RESERVES ESTIMATES

Reserve estimates presented in this report are consistent with the definition in SEC S-K 1300:

Mineral reserve is an estimate of tonnage and grade or quality of indicated and measured mineral resources that, in the opinion of the qualified person, can be the basis of an economically viable project. More specifically, it is the economically mineable part of a measured or indicated mineral resource, which includes diluting materials and allowances for losses that may occur when the material is mined or extracted.

Even though 354.90 MMt of bromide ion with a cutoff grade of 1,000 ppm have been identified as the measured resources currently available to JBC, only the portion of those resources that can be economically extracted and processed with JBC’s current capacity and within the term of the concession agreement constitute proven reserves.

Based on the information supplied by JBC/APC and independently verified by RESPEC, APC has a present and forecast brine extraction capacity of 336.4 MCM of sea water from APC’s PS3 pumping station. The facility will eventually be replaced by the new PS4 pumping station and will have a similar capacity. As described in Chapter 13.0 of this report, the brine is transferred through a series of evaporation ponds until reaching pond C-7, where another pumping station with a capacity equivalent to 24 percent of the PS3 pumping station (as indicated in APC and JBC production reports), pumps brine to supply the JBC Area 1 and Petra Bromine plants and also to the Manaseer Magnesia Company facility. Therefore, the maximum pumping capacity from pond C-7 is approximately 84.10 MCM per year.

APC/JBC have reported that the density of the brine pumped from pond C-7 is 1.3478 grams per cubic centimeter (g/cm3) and the weighted average of the bromide ion concentration of the feedbrine from pond C-7 is 8,890 ppm, based on actual operational records provided by JBC; thus, approximately 0.97 MMt per year of bromine ion are pumped into the channel that feeds to JBC and MMC. The JBC plant’s processing capacity at 16.7 MMt per year represents only a fraction of the feed tonnage available and, therefore, both operations have sufficient capacity for brine processing.

Table 12-1 provides JBC (Area 1 and Petra Bromine Plants) Brine Processing and Bromine Production Records (2019-2021).

Table 12-1: Jordan Bromine Company (Area 1 and Petra) Brine Processing and Bromine Production Records (2019-2021)


Data (Unit)	Area 1	Petra	Total
Feedbrine Flow (tonnes)
Total (2019-2021)	25,581,614.85	20,052,498.16	45,634,113.01
Annual Average	8,527,204.95	6,684,166.05	15,211,371.00

Br2 Product (tonnes)
Total (2019-2021)	185,345.48	154,635.01	341,145
Annual Average	61,781.83	51,545.00	113,715.00

2019 was the first year that both the Area 1 and Petra Bromine plants operated at their normal capacity after an expansion of the Petra Bromine facility and a plant stoppage of the Area 1 facility in 2018. The plants jointly received approximately 15.24 MMt of brine. A total of 113,000 tonnes of bromine was produced in 2019. In 2020, the plants received a total of 14.66 MMt of brine and produced 113,000 tonnes of bromine and in 2021 the total feed was approximately 15.74 MMt of feedbrine and the reported bromine production was 115,165 tonnes. The annual bromine production during the period 2019-2021 was 113,700 tonnes per year.


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The original production forecast prepared by JBC assumes a slight improvement in the combined production capacity of the bromine plants, to reach a target of annual production of 123,000 tonnes per year in 2025. The QP has assumed and believes it is reasonable that the 2025 production capacity can be maintained through 2058. The overall average production for the time period of 2022 through 2058 is 132,000 tonnes per year of elemental bromine.

The considered sales price ranges between USD 4,565 and USD 8,300 per tonne and the operating cost ranges between USD 355 and USD 532 per tonne, as detailed in Section 18 of this report.

The cut-off grade of the Albemarle bromine operations has been estimated to be at 1,000 ppm. The bromide ion concentration in the brine extracted from pond C-7, which feeds the bromine plants, significantly exceeds the selected cut-off grade.

The reserves are constrained by plant capacity and the duration of the concession. Consequently, as of December 2021, an estimated 17.66 MMt of brine proven reserves with an average grade of 7,476 ppm, and a cut-off grade of 1,000 ppm are controlled and will be processed by JBC. This is equivalent to 4.89 MMt of contained elemental bromine. The proven reserves attributable to Albemarle’s 50% interest in its JBC joint venture are estimated to be approximately 2.45 MMt of elemental bromine. This reserve estimate represents only a fraction of the total resource contained in the Dead Sea and accessible by APC/JBC and therefore, the estimate provides reasonable assurance that the project will not be affected by shortages of raw material over its life.

Being a mature project with significant historical production information, the reliability of the modifying factors for JBC are considerably high and therefore the risks associated with those modifying factors are relatively low.

It is the QP’s opinion that the material factors that could cause actual results to differ materially from the conclusions, estimates, designs, forecasts or projections, including recovery factors, processing assumptions, cut off grades, etc., are well understood and, due to the nature of the deposit and the established extraction and processing operations, they are unlikely to significantly impact the mineral reserve estimates.


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13MINING METHOD

The mining method described summarizes the necessary activities to extract water from the Dead Sea and extract Bromine.

13.1Brine Extraction Method

The chemical contents of the Dead Sea’s brine (average density of 1.24 grams per cubic centimeter [g/cc]) hold a unique collection of salt minerals such as sodium chloride, potassium chloride, magnesium chloride, calcium chloride, and magnesium bromide. The low rainfall (70 mm per year), low humidity (average 45 percent) and high temperatures in the Dead Sea area provide ideal conditions for recovering potash from the brine by solar evaporation. The average concentrations of the ions (grams per liter [g/l]) in the Dead Sea are provided in Table 13-1.

Table 13-1: Ion Concentration in Dead Sea Water 31


Ions			Concentration (g/l)
Cations
Sodium (Na+)			39
Magnesium (Mg2+)			39.2
Calcium (Ca2+)			17
Potassium (K+)			7
Anions
Chloride (Cl–)			208
Bromide (Br–)			5
Sulfate (SO42–)			0.5
Total			315.7

JBC obtains feedbrine from APC’s pond C-7 (i.e., carnallite pond) and this supply is intimately linked to APC’s operations.

The principle of APC’s process is that as evaporation takes place, the specific gravity of the brine increases until the constituent salts crystallize and progressively begin to precipitate. The brine concentrates in the initial evaporation pond (also known as a salt pan) until reaching a specific gravity of 1.26, when the sodium chloride (common salt) crystallizes and precipitates to the bottom of the pond at the rate of approximately 250 mm per year thickness in a pond with a brine depth of 1 to 2 m.

The brine is then transferred to other ponds (pre-carnallite ponds) where specific gravity is increased gradually to 1.31, and most of the sodium chloride has been removed through precipitation. At the specific gravity of 1.31, carnallite begins to crystallize and precipitate at the rate of approximately 400 mm/year, which takes place in pond C 7. The carnallite is then harvested by wet dredging from the pond bottom, and the dredged salts are pumped in a slurry to a processing plant where the potassium chloride is separated from the magnesium chloride.

The process through the evaporation ponds is continuous and a part of the final effluent from the carnallite ponds is sent to the JBC and MMC plants. The other part of the effluent is returned to the Dead Sea. A schematic illustration of the process sequence is provided in Figure 13.1.


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Figure 13.1: Process Sequence Schematic.

The capacity of potash production is largely determined by the extent of the flat areas available for forming evaporation ponds. The Dead Sea, which provides the sources of the chemicals, is in two areas: northern and southern basins.

The total area of the evaporation ponds was determined from the shape and gradient of the flat southern basin. The layout of the schematic within this area was determined by the process design, location of the brine source, harvesting limitations, and the need to route the effluent and flood water safely from the surrounding hills to the Dead Sea.

A 500-m-wide flood channel has been built between the western perimeter dike of the project and the adjacent Dead Sea Works dike in Israel to permit 1,000-year probability floods, calculated to be 2,900 cubic meters per second (m3/s) to be routed to the Dead Sea without damaging the potash works. The solar evaporation system is shown in Figure 13.2.

The Dead Sea brine pumping station has an installed capacity of 16,000 m3 per hour per pump. The station is equipped with four pumps. Maximum annual capacity is 140.16 MCM per pump which based on operation at 80 percent availability and 75 percent utilization provides a brine volume of 336.4 MCM per year supply capacity to the APC facilities. This capacity is supported by the actual pumping records supplied by JBC and reviewed by the QP.

The brine that feeds the bromine and magnesium plants is extracted from pond C-7 through a pumping station with a capacity of approximately 84.1 MCM per year. The location of the Pond C-7 pumping station is shown in Figure 13.5.

13.2New Pumping Station

APC intends to build a New Main Brine Intake Pumping Station at the southern end of the Dead Sea approximately 35 km north of the APC plant located at Ghor Al-Safi, 130 km South of Amman. This new Pumping Station (PS4) will replace the existing Pumping Station 3 (PS3). Figure 13.3 shows the location of brine pumping stations including former Pump Stations 1 and 2. Figure 13.4 depicts the existing PS3 and proposed location of PS4 pumping stations.


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Figure 13.2: Solar Evaporation and Production Plant Map.


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Figure 13.3: Location of the Dead Sea Brine Pumping Station Relative to the APC and JBC Plants.


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Figure 13.4: Proposed Location for the New Pumping Station Relative to the Existing Pumping Station PS3.


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Figure 13.5: Pond C-7 Feedbrine Pumping Station (for Bromine and Magnesium Plants).


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13.3Life of Mine Production Schedule

The following table summarizes the life of mine production schedule of the project

Table 13‑2: Life of Mine Production schedule


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14PROCESSING AND RECOVERY METHODS

JBC receives feedbrine from APC’s pond C-7. The feedbrine is conveyed to the Area 1 and Petra bromine plants within the JBC facility through an open channel. Elemental bromine is produced at the JBC plants through a series of chemical processes described in this chapter.

14.1Mineral Recovery Process Walkthrough

Brine from pond C-7 at APC is pumped to two, parallel bromine production trains for Area 1 and Petra with no major differences in the equipment or brine throughput of either; therefore, the Area 1 train will be described. The Petra train is essentially a duplicate of the Area 1 mineral recovery train, which is displayed in Figure 14.1

Figure 14.1: Area 1 and Petra Mineral Recovery Trains.

The brine is fed to a bank that consists of a static mixer and a heat exchanger. Different chlorine sources are used to feed both bromine plants, one which derives in a vaporized state from isotanks to the Petra plant and the other provided from an on-site Chlor-Alkali plant to the Area 1 bromine plant. Chlorine is fed before the heat exchanger and uses steam to continue to heat the brine/chlorine mixture. The mixture is then fed to the static mixer. The chlorine feed in this part of the process is designed to react a significant portion of the bromine in the feed as well as continue to heat the brine/chlorine/bromine stream before it reaches the bromine distillation tower. The combined brine stream, after the chlorine addition and mixing, enters the bromine distillation tower at approximately 120°C.

The brine enters the tower through the top and is fed to a distributor tray and then fed downwards. The brine mixes with the bromine vapor exiting the recovery section and the bromine saturates the incoming scrubber brine. Bromine that is not absorbed through the scrubber brine exits the tower toward the downstream separation and purification. The bromine-saturated scrubber brine re-enters the recovery section where the bromine vapor is revaporized for continued removal.

The bromide-depleted brine (i.e., tailbrine) exits out of the bromine distillation tower through the bottom and is fed to two pumps.

The tailbrine is mixed with a strong base to neutralize any remaining acid, bromine, or chlorine. The neutralized tailbrine is then pumped to a storage pond for cooling and eventual “discharge” into the Truce Canal that is recycled back to the APC processing plant.


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The vaporized bromine exits the bromine distillation tower with a significant amount of water. This vapor stream is sent to a titanium heat exchanger that condenses the bromine and water vapor to liquid vapor using cooling water on the shell side. Any non-condensed acid or bromine vapors from the heat exchanger are sent to a scrubbing unit. A small stream of feedbrine is fed to the top of the scrubber to absorb any gaseous acid or bromine from the condenser and then recycled back to the tower.

The wet bromine is fed to a glass-lined crude bromine storage drum that acts as an intermediate hold-up before downstream purification.

The tailbrine stream, after stripped of bromine, is cooled and the pH is neutralized with caustic soda before discharging the brine to the Truce Canal. The tailbrine flow rate from the combined plants, Area 1 and Petra, is estimated to be approximately 1,700 m3 per hour, as reported by JBC.


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15INFRASTRUCTURE

15.1Roads and Rail

JBC is approximately 130 km south-southwest from Amman, and 40 km from the city of Al-Karak. The Jordan Valley Highway/Route 65 is a major highway that runs from the northwest region of Jordan, from North Shuna, along the western edge of Jordan and south to Aqaba and the Port of Aqaba. This highway is the primary access method for supplies and personnel to JBC. The Port of Aqaba is the main entry point for supplies and equipment for JBC, where shipping containers imported on ships are offloaded to trucks and transported to JBC by the Jordan Valley Highway/Route 65. Aqaba is approximately 205 km south of JBC. Major international airports can be readily accessed either at Amman or Aqaba.

Jordan’s railway transport line is operated by the Hijazi Jordan Railway and the Aqaba Railway Corporation (Al Rawabi Environment & Energy Consultancies). The line runs north-south through Jordan and is not used to transport JBC employees and/or product.

15.2Port Facilities

Jordan Bromine Company ships caustic potash (KOH), NaBr, and CaBr in bulk through a storage terminal in Aqaba. The terminal has storage tanks as well as pumps and piping for loading these products onto ships. JBC is using two sites at Aqaba:

•Aqaba Port

•JBC Terminal: A storage site in the free zone industrial area, to the west of Aqaba Power Station, approximately 1.5 km east of the Oil Terminal. Liquid products are stored at this site before they are exported through the Oil Terminal.

JBC’s main activities at Aqaba are raw material/product storing, importing, and exporting. Materials that JBC handles at Aqaba Port and JBC’s Terminal sites are shown in Table 15-1 and Table 15-2, respectively.

Table 15-1: Materials Handled by JBC at Aqaba Port and JBC Terminal


Material			Status
Hydrogen peroxide solution (50%)			Importing
Ethyl Alcohol (96%)			Importing
BPA (Bisphenol A) – powder			Importing
Bromine			Exporting
Hydrobromic Acid solution (48%)			Exporting
Ethyl Bromide			Exporting
TBBPA (Tetrabromo Bisphenol A) – powder			Exporting

JBC Terminal contains storage tanks and pumps for receiving and unloading products (calcium bromine [CaBr2], NaBr, KOH 50 percent, and NaOH 50 percent) from the Ghor Al-Safi site. The products are sent and received to/from the JBC Terminal and Ghor Al-Safi sites using road tankers (i.e., trucks) and iso-tanks. The operation is controlled by the JBC Terminal supervisor in addition to four operators. The JBC Terminal site consists of aboveground tanks sitting on reinforced concrete bases. A water storage tank is also used for flushing the pipes that are used for loading ocean going vessels and for all water needs on the site.


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Table 15-2: Materials Stored at Jordan Bromine Company Terminal


Material			Status
Calcium Bromide solution (55%)			Storage and Exporting
Sodium Bromide solution (45%)			Storage and Exporting
Potassium Hydroxide solution (50%)			Storage and Exporting
Sodium Hydroxide solution (50%)			Storage and Exporting

Nitrogen storage and vaporizer provides for the blanketing of each of the product storage tanks to maintain the products specifications and prevent absorbing carbon dioxide (CO2) from the atmosphere that will lead to formation of carbonates and affect the pH of the product. The nitrogen is also used for purging the shipping lines after loading.

The products stored at the JBC Terminal are sold to external customers directly and transported by ocean-going vessels. When a vessel is loaded, two transfer lines (950 m long each) that extend from the JBC Terminal toward the Oil Terminal are used to deliver the product through hoses that are extended from the end of the lines at the terminal to the vessel.

After loading the vessel, the lines and hoses are flushed with water and then nitrogen is used to purge the hoses and loading pipelines. A nitrogen blanket is sometimes needed for vessels that are made of stainless steel when the loaded materials are CaBr2 or NaBr.

All safety standards followed in the Aqaba site are the same as those followed at the Ghor Al-Safi site as per safety procedures. These safety standards follow the same company policy and targets. Personal protective equipment (PPE) is worn by all employees at the sites.

An evaporation pond collects the waste streams from pipe flushing, housekeeping, and other activities and is operated on the basis of natural evaporation with zero discharge coming from the pond. The estimated waste streams resulting from the plant’s housekeeping and flushing of loading lines are approximately 120 (m3 per month). The evaporation pond capacity is approximately 1,800 m3 and is lined to protect the groundwater against infiltration and fenced to prevent trespassers.

The collected deposits (salts) from the pond are periodically removed and disposed of in a proper landfiII in full compliance with ASEZA environmental directorate.

15.3Plant Facilities

Infrastructure and facilities to support the operation of the bromine production plant at the Ghor Al-Safi site is contained in an approximately 33-ha area.

15.3.1Water Supply

Fresh water is supplied from the Mujib River, a river that originates from the Mujib Reservoir, which is a man-made reservoir created in 1987 by the Royal Society for the Conservation of Nature. The Mujib River flows west through the Wadi Mujib Canyon and into the Dead Sea. Approximately 1.0 to 1.2 million cubic meters of water is used annually.

JBC has a contract for the water rights to the Mujib Reservoir, which is for the right to access 1.8 million m3 of water per year. The water from the Mujib Reservoir is processed through a series of filtration units before being stored in a 250 m3, carbon-steel tank. From this tank, the water is distributed to the various downstream users including cooling water, potable water, and reverse osmosis water.


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15.3.2Power Supply

Electricity is generated through the NEPCO and distributed directly to JBC by EDCO, a company owned and operated by Kingdom Electricity Company. Kingdom Electricity Company is one of the preeminent holding companies in Jordan that invests in energy generation and distribution companies/utilities.

The site load is below principal tariff level (< 22 MW). There are six substations on-site that are equipped with ABB switchgear and MCCs. The main transformer is a 33 kilovolt (KV)/11KV with 10.0/12.5 megavolt amperes (MVA) ONAN/ONAF rating. Nine additional stepdown transformers of different ratings provide site power at 420 volts (V).. Concerning stability and outages by NEPCO/EDCO, most outages noted just voltage dips or spikes that trip the plant breaker and happen for a few seconds during winter.

Electrical blackout occurred on May 21, 2021. This blackout was the first one since 2003. Electrical infrastructure has improved significantly, but there are still some risks prevalent.

15.3.3Brine Supply

Brine is supplied to the JBC plant area by pipeline from APC’s pond C-7. Vertical pumps extract brine from pond C-7 with additional centrifugal pumps feeding the brine to the JBC plant site. Centrifugal pumps return the tailbrine from the bromine recovery tower to the Truce Canal through pipeline.

15.3.4Waste-Steam Management

Downstream from the heat exchanger bank, the tailbrine is mixed with caustic soda to neutralize any remaining acid, bromine, or chlorine. The tail brine stream is neutralized by caustic soda before being discharged to the Truce Canal and then finally to the Dead Sea.


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16MARKET STUDIES

16.1Bromine Market Overview

As reported by Technavio [2021]32, a market research company, the global bromine market is expected to grow steadily at a Compound Annual Growth Rate (CAGR) of around 2.83 percent during 2021-2025 the bromine market has the potential to grow by USD 628.09 million. One major reason for this trend is the increased demand for plastics. Flame-retardant chemicals use bromine to develop fire resistance. Plastics are widely used in packaging, construction, electrical and electronics items, automotive, and many other industries. The increasing demand for plastics across various end-user industries is driving the demand for flame-retardant chemicals that in turn, will propel the bromine market.

Another trend that is responsible for a growing bromine market forecast is the growth in bromine and bromine derivatives used as mercury-reducing agents. Bromine derivatives are used in reducing mercury emissions from coal combustion in coal-fired power plants. Mercury emissions in the environment is a major concern for public health. The rising health concern along with stringent government regulations may increase global bromine market demand. Technavio [2021]32 also reports that the markets for specialty chemicals such as fluorochemicals and pyridine are expected to grow at a CAGR of around 5 to 7 percent during 2021-2025. The increased use of specialty chemicals in various end-use industries such as oil and gas, automobile, pharmaceuticals, and construction will also drive the demand for bromine.

16.2Major Producers

The major producers of elemental bromine in the world are Israel, Jordan, China, and the United States, as shown in Table 16-1. The bromine production from the United States is withheld to avoid disclosing company proprietary data. The world total values exclude the bromine produced in the United States.

Table 16-1: Bromine Production in Metric Tons by Leading Countries (2015-2020) 33


Country	2015 (MMt)	2016 (MMt)	2017 (MMt)	2018 (MMt)	2019 (MMt)	2020(a)
Israel	116,000	162,000	180,000	175,000	180,000	180,000
Jordan	100,000	100,000	100,000	100,000	150,000	150,000
China	100,000	57,600	81,700	60,000	64,000	63,000
Japan	20,000	20,000	20,000	20,000	20,000	20,000
Ukraine	3,500	3,500	4,900	4,500	4,500	4,500
India	1,700	1,700	1,700	2,300	10,000	10,000
Turkmenistan	500	500	—	—	—	—
United States	W	W	W	W	W	W
World Total (Rounded)	342,000	345,000	388,000	362,000	429,000	430,000

(a) estimated

W = withheld.

The prominent players in the global bromine market are Israel Chemicals Limited (Israel), Albemarle Corporation (United States), Chemtura Corporation (United States), Tosoh Corporation (Japan),

Tata Chemicals Limited (India), Gulf Resources Inc. (China), TETRA Technologies, Inc. (United States), Hindustan Salts Limited (India), Honeywell International Inc. (United States), and Perekop Bromine (Republic of Crimea). The production from the major global bromine producers is also provided in Table 16-1.


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16.3Major Markets

The global bromine market is dominated by manufacturers who have an extensive geographical presence with massive production facilities, all around the world. Competition among the major players is mostly based on technological innovation, price, and product quality.

According to a report by Market Research Future [2020]34, which forecasts the global bromine market until 2023, the market is divided into five regions: Latin America, the Middle East and Africa, Asia Pacific, North America, and Europe. Among these, Market Research Future [2020]34 predicts that Asia would be the fastest-growing region for bromine consumption because of a growing population and increasing purchasing power in the developing nations. The growth of agriculture and automobile industries in countries such as China and India will also drive the increasing demand for bromine. North America will remain a dominant market, and developed industries such as cosmetics, automobile, and pharmaceuticals will affect the demand for bromine. The European region is expected to experience a moderate growth that will be driven by the cosmetic and automobile industries. The growing oil-and-gas drilling activities in Russia will also contribute to the growth of the bromine market.

16.4Bromine Price Trend

The price of bromine gradually increased during the period 2014-2021. The price in January 2014 was approximately $2,800 per tonne and in January 2021 it had increased to approximately $5,200 per tonne.

Because the market for bromine is expected to grow and oversupply is not foreseen, the price of bromine is expected to stay strong in the near future.


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Figure 16.1 illustrates the behavior of bromine prices in the period January 2014-December 2021.

Figure 16.1: Bromine Price Trend as per China Petroleum and Chemical Industry Federation (Price is in US$ )35

16.5Bromine Applications

JBC produces a variety of substances from bromine (www.jordanbromine.com). The specific derivatives produced are not discussed in detail in this technical report for proprietary reasons. The following list illustrate the ways that elemental bromine or bromine derivatives are used in a variety of products:

•Flame Retardants: Bromine is very efficient as a constituent element when used in producing flame retardants; therefore, only a small amount is needed to achieve fire resistance.

•Biocides: Bromine reacts with other substances in water to form bromine-containing substances that are disinfectants and odorless.

•Pharmaceuticals: Bromide ions have the ability to decrease the sensitivity of the central nervous system, which makes them effective for use as sedatives, anti-epileptics, and tranquillizers.

•Mercury Emission Reduction: Bromine-based products are used to reduce mercury emissions from coal-fired power plants.

•Energy Storage: Bromine-based storage technologies are a highly efficient and cost-effective electro-chemical energy storage solution that provides a range of options to successfully manage energy from renewable sources, minimize energy loss, reduce overall energy use and cost, and safeguard supply.


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•Water Treatment: Bromine-based products are ideal solutions for water-treatment applications because of bromine’s ability to kill harmful contaminants.

•Oil-Drilling Fluids: Bromine is used in clear brines to increase the efficiency and productivity of oil-and-gas wells.


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17ENVIRONMENTAL STUDIES, PERMITTING AND PLANS, NEGOTIATIONS, OR AGREEMENTS WITH LOCAL INDIVIDUALS OR GROUPS

17.1Environmental Studies

JBC has conducted environmental impact studies in compliance with Jordanian regulations. The environmental impact studies are accessible through the Multilateral Investment Guarantee Agency (MIGA) website (www.miga.org) and are part of the public domain.

For the recent JBC capacity expansion, including the construction of the Petra Bromine plant and the Aqaba storage zone, JBC prepared environmental studies under international standards as part of the process to obtain financing from multilateral entities such as MIGA, which is a member of the World Bank Group.

These studies evaluated all key environmental aspects such as air quality, noise levels, water resources, biodiversity, socioeconomic conditions, archaeology, and traffic studies.

17.2Environmental Compliance

17.2.1Compliance With National Standards

JBC complies with national regulations including the Environment Protection Law (No. 52/2006), Public Health Law (No. 47/2008), Civil Defense Law (No. 18/1999) and Labor Law (No. 8/1996). JBC also meets or exceeds the Occupational Safety and Health Administration (OSHA) and National Fire Protection (NFPA) international regulations.

17.2.2Compliance With International Standards

JBC is the first company of its kind in Jordan to become an authorized exporter to Europe and has been certified for International Organization of Standards (ISO) 9001, ISO14001 and the Voluntary Emissions Control Action Program (VECAP). The VECAP is a global chemical management program based on a Code of Best Practice for handling and using brominated flame retardants.

JBC’s environmental program has been ISO 14001 certified by Lloyd’s Register since 2007 and further enhanced through the adoption of the integrated management system for quality (IS0 9001: 2015, OHSASL800L, 2007, ISO/4001:2015) certifications received in 2018. Audits of the environmental program area are conducted on a monthly basis by JBC management, and regular corporate audits are conducted by Albemarle Health, Safety and Environmental staff.

All JBC employees receive awareness training on the primary environmental procedures (e.g., waste management), ISO 14001 procedures, and the VECAP program. JBC’s operators are trained and certified to operate equipment that is critical to the environment, such as scrubbers and boilers. All employees handling waste materials are trained and certified on the specific handling procedures.

JBC has implemented multifaceted programs to reduce water consumption. JBC utilizes water recycling, and in 2011 it implemented a program which achieved a 15 percent reduction in freshwater consumption (~ 30 m3 / hr). JBC’s bromine production site in Safi has extensive water management and reduction programs in place and by applying a process heat integration and by operating at higher concentrations in certain process streams, it has managed to reduce the use of freshwater at its cooling towers by 2.6m3/hr of fresh water.

In 2020, the water reused as part of the wastewater treatment was 77,000m3, and in 2021 it is estimated to have reached 90,000m3.


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17.2.3Environmental Monitoring

JBC has programs in place for monitoring noise and emissions to air and water. JBC also has a waste-management program that includes procedures for storage, handling, and disposing municipal, organic-containing, non-hazardous, and hazardous waste. A water-reduction program is also part of JBC’s monitoring program.

An industrial hygiene program that is designed to ensure that employees are not harmed by exposure to chemicals or noise also exists, and work area and personal monitoring are conducted annually. JBC has an incident reporting system for reporting and tracking environmental and safety incidents. All incidents, including minor spills and releases, are reported and investigated with corrective actions are tracked in a database and reviewed monthly.

JBC has a HAZMAT team that is trained to respond to chemical spills and releases on company property or elsewhere in Jordan. Emergency response vehicles are equipped with materials used to stop and contain spills, as well as protective equipment for the employees. The company performs annual spill-response training with the Civil Defense Department offices in Safi and Aqaba.

17.3Requirements and Plans for Waste and Tailings Disposal

Regarding the bromine production activities by JBC, the main waste product is the tailbrines (i.e., concentrated Dead Sea brines that are chemically neutralized before being sent back to the Dead Sea through the Truce Canal). Furthermore, JBC recently started two projects for the reclamation of water from waste streams that will lead to further reduction of the water footprint.

The waste product of the bromine-production process does not represent a hazardous waste and does not require any other treatment or procedure for final disposal.

JBC’s waste management program includes procedures for storage, handling and disposal of municipal waste, organic-containing waste, non-hazardous waste, and hazardous waste.

As part of its waste management approach, JBC focuses its efforts to reduce environmental impact by tracking the waste generated at the plants, checking local and global markets for facilities that reuse or recycle the waste produced by JBC and by Implementing measures to reduce the waste generated, especially hazardous waste that is sent to landfill.

17.4Project Permitting Requirements, The Status of Any Permit Applications

The QP understands that JBC operates in compliance with Jordan’s national regulations, such as the Environment Protection Law (No. 52/2006), the Public Health Law (No. 47/2008), the Civil Defense Law (No. 18/1999) and the Labor Law (No. 8/1996).

JBC works closely with the local communities, governmental, and nongovernmental organizations (NGOs) to positively impact and to help communities prosper socially and environmentally. JBC has also established the Caring for Jordan Foundation, which contributes to the well-being of Jordanians by helping them to improve their quality of life through support of sustainable community projects. The activities include providing computer laboratories in schools and supporting several local community organizations.

The project is aligned with the World Bank Group’s Country Partnership Strategy for Jordan, which commits to strengthening the country’s foundation for sustainable growth with a focus on competitiveness. MIGA’s support is also aligned with the agency’s efforts to mobilize $1 billion in insurance capacity to support foreign, direct investment into the Middle East and North Africa.


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JBC has indicated that it seeks to help raise the quality of life for the communities where it operates for a balance of social development, environmental improvement, and economic development. JBC also provides small grants to various local projects and initiatives.

In 2011, JBC created the Community Advisory Panel (CAP) to enhance communication and cooperation with the local community. The CAP periodically connects community leaders with JBC management and staff to discuss concerns and strategize on local community development, environmental protection measures, educational and health-related development initiatives, and other key areas of JBC’s involvement.

17.5Qualified Person's Opinion

The QP opines that the JBC facility is operating in conformance with high industrial standards and is comparable with other similar facilities worldwide. The high level of compliance of the project is further confirmed by JBC’s ISO 9001, 14001 and VECAP certifications.

JBC’s robust Corporate Social Responsibility strategy is targeted at supporting sustainable community development projects and creating and funding sustainable social, cultural, and economic initiatives that service to local and national needs. JBC has a 3-year strategy that covers the Karak area, and in particular, particularly the communities of Qasaba, Ghor Al-Safi, and Ghor Mazra’a.

The QP found that the studies carried out by JBC met or exceeded the requirements of local and international industry standards and have been approved by Jordanian regulators. The QP also opines that JBC has effectively implemented its environmental and socioeconomic policies and has fulfilled its responsibilities efficiently.


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18CAPITAL AND OPERATING COSTS

The JBC facility is an active operation in the industrial production of elemental bromine and most of its major capital expenditures have already taken place. The facility has demonstrated its technical and financial feasibility and, therefore, the capital expenditures (CAPEX) and operating expenditures (OPEX) elements that are discussed in this section are directly related to sustaining the current production level through the term of APC’s mineral concession (Year 2058).

JBC provided a model with the actual production, sales, and other financial elements that covers the time period from 2016 to 2021 (actuals) and forecasts for 2022 through 2025. After the QP had reviewed the model and assessed its soundness, the 2025 values (e.g., production and sales price) for the time period from 2026 to 2058 were used for the purpose of evaluating this project.

The Albemarle operation is a mature project which has been in commercial production for years. The accuracy of the capital and operating cost estimates used in the technical report are based on best industry practices and detailed historical information from the operation; therefore, they correspond to an AACE International Class 1 Estimate (AACE International Recommended Practice No. 18R-97).

As indicated by AACE, “Class 1 estimates are typically prepared to form a current control estimate to be used as the final control baseline against which all actual costs and resources will now be monitored for variations to the budget, and form a part of the change/variation control program. They may be used to evaluate bid checking, to support vendor/contractor negotiations, or for claim evaluations and dispute resolution.”

Typical accuracy ranges for Class 1 estimates are -3% to -10% on the low side, and +3% to +15% on the high side, depending on the technological complexity of the project, appropriate reference information, and the inclusion of an appropriate contingency determination. Albemarle’s capital and operating cost estimates have an accuracy of -10% to +10%.

18.1Capital Costs

The capital costs required for producing the bromine proven reserves have been forecasted based on an analysis of the historical plant capital costs, JBC’s production plans, JBC’s associated capital budget forecast, and QP’s projections.

18.1.1Development Facilities Costs

No further facilities or plant capital have been used in the business plan because JBC intends to keep all of the major components of its industrial facility through the expiration of the concession contract. JBC has, however, included a Brine Extraction CAPEX Allocation of approximately $13.00-$14.40 million in its model.

18.1.2Plant Maintenance Capital (Working Capital)

Working capital has been forecasted as 23 percent of the implied revenue generated by the sales of elemental bromine. In the model prepared by JBC, the average annual working capital is approximately $213.90-$236.10 million.

18.2Operating Costs

The operating costs required for producing and processing brine to obtain elemental bromine have been forecast based on JBC’s production and operating budget. The total unit-production cost is forecast to be within the range of USD 355 to USD 444 per tonne of elemental bromine.


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The following table contains details on Albemarle’s annual capital by major components and operating costs by major cost centers. Columns beyond year 2031 have been combined and the values under 2032+ correspond to the sum of the individual figures through year 2058.

Table 18‑1: Summary of Operating and Capital Expenses


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19ECONOMIC ANALYSIS

•Elemental Bromine Production: In the model prepared by JBC, elemental bromine production varies between 112 thousand and 123 thousand tonnes per year between years 2021 and 2025. After 2025, the production remains constant at 123 thousand tonnes per year through the term of the concession contract ending in Year 2058.

•Average Selling Price: The economic analysis has been developed for a range of sales prices comprising the spot price as of the effective date of this report, the spot price less 15 percent, 30 percent and 45 percent (between USD 8,300 and USD 4,565 per tonne).

•Operating Cost: Estimated between USD 355 and USD 532 per tonne.

•Minority Interest: Calculated as 18.20 percent starting in Year 2022 through Year 2058 and is the amount of profit shared with APC; the remaining 82 percent is allocated to Albemarle.

•Working Capital: Estimated as 23% of the implied revenue.

•Brine Extraction CAPEX Allocation: It fluctuates between USD 13.00 million and USD 14.40 million per year during the period 2022-2058).

•Initial Date: January 1, 2022.

•Final Date: December 31, 2058.

•Discount Rate: 15 percent.

•Exchange Rate: 1 JD = 1.41 USD.

•Cost Basis: All costs are expressed in constant Q4 2021 US dollars.

For the purposes of the cash flow model and net present value estimates, the QP has selected discrete values for each of the input parameters noted above that are near the mid-point of the ranges.

19.1Royalties

The concession agreement between the Hashemite Kingdom of Jordan and JBC does not require payment of any royalty.

19.2Bromine Market and Sales

Bromine produced from the JBC project is marketed and sold as elemental bromine to external clients, as well as to the JBC plants that produce derivative products. The market value of the elemental bromine produced has been determined by the historical record of elemental bromine sales revenues. The Company has supplied the elemental bromine sales revenue data for analysis, and based on analysis of this data, the QP determined that a sales price between USD 7,470 and USD 9,960 per tonne in the period 2022 to 2058 is consistent with historical sales and current market forecasts.

19.3Income Tax

JBC has advised the QP that JBC is exempted from income tax based on Jordanian legislation.


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19.4Cash Flow Results

The QP has generated cash flow forecasts in real 2022$ terms. The results are summarized in the following tables. Columns beyond year 2031 have been combined and the values under 2032+ correspond to the sum of the individual figures through year 2058.

Table 19-1: Annual Cash Flow Summary – Proved Reserves – Spot Prices


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Table 19-2: Annual Cash Flow Summary – Proved Reserves – Spot Prices less 15%


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Table 19-3: Annual Cash Flow Summary – Proved Reserves – Spot Prices less 30%


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Table 19-4: Annual Cash Flow Summary – Proved Reserves – Spot Prices less 45%


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19.5Net Present Value Estimate

Based on the above-mentioned cash flow model, the QP has estimated the net present value (NPV) of the project by using a range of discount rates discount rate between 0 and 15 percent, and the results are shown in the following tables.

Table 19-5: Jordan Bromine Company –NPV of Reserves as of December 31, 2021 – Spot Prices less 45%

Table 19-6: Jordan Bromine Company – NPV of Reserves as of December 31, 2021 – Spot Prices less 15%

Table 19-7: Jordan Bromine Company – NPV of Reserves as of December 31, 2021 – Spot Prices less 30%


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Table 19-8: Jordan Bromine Company – NPV of Reserves as of December 31, 2021 – Spot Prices less 45%

Per the NPV estimate analysis, the 15% discounted NPV of the JBC project is estimated to be $2.72 and $5.25. billion as of December 31, 2021, demonstrating that the operations are economic and supporting the estimation of reserves. The following figure shows the full distribution of the NPV range for each price forecast for Proved reserves

Figure 19.1: Net Present Value Distribution of Proved Reserves by Price Forecast.


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20ADJACENT PROPERTIES

Three properties are adjacent to the JBC plant in the Jordanian territory. The Manaseer Magnesia Company and APC are shown in Figure 20.1. The Israel Chemicals (ICL) Dead Sea Works Limited plant is adjacent and on the west side of the Jordan-Israel border. This plant is similar to the APC and JBC plants in that it produces potash, bromine, and bromine-derivative products.

20.1Manaseer Magnesia Company

This report has extensively described the APC facilities and this section is a brief description of the Manaseer Magnesia Company property.

Manaseer Group acquired Manaseer Magnesia Company after purchasing the total shares of Jordan Magnesia Company in 2016 for a total of $12.5 million on a cash-free, debt-free basis. With this acquisition, Manaseer Group rehabilitated the plant and officially began operations.

The first phase of the Manaseer Magnesia Company plant operations, located in Ghor Al-Safi, comprised the production of caustic and hydrated lime. Manaseer Magnesia Company announced the commencement of the second phase of its plant operations to produce caustic calcined magnesia (CCM) at a capacity of up to 60,000 tonnes, with ambitious plans to further bolster production capacity in the future.

20.2Dead Sea Works Limited

ICL is a public company with dual-listed shares on the New York Stock Exchange (NYSE) and Tel Aviv Stock Exchange (TASE) (listed as NYSE:ICL and TASE:ICL). Shareholders include the Israel Corp. (45.93 percent) and the public (54.07 percent).

In 2018, ICL launched its “Business Culture of Leadership” strategy, which focused on enhancing market leadership across ICL’s three core mineral value chains of bromine, potash, and phosphate, as well as realizing the growth potential of innovative agriculture solutions. To better align the organization with this strategy, ICL realigned the company into four business divisions: Industrial Products (Bromine), Potash, Phosphate Solutions, and Innovative Ag Solutions.

ICL’s history began in the early twentieth century with the first efforts to extract minerals from the Dead Sea in Israel’s south. After Israel’s independence in 1948, the activities continued with the establishment of Dead Sea Works Limited, a state-owned company. During the early 1950s, several other government-owned companies were created to extract minerals from the Negev Desert and transform the minerals into chemical products. In 1975, ICL expanded through a consolidation with these companies, including Rotem Amfert Negev, Bromine Compounds, and TAMI (IMI) (ICL’s research arm). ICL also grew through organic growth and acquisitions.

In 1992, the Israeli government began privatization of ICL, first by listing 19 percent of ICL shares on the TASE. In 1995, the State of Israel sold its controlling interest (24.9 percent of ICL’s equity) to Israel Corp., which was then controlled by the Eisenberg family. In 1997, Israel Corp. acquired an additional 17 percent of ICL’s shares with another 10 percent acquired a year later. Also, in 1998, the State of Israel sold 12 percent of ICL’s shares to the general public, as well as 9 percent to Potash Corp.


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Figure 20.1: The Adjacent Properties of Manaseer Magnesia Company and Arab Potash Company.


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In the late 1990s, the Ofer Group acquired control of Israel Corp., including ICL. During the last 15 years, ICL has expanded significantly, primarily by increasing its production capacity and global distribution, establishing regional offices and joint ventures, and through synergistic acquisitions.

In 2018, Potash Corp sold its holdings in ICL. Today, ICL is a global powerhouse in fertilizers and specialty chemicals and fulfills essential needs in three core end markets: agriculture, food, and engineered materials by using an integrated value chain based on specialty minerals.


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21OTHER RELEVANT DATA AND INFORMATION

This section is not applicable at this time.


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22INTERPRETATION AND CONCLUSIONS

22.1General

•Jordan Bromine Company (JBC) is in the Hashemite Kingdom of Jordan (Jordan), in the Governorate of Karak, and is located on the southeastern edge of the Dead Sea. The JBC production plant facility occupies a 26-hectare (ha) area. It also has a 2-ha storage facility within the free-zone industrial area at the Port of Aqaba.

•In 1958, the Government of the Hashemite Kingdom of Jordan granted Arab Potash Company (APC) a concession for exclusive rights to exploit the minerals and salts from the Dead Sea brine until 2058; at that time, APC factories and installations would become the property of the Government6. APC was granted its exclusive mineral rights under the Concession Ratification Law No. 16 of 1958.

•JBC was established in 1999 as a joint venture between Albemarle Holdings Company Limited (a wholly owned subsidiary of Albemarle) and APC. Albemarle holds a 50 percent interest in JBC Limited. JBC’s operations primarily consist of the manufacturing of bromine, from which derivative products are made including TBBPA, calcium bromide, sodium bromide, hydrobromic acid, and potassium hydroxide.

•The Joint Venture Agreement guarantees the supply of brine and fresh water for the JBC operations through the life of APC’s concession (2058).

•The bromide-enriched brine, used by JBC as its main raw material, is a byproduct of potash operations conducted by APC. JBC’s operations primarily consist of the manufacturing of bromine, from which derivative products are made including TBBPA, calcium bromide, sodium bromide, hydrobromic acid, and potassium hydroxide.

•Brine extracted from the Dead Sea by APC is stored in ponds where it evaporates and concentrates until the constituent salts crystallize and progressively begin to precipitate. At the specific gravity of 1.31, carnallite begins to crystallize and precipitate. The carnallite is then harvested by wet dredging from the pond bottom, and the dredged salts are pumped in a slurry to a processing plant where the potassium chloride is separated from the magnesium chloride.

•The process through the evaporation ponds is continuous and a part of the final effluent from the carnallite ponds is sent to the JBC and MMC plants. The other part of the effluent is returned to the Dead Sea.

•The bromide-enriched feedbrine received by JBC is put through an industrial process that includes a chlorination and distillation phases, which accomplishes the separation and recovery of elemental bromine.

•The JBC complex consist of two plants: Area 1 and Petra, which have a combined processing capacity of over 15 million tons of feedbrine per year, and an estimated production capacity in excess of 130 thousand tons of elemental bromine per year.

•An estimated 52.26 percent of the brine resources identified in the Dead Sea are controlled by Jordan (as of the effective date of this report) and, therefore, correspond to APC under the terms of its concession. Consequently, as of December 31, 2021, an estimated 135,824 MMt of brine measured resources with an average bromine ion concentration of 5,000 ppm, and a cut-off grade of 1,000 ppm (135,824 MMt ×52.26 percent = 70,982MMt) is controlled by JBC. The measured resources of bromide ion attributable to Albemarle’s 50% interest in its JBC joint venture is estimated to be approximately 177.5 MMt. From these large resources, JBC is extracting approximately 1 percent of the bromine available. This estimate includes Reserves.

•The total Bromine reserves controlled by JBC as of 2020 are estimated at approximately 4.89 MMt of bromine (average of 132,000 tonnes/year over 37.0 years). The proven reserves


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attributable to Albemarle’s 50% interest in its JBC joint venture are estimated to be approximately 2.45 MMt of elemental bromine. This reserve estimate represents only a fraction of the total resource contained in the Dead Sea and accessible by APC/JBC and therefore, the estimate provides reasonable assurance that the project will not be affected by shortages of raw material over its life.

•JBC’s location near the APC facilities provides access to power and transportation infrastructure. JBC also operates a terminal at the port of Aqaba through which it imports supplies for its processes and exports elemental bromine and other derivatives.

•The global bromine market is expected to grow steadily at a Compound Annual Growth Rate (CAGR) of around 2.83 percent between 2021 and 2025. The oil-and-gas industry is an important market for bromine derivatives; in particular, the so-called clear brine fluids (e.g., calcium bromide, sodium bromide, and zinc bromide) are used as completion fluids to minimize formation damage and control reservoir formation pressures. Other important markets are cosmetics, automobile, and pharmaceuticals.

•Bromine produced from the JBC project is marketed and sold as elemental bromine to external clients, as well as to the JBC plants that produce derivative products.

•JBC complies with national regulations as well as with the Occupational Safety and Health Administration (OSHA) and National Fire Protection (NFPA) international regulations. JBC is the first company of its kind in Jordan to become an authorized exporter to Europe and has been certified for International Organization of Standards (ISO) 9001, 14001, and the Voluntary Emissions Control Action Program (VECAP).

•JBC’s robust Corporate Social Responsibility strategy is targeted at supporting sustainable community development projects and creating and funding sustainable social, cultural, and economic initiatives that service to local and national needs. JBC has effectively implemented its environmental and socioeconomic policies and has fulfilled its responsibilities efficiently.

•The JBC facility is an active operation in the industrial production of elemental bromine and most of its major capital expenditures have already taken place. The facility has demonstrated its technical and financial feasibility and, therefore, the capital expenditures (CAPEX) and operating expenditures (OPEX) elements that are presented in this report are directly related to sustaining the current production level through the term of APC’s mineral concession (Year 2058).

•The market value of the elemental bromine produced by JBC has been determined by the historical record of elemental bromine sales revenues.

•Based on the cash flow model presented in Chapter 19, the net present value (NPV) of the project has been estimated by using a discount rate of 15 percent. The NPV of the JBC project is estimated to be between $2.72 billion and $5.25 billion as of December 31, 2021, demonstrating the operations are economic and supporting the estimation of reserves.

22.2Discussion of Risk

In general, the risks for a large industrial project like JBC in Jordan could be considered moderate, in the opinion of the QP. This opinion is supported by analyses prepared by reputable institutions like the World Bank (www.doingbusiness.org), (Coface (www.coface.com), Societé Generale (https://import-export.societegenerale.fr), the International Labour Organization (www.ilo.org) and others.

The following is a detailed explanation of the major risks related to JBC project:

22.2.1 Geopolitical Risk

The local Jordanian politics should have minimal to no impact on JBC. The plant is at a sufficient distance from Amman; hence, any civil unrest would not impact operations. However, if the Jordanian


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government so desired, they could gain access to the Dead Sea for a separate bromine production facility. But JBC believes that it has the right of first refusal on this.

Jordan is politically stable, unlike most of its neighbors and it has the political and financial support from the Gulf monarchies and the Western countries. The World Bank projects Jordan’s economy to grow by 2.2 percent in 2021.

By the end of 2021Jordan’s economy showed signs of gradual recovery following a moderate contraction of 1.6 percent in 2020. Recovery in economic growth during 2021 has been led by services and industry, yet many subsectors have not yet reached pre-pandemic performance.

The country’s current account imbalances continued to widen for another year, particularly through the widening of the trade gap, though strong donor inflows helped Jordan build up its reserves. Jordan's development has historically benefited from international aid as the country has been able to become a central element of stability in the Near and Middle East, ensuring peace on the borders it shares with its neighboring countries. However, it is still vulnerable to international economic conditions and political instability in the Near and Middle East. The continued stability of Jordan hinges on three interrelated factors- its ability to maintain fiscal stability amid economic challenges, preserving relationships with its most important patrons, the US and the Gulf monarchies and mitigating the domestic effects of American or Israeli decisions taken regarding the Palestinians. The regional geopolitical stability is paramount to maintain uninterrupted supply chain and availability of raw materials for the property.

Jordan is one of the most committed countries to financial reforms within the region (privatization, tax reforms, opening of the banking sector, etc.). Jordan has implemented reforms under the terms of the extended fund facility that it negotiated with the International Monetary Fund (IMF) in 2016. The subsequent fiscal consolidation policies brought down the government budget balance to a deficit of 3.2% of GDP in 2019 from 3.6% in 2018. This trend is expected to continue with government balance anticipated to fall to a deficit of 2.9% of GDP by 2020 and 2.4% by 2021. IMF estimates the government debt to be 94.6% of GDP in 2019 and to decrease to 94.1% in 2020 and 92.4% in 2021.

The economic activity of Jordan will continue to be driven by mining and tourism. The latter is a particular focus for the government, which aims to double the 2016 tourist numbers by 2020. As in the past, banking and insurance activities (21% of GDP in 2018) will be growth drivers. Growth will also be fueled by exports (about 19% of GDP in 2018), particularly in the mining sector, following the demonstration of official support at the London Initiative, a conference held to bolster investment in Jordan. The reopening of the Iraqi border (despite security risks) and related trade and investment agreements, lower import costs (oil and food) and quicker-than-expected engagement by domestic companies with the Association Agreement with the EU, should increase economic activity.

Jordan's pro-Western and pro-Gulf stance will remain the cornerstone of foreign policy for security and, increasingly, economic reasons. Jordan's central strategic position should ensure continued logistical, financial, and military assistance from the United States, its main ally, despite differences with US policy in this region. In recent decades, Jordan has managed to navigate a period of regional chaos, maintaining stability through largely cosmetic domestic reforms, with significant financial aid from the US and Saudi Arabia. These patrons have acted as a safety net for Jordan, which lacks the natural resources of many of its neighbours.

In addition to the humanitarian and financial crisis caused by the influx of Syrian refugees, which caused an increase in public spending, Jordan also must deal with a high unemployment rate, that rose further to 16.8% by the end of 2019 (ILOSTAT), a high poverty rate and high levels of inequality. There were numerous popular protests in 2019, including strikes by teachers calling for a 50% increase in salaries, which the government responded to by proposing wage hikes.

A further potential fracture exists between Jordan’s citizens of Palestinian descent and its East Bank population. As the Israeli-Palestinian peace process is increasingly seen as dead, Jordan will face mounting pressure from its citizens of Palestinian descent to withdraw from the 1994 Wadi Araba treaty,


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which made peace between Israel and Jordan. While such a move would surely be popular with a broad section of the Jordanian public, Amman also faces strong incentives to maintain its cooperation. Among these are significant energy and water infrastructure projects on which the two countries have cooperated. Jordan could perhaps find other water and energy sources, but such alternatives may costly and unreliable. The monarchy is further caught between its popular demands and its American allies. The United States remains Amman’s most important international partner, and a country as dependent as Jordan is on foreign transfers can ill-afford to jeopardize such relationships.

Jordan’s economy showed a healthy recovery following a moderate contraction of 1.6 percent in 2020. Notwithstanding the restrictive pandemic measures, the economy managed to grow by 1.8 percent in the first half of 2021.

22.2.2Environmental Risk

Lower rainfall, increased drought, higher temperatures, and rising sea levels on the Gulf of Aqaba, are just some of the possible results of climate change affecting Jordan. Environmental problems there are further complicated by factors such as garbage disposal and road traffic. Also, the decreasing levels of the Dead Sea may be the single most critical environmental risk for the JBC project.

The scarcity and uneven distribution of precipitation over Jordan results in limited surface and groundwater resources available for domestic consumption and agricultural and industrial uses. Rapid population growth coupled with increased urbanization and industrialization are leading to the over-exploitation of aquifers and the contamination of diminishing supplies through: Inadequate industrial and municipal wastewater treatment capacities; Siting of industrial plants near or immediately upstream from potable supplies; and Overuse and misuse of pesticides, insecticides, fungicides and fertilizers leading to pollution of ground and surface water resources by irrigation drainage.

The Jordanian water shortages are a threat both to development and to the health of the population. Jordan has a multi-faceted difficulty with its lack of available water resources. Over the past decades, there have been extreme changes in climate that have drastically affected Jordan's water supply.

The water balance of the Dead Sea has been disturbed since the late 1950s. The lake has no outlet, and the heavy inflow of fresh water is carried off solely by evaporation, which is rapid in the hot desert climate. Due to large-scale projects by Israel and Jordan to divert water from the Jordan River for irrigation and other water needs, the surface of the Dead Sea has been dropping for at least the past 50 years.

The drop of the sea level increases the pumping and conveyance costs for the potash and bromine operations, due to the required relocation of the pumping facilities. However, these increases in cost are considered in the economic analyses of the operations. It is estimated that the predictable reduction in the level of the Dead Sea will not cause any significant impact on the potash and bromine projects within the APC/JBC mining concession, which will expire in 2058.

22.2.3Additional Raw Materials Risk

Supply of raw materials have been impacted due to COVID. Certain raw materials such as BPA (Bisphenol A) and chlorine have seen shortages all over the world. JBC is evaluating the prospect of installing a second chlorine plant and talks are ongoing regarding financing, ownership, etc.

Flooding and other natural impediments may also interrupt the supply of raw materials. JBC is working to address some of these concerns.


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22.2.4Other Risk Considerations

Albemarle, the US Joint-Venture partner of JBC mentions in its 2020 Annual Report that it perceives the fact that it is subject to government regulation in the non-U.S. jurisdictions in which it conducts its business as a risk. In the specific case of Jordan, as discussed in this report, the regulatory framework of the country and its favorable business environment, make this potential risk not very likely.

Albemarle indicates that its substantial international operations, like in the case of the JBC Joint Venture, are subject to the typical risks of doing business in a foreign country. As indicated stated by the QP, Jordan is a stable destination for business (both politically and financially). Furthermore, the fact that APC, a state-controlled entity is the JV’s local partner, provides further assurance that the operation is shielded from several of the most significant risks listed by Albemarle.

The possibility of terrorist activities that could impact the normal operations of JBC is real and is perhaps one of the greatest risks for any business in the Middle East.

Albemarle also highlighted the fact that the COVID-19 pandemic is having an impact on overall global economic conditions and mentioned that the ultimate impact on its business will depend on the length and severity of the outbreak throughout the world.

Albemarle indicated that it believes that it has sufficient inventory to continue producing at current levels, however, government mandated shutdowns could impact its ability to acquire additional materials and disrupt its customers’ purchases. Specifically on the bromine business, Albemarle explained that it expected both net sales and profitability to be modestly higher in 2021 than they were in 2020.

The summary presented in Table 22-1 are the QP’s opinion on the risks as highlighted by Albemarle:


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Table 22-1: Project Risks


Risk			Level of Risk to the JBC Project
Material adverse effect of the COVID-19 pandemic on the company’s results of operations, financial position, and cash flows.			This is a risk that affects industries worldwide. JBC has not reported any material impact on its liquidity. The length and severity of the pandemic may become a risk in the long run; however, Albemarle/JBC have kept their financial flexibility during the pandemic by adopting adequate managerial and financial measures, including the implementation of a cross-functional Global Response Team, to assess the situation and take necessary actions to address employee health and safety and operational challenges.
Fluctuations in foreign currency exchange rates may affect product demand and may adversely affect the profitability in U.S. dollars of products and services we provide in international markets where payment for our products and services is made in the local currency.			This is a risk on the buyers' side of the business and not inherent to the JBC operation. Further, from a local operations standpoint, the Jordanian Dinar is pegged to the U.S. Dollar.
Transportation and other shipping costs may increase, or transportation may be inhibited.			Not likely in Jordan.
Increased cost or decreased availability of raw materials.			Not applicable. Resources beyond foreseeable life of project.
Changes in foreign laws and tax rates or U.S. laws and tax rates with respect to foreign income may unexpectedly increase the rate at which income is taxed, impose new and additional taxes on remittances, repatriation, or other payments by subsidiaries, or cause the loss of previously recorded tax benefits.			Not likely. Very stable exchange rate over the past several years as the Jordanian Dinar is pegged to the U.S. Dollar.
Foreign countries in which Albermarle do business may adopt other restrictions on foreign trade or investment, including currency exchange controls.			Not likely in Jordan.
Trade sanctions by or against these countries could result in losing access to customers and suppliers in those countries.			Possible but not likely.
Unexpected adverse changes in foreign laws or regulatory requirements may occur.			Possible but not likely.


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Agreements with counterparties in foreign countries may be difficult for to enforce and related receivables may be difficult to collect.			Not applicable.
Compliance with the variety of foreign laws and regulations may be unduly burdensome.			Not applicable to the JBC operation.
Compliance with anti-bribery and anti-corruption laws (such as the Foreign Corrupt Practices Act) as well as anti-money-laundering laws may be costly.			Possible but not likely.
Unexpected adverse changes in export duties, quotas and tariffs and difficulties in obtaining export licenses may occur.			Not likely in Jordan.
General economic conditions in the countries in which Albemarle operate could have an adverse effect on our earnings from operations in those countries.			Possible but not likely.
Foreign operations may experience staffing difficulties and labor disputes.			Possible but not likely.
Termination or substantial modification of international trade agreements may adversely affect access to raw materials and to markets for products outside the U.S.			Not applicable to the JBC operation.
Foreign governments may nationalize or expropriate private enterprises.			Possible but not likely in Jordan.
Increased sovereign risk (such as default by or deterioration in the economies and credit worthiness of local governments) may occur.			Not likely.
Political or economic repercussions from terrorist activities, including the possibility of hyperinflationary conditions and political instability, may occur in certain countries in which Albemarle does business.			This is a risk in the Middle East, including Jordan.

22.2.5Risk Conclusion

The QP concludes that the JBC operation in Jordan can be characterized as of moderate risk and that the political or economic repercussions from terrorist activities could be considered the greatest risk, due to its location in the Middle East. Other economic and political factors, as well as the environmental


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considerations of this type of operation need to be watched, but do not represent a risk to the business in the foreseeable future.


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23RECOMMENDATIONS


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24RELIANCE ON INFORMATION PROVIDED BY THE REGISTRANT

Data provided by Albemarle and relied on is included in the following report sections.

JBC production reports. JBC (Area 1 and Petra Bromine) Brine Processing and Bromine Production Records (2019) [Source: JBC’s Operating Costs]

Table 25-1: Reliance on Information Provided by the Registrant


Category	Report Item/ Portion	Disclose why the Qualified Person considers it reasonable to rely upon the registrant
Macroeconomic trends	Section 19	The discount rate used was provided by Albemarle corporate finance group. The QP’s experience evaluating international projects leads them to opine that the selected discount rate is representative of the expected risks associated with an ongoing chemical manufacturing operation in the Middle East/North Africa (MENA) region, particularly in a politically stable country like Jordan
Marketing information	Section 16.1	Market overview information obtained from Technavio, a market research company with expertise in the field.
	Section 16.2	Major producer information was sourced from USGS Mineral Commodity Summary for Bromine. The USGS is considered by the QP as a reliable source of such data. The USGS canvasses very thoroughly the world mineral markets and its commodity specialists gather first-hand information from both producers and consumers of minerals.
	Section 16.3	Information on major markets was sourced from Market Research Future, a source considered as reliable by the QP, as well as of gather publicly available market indicators.
	Section 16.5	Albemarle provided information on bromine applications which was reviewed by the QP and considered reasonable. The QP also reviewed the public domain in order to obtain general information on bromine applications.
Legal matters	Section 3.2	This section includes information obtained from the public domain, particularly the general aspects of the Jordanian mining and environmental frameworks. These sources included translations of Jordanian laws available from publicly available sources, as well as comments from Jordanian lawyers specialized in natural resources in specialized forums.
Environmental matters	Sections 17.3, 17.4	Albemarle provided certain information regarding plant operations, particularly in regards waste streams. The QP also obtained information from the public domain, including general aspects of the Jordanian environmental framework, and Environmental Impact Assessment reports prepared by JBC under international environmental standards, in order to obtain multi-lateral financing for expansion work at both the plant and port.
Local area commitments	Section 17.5	The QP obtained information for this section from various sources, including Albemarle and JBC. The QP also obtained information regarding social programs and commitments with the local communities from the public domain.
Governmental factors	Section 3.2	The QP reviewed information from the public domain on the interaction of JBC with Jordanian government agencies and with regulators responsible to manage the various aspects of APC’s mineral concession on Dead Sea resources.


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REFERENCES

1 Warren, J. K., 2006. “Evaporites: Sediments, Resources and Hydrocarbons,” Springer Science & Business Media

2 AU - Wisniak, Jaime. “The Dead Sea - A live pool of chemicals January 2002 Indian Journal of Chemical Technology 9(1):79-87

3 Al-Rawabi Environment & Energy Consultancies, 2012. “Environmental Impact Assessment Study (EIA) Jordan Bromine Company Plants Expansion Project Special Free Zone, GhorNumeira, Jordan,” Al-Rawabi Environment & Energy Consultancies, Amman, Jordan

4 Madanat, H., 2010. “Land Tenure in Jordan,” Land Tenure Journal, North America, 2010/01, Food and Agriculutre Organization of the United Nations, Rome, Italy, pp. 143-170

5 Al Tarawneh, K., 2016 “A Comprehensive Outlook of Mining Industry in Jordan, Opportunities and Threats,” Open Journal of Geology, Vol. 6, No. 9, pp. 1137–1148

6 Arab Potash Company, 2018. 2018 Annual Report, Arab Potash Company, Sixty-Two Annual Report, Aman Jordan, prepared by the Arab Potash Company, Amman, Jordan

7 Pletcher, K., 2006. “Dead Sea,” britannica.com, accessed September 17, 2020, from https://www.britannica.com/place/Dead-Sea

8 COYNE-ET BELLIER, Tractebel Engineering, and KEMA, 2014. Red Sea – Dead Sea Water Conveyance Study Program, Final Feasibility Study Report Summary, Summary of Main Report, Report No. 12 147 RP 05, prepared by COYNE-ET BELLIER, Tractebel Engineering, and KEMA, for The World Bank

9 Ababsa, M., 2013. Atlas of Jordan: History, Territories and Society, Presses de l’Ifpo, Beyrouth, Lebanon. Available online at https://books.openedition.org/ifpo/4859?lang=en

10 ESIA Project Team, 2017. Red Sea Dead Sea Water Conveyance Study, Environmental and Social Impact Assessment (Updated) - Main Report, Revision:0.4, T&PBE8893-101-100R004F0.4, Drafted by:Royal Haskoning DHV for the European Investment Bank

11 Nissenbaum, A., 1993. “The Dead Sea - An Economic Resource for 10 000 Years,” Hydrobiologia , Vol. 267, No. 1–3, pp. 127-141

12 Tayseer, M. and S. Solomon, 2014. “Noble Signs $771 Million Deal to Export Israel Gas to Jordan,” bloomberg.com, accessed September 17, 2020, from https://www.bloomberg.com/news/articles/2014-02-19/noble-energy-arab-potash-said-to-sign-israel-gas-accord-today

13 Azran, E., 2017. “Israel Quietly Begins Exporting Natural Gas to Jordan Amid Political Sensitivities,” haaretz.com, accessed September 17, 2020, from https://www.haaretz.com/israel-news/business/israel-quietly-begins-exporting-gas-to-jordan-1.5443894

14 Gorodeisky, S. and K. Yeshayahou, 2018. “Tamar Partners Sign Additional $200m Jordanian Gas Deal,” globes.co.il, accessed September 17, 2020, from https://en.globes.co.il/en/article-tamar-partners-to-expand-gas-exports-to-jordan-1001261189

15 Frydman et al.2009. Engineering behavior of the Lisan Marl as a dyke foundation material: Dead Sea, Jordan, Bulletin of Engineering Geology and the Environment 68(1):97-106

16 Powell, J.H. 1988. The geology of Karak; Map Sheet No 3152 III, Bulletin 8, Geology Directorate, NRA, Amman


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17 McColl, W., 2014. Encyclopedia of World Geography, Volume 1, Golson Books, Ltd. Hudson, NY

18 Ghatasheh, N., H. Faris, and M. Abu-Faraj, 2013. “Dead Sea Water Level and Surface Area Monitoring Using Spatial Data Extraction From Remote Sensing Images,” International Review on Computers and Software, Vol. 8, No. 2, pp. 2892–2897. et al

19 TAHAL Group and The Geological Survey of Israel, 2011. Red Sea – Dead Sea Water Conveyance Study Program Dead Sea Study, GSI/10/2011, IL-201280-R11-218, prepared by TAHAL and The Geological Survey of Israel, Jerusalem, Israel

20 Lensky, N. G., Y. Dvorkin, and V. Lyakhovsky, 2005. “Water, Salt, and Energy Balances of the Dead Sea,” Water Resources Research, Vol. 41, No. 10. American Geophysical Union, Washington, DC

21 Science Daily, 2019. New study solves mystery of salt buildup on bottom of Dead Sea, accessed Dec 11, 2020, https://www.sciencedaily.com/releases/2019/07/190701144420.htm

22 American Geophysical Union, 2019. “New Study Solves Mystery of Salt Buildup on Bottom of Dead Sea,” ScienceDaily.com, accessed May 12, 2020, from www.sciencedaily.com/releases/2019/07/190701144420.htm

23 Gat, 2001. “The Dead Sea: A Model of a Desiccating Terminal Salt Lake”, J.R. Gat, Department of Environmental Sciences and Energy Research, Weizman Institute of Science, Rehovot, Israel. 2001

24 Woods Ballard, T. J. and G. J. Brice, 1984. “Arab Potash Solar Evaporation System: Design,” Proceedings of the Institute of Civil Engineers, Part 1, Vol. 76, No. 1, pp. 145–163

25 Anati, D. A. (1997), The hydrography of a hypersaline lake, in The Dead Sea: The Lake and Its Setting, edited by T. Niemi, Z. Ben‐Avraham, and J. R. Gat, pp. 89–103, Oxford Univ. Press, New York

26 Bashitialshaaer, R., K. Persson, and M. Aljaradin, 2011. “The Dead Sea Future Elevation Based on Water and Salt Mass Balances,” Handshake Across the Jordan: Water and Understanding, M. Aufleger and M. Mett (eds.), Books on Demand GmbH, Norderstedt, Germany

27 Gordon, Jr. D. C., Boudreau, P. R., Mann, K.H., Ong, J. -E., Silvert, W.L., Smith, S.V., Wattayakorn, G., Wulff F. and Yanagi, T. (1996). LOICZ Biogeochemical Modeling Guidelines. LOICZ Reports & Studies No 5: 1 -96

28 Asmar, B. and Ergenzinger, P. (2002). Prediction of the Dead Sea dynamic behaviour with the Dead Sea–Red Sea Canal Advances in Water Resources 25(7):783-791

29 Gavrieli, I. (1997), Halite deposition in the Dead Sea, 1960–1993, in The Dead Sea: The Lake and Its Setting, edited by T. Niemi, Z. Ben‐Avraham, and J. R. Gat, pp. 161–170, Oxford Univ. Press, New York

30 Israel Oceanographic and Limnological Research Institute, 2020. “Dead Sea Observing Stations,” ocean.org.il, accessed September 17, 2020, from https://isramar.ocean.org.il/isramar2009/DeadSea/seawindbasic.aspx

31 Weizmann Institute of Science, 2020. “Weizmann Institute of Science,” weizmann.ac.il., accessed September 17, 2020, from www.weizmann.ac.il

32 Technavio, 2017. “Global Bromine Market 2017-2021”, technavio.com, accessed September 17, 2020, from https://www.technavio.com/report/global-specialty-chemicals-global-bromine-market-2017-2021

33 Schnebele, E. K., 2020. “Bromine,” Mineral Commodity Summaries 2020, prepared by the US Geological Survey, Washington, DC

34 Market Research Future, 2020. “Global Bromine Market Research Report: Derivatives (Organobromides, Clear Brine Fluid, Hydrogen Bromide), Application (Flame Retardants, Oil And Gas Drilling, Mercury Emission Control), End-Use (Automotive, Oil & Gas) – Forecast Till 2023,” marketresearchfuture.com, accessed September 17, 2020, from https://www.marketresearchfuture.com/reports/bromine-market-1500


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35 CEIC, 2020. “China CN: Market Price: Monthly Avg: Inorganic Chemical Material: Bromine,” ceicdata.com, accessed September 18, 2020, from https://www.ceicdata.com/en/china/china-petroleum--chemical-industry-association-petrochemical-price-inorganic-chemical-material/cn-market-price-monthly-avg-inorganic-chemical-material-bromine


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Exhibit 96.6

MAGNOLIA FIELD BROMINE RESERVES AS OF DECEMBER 31, 2021

Magnolia, Arkansas, USA, property of Albemarle Corporation


214554 Final 26 January 2023


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RESERVE EVALUATION

MAGNOLIA FIELD BROMINE RESERVES AS OF DECEMBER 31, 2021

Magnolia, Arkansas, USA, property of Albemarle Corporation


Approval for issue
Michael Gallup, P. Eng.	[email]: michael.gallup@rpsgroup.com	26 January 2023


Prepared by:			Prepared for:
RPS			Albemarle Corporation
Michael Gallup Technical Director – Engineering
Suite 600 555 4th Avenue SW Calgary AB T2P 3E7			4250 Congress Street Suite 900 Charlotte, NC 28209 U.S.A.
T +1 403 265 7226 E michael.gallup@rpsgroup.com			T +1 225 388 7076
and
RESPEC Edmundo Laporte Peter Christensen Tabetha Stirrett 146 East Third Street PO Box 888 Lexington, Kentucky 40588


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RPS Ref: 214554 Suite 600

555 4th Avenue SW

January 26, 2023 Calgary AB

T2P 3E7

Albemarle Corporation T +1 403 265 7226

4250 Congress Street

Suite 900

Charlotte, NC

28209

U.S.A.

MAGNOLIA FIELD BROMINE RESERVES AS OF DECEMBER 31, 2021

Technical Report Summary as of December 31, 2021

As requested in the engagement letter dated July 26, 2021, RPS and RESPEC have evaluated certain Bromine reserves and resources in the Magnolia field, Arkansas, USA, as of December 31, 2021 (“Effective Date”) and submit the attached report of our findings. The evaluation was conducted in compliance with subpart 1300 of Regulation SK.This report was originally released February 7th, 2022 but has been amended on January 26th, 2023.

Yours sincerely,

for RPS Energy Canada Ltd

“Original Signed by Michael Gallup, P. Eng.
on behalf of RPS Energy Canada Ltd.”

Michael Gallup

Technical Director – Engineering

michael.gallup@rpsgroup.com

+1 403 290 2694


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Contents

RESERVE AND RESOURCES DEFINITIONS IX

INDEPENDENT CONSULTANT’S CONSENT AND WAIVER OF LIABILITY XI

1 EXECUTIVE SUMMARY 12

2 INTRODUCTION 15

3 PROPERTY DESCRIPTION 16

3.1 Property Leases 18

3.1.1 Burdens on Production: 19

3.1.2 Term of Leases 20

4 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY 21

4.1 Topography 21

4.2 Accessibility 21

4.2.1 Road Access 22

4.2.2 Airport Access 22

4.3 Climate 22

4.4 Physiography 23

5 HISTORY 25

6 GEOLOGICAL SETTING, MINERALIZATION, AND DEPOSIT 28

6.1 Geologic Setting 28

6.2 Property Geology 30

6.3 Mineralization 34

6.4 Deposit Type 35

6.5 Static Geological Model 35

7 EXPLORATION 36

7.1 Historical Exploration 36

7.2 Current Exploration 36

8 SAMPLE PREPARATION, ANALYSIS, AND SECURITY 37

9 DATA VERIFICATION 38

10 MINERAL PROCESSING AND METALLURGICAL TESTING 39

10.1 Brine Sample Collection 39

10.2 Security 39

10.3 Analytical Method 40

11 MINERAL RESOURCE ESTIMATES 41

12 MINERAL RESERVE ESTIMATES 42

12.1 Mineral Reserves Classification and Production Forecasts 42

12.1.1 Probable Reserves 42

12.1.2 Proved Reserves 42

12.1.3 Reserves Classified Production Forecasts 42


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13 MINING METHODS 45

13.1 Producing Brine at Supply Wells 47

13.2 Transporting Brine and Gas from Wellheads to Processing Plants 48

13.3 Sour Gas Treatment 49

13.4 Life of Mine Production Schedule 49

14 PROCESSING AND RECOVERY METHODS 51

14.1 Bromine Production 51

14.2 Tailbrine Treatment 52

14.3 Disposing of Tailbrine at Injection Wells 52

15 INFRASTRUCTURE 54

15.1 Road and Rail 54

15.1.1 Roads 54

15.1.2 Rail 55

15.2 Port Facilities 56

15.3 Plant Facilities 56

15.3.1 Water Supply 56

15.3.2 Power Supply 57

15.3.3 Brine Supply 58

15.3.4 Waste Steam Management 59

16 MARKET STUDIES 60

16.1 Bromine Market Overview 60

16.1.1 Major producers 60

16.2 Major Markets 61

16.3 Bromine Price Trend 61

16.4 Bromine Applications 62

17 ENVIRONMENTAL STUDIES, PERMITTING, AND PLANS, NEGOTIATIONS, OR AGREEMENTS WITH LOCAL INDIVIDUALS OR GROUPS 64

17.1 Environment 64

17.2 Permitting 64

17.2.1 Division of Environmental Quality (DEQ) 65

17.2.2 Arkansas Oil and Gas Commission 66

17.2.3 Albemarle South and West Plant Permits 67

17.2.4 Albemarle Well Permits 70

17.3 Qualified Person's Opinion 70

18 CAPITAL AND OPERATING COSTS 72

18.1 Capital Costs 72

18.1.1 Development Drilling Costs 72

18.1.2 Development Facilities Costs 72

18.1.3 Plant Maintenance Capital (Working Capital) 72

18.2 Operating Costs 73


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18.2.1 Plant and Field Operating Costs 73

18.2.2 General and Administrative Costs 73

18.2.3 Abandonment and Reclamation Costs 73

19 ECONOMIC ANALYSIS 75

19.1 Burdens on Production 75

19.2 Bromine Market and Sales 75

19.3 Capital Depreciation 76

19.4 Income Tax 76

19.5 Economic Limit 76

19.6 Cash Flow and Net Present Value Estimates 76

20 ADJACENT PROPERTIES 87

20.1 Brine Producing Properties 87

20.2 Oil Producing Properties 87

21 OTHER RELEVANT DATA AND INFORMATION 89

22 INTERPRETATION AND CONCLUSIONS 90

23 RECOMMENDATIONS 91

24 RELIANCE ON INFORMATION PROVIDED BY THE REGISTRANT 92

REFERENCES 93

Tables

Table 1-1: Albemarle Working Interest Reserves as of December 31, 2021 – Spot Prices 12

Table 1-2: Albemarle Working Interest Reserves as of December 31, 2021 – Spot Prices less 15% 12

Table 1-3: Albemarle Working Interest Reserves as of December 31, 2021 – Spot Prices less 30% 13

Table 1-4: Albemarle Working Interest Reserves as of December 31, 2021 – Spot Prices less 45% 13

Table 12-1: Bromine Recovery Factors 43

Table 13-1: Life of Mine Production schedule (1P Scenario) 49

Table 13-2: Life of Mine Production schedule (2P Scenario) 50

Table 16-1: Bromine Production in Metric Tons by Leading Countries (2015-2019) 60

Table 17-1: Typical Processing Times for Modification or Issuance of New Permits 67

Table 17-2: Existing Permits for Albemarle South Plant 68

Table 17-3: Existing Permits for Albemarle West Plant 69

Table 18-1: Summary of Operating and Capital Expenses (1P Scenario) 74

Table 18-2: Summary of Operating and Capital Expenses (2P Scenario) 74

Table 19-1: Price Forecast Summary 76

Table 19-2: Albemarle Working Interest Bromine Reserves as of December 31, 2021 – Spot Prices 76

Table 19-3: Albemarle Working Interest Bromine Reserves as of December 31, 2021 – Spot Prices less 15% 77

Table 19-4: Albemarle Working Interest Bromine Reserves as of December 31, 2021 – Spot Prices less 30% 77

Table 19-5: Albemarle Working Interest Bromine Reserves as of December 31, 2021 – Spot Prices less 45% 77


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Table 19-6: Annual Cash Flow Summary – Proved Reserves – Spot Prices 79

Table 19-7: Annual Cash Flow Summary – Proved Reserves – Spot Prices less 15% 80

Table 19-8: Annual Cash Flow Summary – Proved Reserves – Spot Prices less 30% 81

Table 19-9: Annual Cash Flow Summary – Proved Reserves – Spot Prices less 45% 82

Table 19-10: Annual Cash Flow Summary – Proved + Probable Reserves – Spot Prices 83

Table 19-11: Annual Cash Flow Summary – Proved + Probable Reserves – Spot Prices less 15% 87

Table 19-12: Annual Cash Flow Summary – Proved + Probable Reserves – Spot Prices less 30% 85

Table 19-13: Annual Cash Flow Summary – Proved + Probable Reserves – Spot Prices less 45% 86

Table 24-1: Reliance on Information Provided by the Registrant 92

Figures

Figure 1-1: Albemarle Magnolia Field Location Map 14

Figure 3-1: Magnolia Field Location Map 16

Figure 3-2: Magnolia Field Mapping and Naming 17

Figure 3-3: Magnolia Field Map showing MSLU Oilfield and Brine Processing Plant locations18

Figure 3-4: Albemarle Magnolia Field Lease Holdings as of December 31, 2021 19

Figure 4-1: Magnolia Field Topography 21

Figure 4-2: Average Temperature and Precipitation at Magnolia, AR 23

Figure 4-3: Arkansas physiographical regions and location of Magnolia. 24

Figure 5-1: Magnolia Field Location Map 25

Figure 5-2: Brine Field Map 26

Figure 5-3: Historical Brine Production in South Arkansas 27

Figure 6-1: Generalized stratigraphic column for the Triassic through Jurassic section in South Arkansas,. 28

Figure 6-2: Northern Limit of Smackover and Louann and South Arkansas Fault System 29

Figure 6-3: Vertical Stratigraphic Profile of the Smackover in Arkansas and Louisiana (modified from Hanford & Baria, 2007) 30

Figure 6-4: North to South Cross Section showing Norphlet and Smackover thinning 31

Figure 6-5: Smackover Structure Map 32

Figure 6-6: Upper Smackover Regions 33

Figure 6-7: Bromine Concentration Map 34

Figure 12-1: Bromide Production forecasts 43

Figure 13-1: Schematic depiction of the bromine extraction and recovery process at Magnolia’s South and West Plants 45

Figure 13-2: Albemarle Magnolia – Supply and Injection Wells 46

Figure 13-3: Schematic depiction of the brine extraction process at Magnolia’s South and West Fields 47

Figure 13-4: Albemarle Magnolia – Brine Supply Wells 48

Figure 14-1: Schematic depiction of the bromine recovery process at Magnolia’s South and West Plants 50

Figure 14-2: Albemarle Magnolia – Brine Injection Wells 52

Figure 15-1: Road Network 54

Figure 15-2: Rail Network 55

Figure 15-3: Arkansas Energy 56

Figure 15-4: Albemarle-Magnolia Power Supply 57

Figure 16-1: Bromine Price Trend as per China Petroleum and Chemical Industry Federation (Price Is in Yuan). 61

Figure 19-1: Net Present Value Distribution of Proved Reserves by Price Forecast 77

Figure 19-2: Net Present Value Distribution of Proved + Probable Reserves by Price Forecast77

Figure 20-1: Adjacent Properties 86

Figure 20-2: Adjacent Oil Fields 87


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RESERVE AND RESOURCES DEFINITIONS

The following definitions have been used by RPS Energy Canada Ltd. (RPS) in evaluating reserves. These definitions are based on the SEC RIN3232-AL81 “Modernization of Property Disclosures for Mining Registrants” Final rule, October 31, 2018, and are consistent with the definitions of the Committee for Mineral Reserves International Reporting Standards (“CRIRSCO”) “International Reporting Template for the public reporting of Exploration Targets, Exploration Results, Mineral Resources and Mineral Reserves”, November 2019, as published by the International Council of Mining & Metals (“ICMM”).

Mineral Resources

A Mineral Resource is a concentration or occurrence of solid material of economic interest in or on the Earth’s crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction.

The location, quantity, grade or quality, continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling.

Mineral Resources are subdivided, in order of increasing geological confidence into Inferred, Indicated and Measured categories:

Inferred Mineral Resources

An Inferred Mineral Resource is that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity.

An Inferred Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.

Indicated Mineral Resources

An Indicated Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit.

Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing and is sufficient to assume geological and grade or quality continuity between points of observation.

An Indicated Mineral Resource has a lower level of confidence than that applying to a Measured Mineral Resource and may only be converted to a Probable Mineral Reserve.

Measured Mineral Resources

A Measured Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final evaluation of the economic viability of the deposit.

Geological evidence is derived from detailed and reliable exploration, sampling and testing and is sufficient to confirm geological and grade or quality continuity between points of observation.

A Measured Mineral Resource has a higher level of confidence than that applying to either an Indicated Mineral Resource or an Inferred Mineral Resource. It may be converted to a Proved Mineral Reserve or to a Probable Mineral Reserve.


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RESERVE EVALUATION

Mineral Reserves

A Mineral Reserve is the economically mineable part of a Measured and/or Indicated Mineral Resource.

It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by studies at Pre- Feasibility or Feasibility level as appropriate that include application of Modifying Factors.

Probable Mineral Reserves

A Probable Mineral Reserve is the economically mineable part of an Indicated, and in some circumstances, a Measured Mineral Resource.

The confidence in the Modifying Factors applying to a Probable Mineral Reserve is lower than that applying to a Proved Mineral Reserve

Proved Mineral Reserves

A Proved Mineral Reserve is the economically mineable part of a Measured Mineral Resource. A Proved Mineral Reserve implies a high degree of confidence in the Modifying Factors.


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INDEPENDENT CONSULTANT’S
CONSENT AND WAIVER OF LIABILITY

The undersigned firm of Independent Consultants of Calgary, Alberta, Canada knows that it is named as having prepared an independent report and its addendum report of the bromine reserves and cash flows of the Magnolia bromine field operated by Albemarle Corporation, and it hereby gives consent to the use of its name and to the said report. The effective date of the report is December 31, 2021.

“Original Signed by Michael Gallup, P. Eng.”

On behalf of RPS Energy Canada Ltd.


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1EXECUTIVE SUMMARY

RPS Energy Canada Limited (“RPS”) has completed an evaluation of Albemarle’s bromine reserves as of December 31, 2021, and assessed the following summary of results:

•The forecast production of sales bromine is 2,497 thousand tonnes for the Proved reserves case, plus an additional 574 thousand tonnes of Probable reserves, for a total Proved plus Probable reserves of 3,071 thousand tonnes. The ultimate recovery over 100% of the leased area at the end of this forecast represents a bromine recovery factor of 74% and 81% for the 1P and 2P cases respectively

•The Smackover formation can be vertically subdivided into the upper Smackover, EOD 0 to 5, historically known as the Reynolds Oolite, and the lower Smackover, EOD 7-9, sometimes split into middle and lower in the literature. The reserves estimated in this report have been confined to the upper Smackover due to technology limitations.

•The bromine reserves represent an estimated net present value range to the Company as shown in the following economics summary tables:

Table 1-1: Albemarle Working Interest Reserves as of December 31, 2021 – Spot Prices

Table 1-2: Albemarle Working Interest Reserves as of December 31, 2021 – Spot Prices less 15%


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Table 1-3: Albemarle Working Interest Reserves as of December 31, 2021 – Spot Prices less 30%

Table 1-4: Albemarle Working Interest Reserves as of December 31, 2021 – Spot Prices less 45%

RPS estimates that Albemarle will require a working interest share capital investment of US$1.0 to US$1.4 billion to develop the Proved reserves, and no additional capital to develop the Probable reserves. These estimates are in Constant 2022 dollars and are exclusive of abandonment and reclamation costs.


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Figure 1-1: Albemarle Magnolia Field Location Map

The body of this report contains an evaluation of the bromine reserves tonnages together with net present value and cash flow forecasts for the Magnolia, Arkansas bromine field. Included in the analysis reported here is a discussion of recent activities, key reservoir and economic issues and RPS’ rationale for the reserves evaluations.

This assessment has been conducted within the context of RPS’s understanding of the effects of mineral resource extraction legislation, taxation and other regulations that currently apply to this property.

Albemarle has made a representation to RPS as to the validity and accuracy of the data supplied for this evaluation. RPS does not attest to property title or financial interest relationship for any of the appraised properties.

It should be clearly understood that any work program may be subject to significant amendment as a consequence of future results in both the subject and adjacent areas. Mineral exploration and development is a risky and speculative venture, and the actual outcome of work programs cannot be predicted with certainty or reliability.

The net present values reported herein do not necessarily reflect fair market values of the property evaluated.


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2INTRODUCTION

In June 2016, the US Securities Exchange Commission (“SEC” or “Commission”) proposed revisions to its disclosure requirements for properties owned or operated by mining companies, to provide a more comprehensive understanding of a registrants’ mining properties. Then in June 2018, after a consultation process, including receiving and considering over 60 comment letters on the proposed revisions from various parties, the SEC put in place the amended statutory disclosure and reporting requirements of mineral resources and reserves for public companies engaged in mineral extraction activities. These requirements were spelled out in SEC RIN3232-AL81 “Modernization of Property Disclosures for Mining Registrants” Final rule, dated October 31, 2018. As described in the revised rule, the amendments “are intended to provide investors with a more comprehensive understanding of a registrant’s mining properties, which should help them make more informed investment decisions. The amendments also will more closely align the Commissions’ disclosure requirements and pollicises for mining properties with current industry and global regulatory practices and standards.” The rule requires that all publicly traded companies engaged in mineral exploration and production begin reporting for the first fiscal year beginning on or after January 2, 2021

On July 26, 2021, RPS Canada Limited, (“RPS”) was contracted, by purchase order from Albemarle Corporation (“Albemarle”) to conduct an evaluation of Albemarle’s interests in bromine reserves in the Magnolia producing brine field in central Arkansas, U.S.A., and the Jordan Bromine Company, Jordan, Dead Sea brine extraction operations in Jordan.

To conduct this evaluation, RPS utilized in-house engineering and associated staff, and engaged the services of RESPEC, an associated environmental and mineral engineering consulting firm to play a major role in many of the portions of the assessment and evaluation.

This report constitutes the final evaluation of the Magnolia, Arkansas brine field bromine reserves. The effective date of this evaluation is December 31, 2021.


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3PROPERTY DESCRIPTION

The Albemarle Corporation Magnolia bromine brine field operations property is located in Columbia County in southwestern Arkansas (Figure 3-1). From the subsurface Smackover formation in this field, Albemarle produces a brine rich in sodium bromide (referred to, throughout this report, as “bromide”) from which bromine is extracted. The area shown is the under lease from the landowners for brine production as of the effective date of this evaluation.

Figure 3-1: Magnolia Field Location Map

The brine field property is centered on the City of Magnolia, Arkansas, which is the county seat of Columbia County and has a population of approximately 12,000 residents. The property is divided into two parts, the South Field and the West Field with the City of Magnolia as the dividing line between the two areas. The area east of the City of Magnolia is referred to by Albemarle as the South Field and the area to the west is referred to as the West Field (Figure 3-2).


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Figure 3-2: Magnolia Field Mapping and Naming

The West Field has a total area of approximately 36,863 acres extending 14.5 miles to the west of the City of Magnolia and is 4 to 5 miles wide (north to south) encompassing parts of Township 17 South, Ranges 21 through 23 West. The South Field has a total area of approximately 104,585 acres that extends 14.5 miles east of Magnolia and is 10 to 12.5 miles wide (north to south) covering all or parts of Townships 16 through 18 South, Ranges 18 through 20 West. The southern edge of the property is approximately 10 miles north of the Arkansas-Louisiana State Line. The property consisting of these two field areas under lease from the landowners by Albemarle Corporation covers approximately 141,448 acres (221 square miles).

The area outlined on the map identified as MSLU is the Magnolia Smackover Lime Unit oilfield in the Magnolia Field operated by White Rock Oil and Gas, LLC where oil was first discovered from the Smackover formation in 1938 (Figure 3-3).


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Figure 3-3: Magnolia Field Map showing MSLU Oilfield and Brine Processing Plant locations

The Magnolia oilfield was unitized (a joint operation of several owner/operators of different portions of the reservoir) with the name “MSLU” for secondary recovery and a water flood of the Smackover Formation began in 1945. The produced water (bromine rich) from the oilfield operations is separated, then sent via pipeline to Albemarle’s South Plant and processed. Processed brine (depleted in bromine) is sent back to Magnolia Field to be re-injected into the Smackover Formation to continue the secondary recovery operations by White Rock Oil and Gas.

3.1Property Leases

The area of bromine production operations is comprised of 9,570 individual leases with local landowners, comprising a total area of 99,763 acres. The leases have been acquired over the course of time as field development extended across the field. The production leases are generally of the form of the “Arkansas Form 881/8 Oil, Gas and Mineral Lease (1/8 Gas)” or some derivative thereof. Each of the leases was executed between the parties, with the following terms:

A map showing full sections of the field where Albemarle has lease holdings are shown on map in the following Figure 3-4. Also shown on the map are production, injection and appraisal wells in the area, where the dense clusters of wells show oilfield development contiguous with the brine field operations.


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Figure 3-4: Albemarle Magnolia Field Lease Holdings as of December 31, 2021

3.1.1Burdens on Production:

The production leases include the following burdens:

a)Production Royalties:

•Oil: 12.5% of production

•Gas: 12.5% of gas sales revenues

•Solution gas: 12.5% of gas sales revenues

•Other minerals (except brine and minerals contained in brine): 10% of mineral sales revenue

•Brine: No production royalty

b)Production Lease Licences Fees:

•Lease Years 1, 2, 3,& 4: $1.00 per acre

•Lease Years 4 through 14: $10.00 per acre

•Lease Years 15 onward: $25.00 per acre

•For the purposes of lease licencing fees, the above lease fees have been superseded by the Arkansas Code, Title 15, Subtitle 6, Chapter 76 (15-76-315) which specifies that in lieu of royalty, an annual lease compensation payment of $32.00 per acre payable to the lease owner. This payment amount is indexed to the March 1995 US Producer Price Index for Intermediate Materials, Supplies and Components, then later the Producer Price Index for Processed Goods for Intermediate demand, which specifies that prices and costs are based on a datum cost base as of March 1995 and are escalated annually based on the USA Producer Price Index. In 2021 the average lease cost was $63.28 per acre per year.

For economic evaluation purposes, production lease licence fees have been included in the fixed field operating costs.


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3.1.2Term of Leases

The term of each lease begins on the effective date of the lease, and, as long as lease rentals are continuing to be paid, continues for a period of 25 years or longer until after a two year period where brine is not injected or produced from/to a well within 2 miles of lease lands area. The Lessee may hold leases after production has been shut in for twelve months by continuing the shut-in lease rental payments and hold the leases for a maximum of three years.


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4ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY

4.1Topography

The topography of the area is characterized by rolling hills with five stream valleys that cut north-south across the Albemarle Lease Property (Figure 4-1).

Figure 4-1: Magnolia Field Topography

There is approximately 100 to 200 feet of relief from the stream valleys to the hill tops. The elevations range from 180 feet to 360 feet with some hilltops over 400 feet above sea level. The City of Magnolia with an area of 13.27 square miles is located on one of the hilltops and is centered between the West Field and the South Field. The land area outside of the city is very rural, with vegetation being mostly pine trees on sandy hills with hard wood trees predominantly in the stream valleys. The bromine mineral deposit being extracted by Albemarle Corporation is found in the subsurface waters and is pumped through well bores to the surface and then sent to the main plants for processing by pipeline, therefore the surface pumps, pipelines and tanks would be affected by any changes in the topography. The topographic features and conditions on the surface are taken into consideration for the building of pipelines, roads and well site locations when planning the drilling of a development well to extract the bromine. The stream valleys and the cultural features of the City of Magnolia create challenges topographically for the necessary surface work required of any future development projects in those areas.

4.2Accessibility

Magnolia is located in southwest Arkansas, north of the center of Columbia County. The average altitude of the area is 336 ft above mean sea level. The surrounding region is a mix of dense forest, farm prairies, and low rolling hills.

The area includes extensive areas of loblolly-shortleaf pine forests. Despite its gently sloping terrain and areas of relatively rich soil, it is a region dominated by forests and forestry-related activities rather than by agriculture. Both pine and hardwood products are harvested in this region where the forest industry is particularly significant.


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Magnolia is located about 50 miles east of Texarkana, about 135 miles south of Little Rock, and about 75 miles northeast of Shreveport, Louisiana.

Adjacent counties to Columbia County are Nevada County (north), Ouachita County (northeast), Union County (east), Claiborne Parish, Louisiana (southeast), Webster Parish, Louisiana (south) and Lafayette County (west).

4.2.1Road Access

A road network consisting of U.S. Routes and local highways provides access to Magnolia.

Primary U.S. Highways in the Magnolia area include the following:

•U.S. Route 82 (US 82)

•U.S. Route 79 (US 79)

•U.S. Route 371

•Arkansas Highway 19 (AR 19 and Hwy. 19)

•Highway 355

Interstates 20, 30 and 49 (I-20, I-30 and I-49), are accessible from Magnolia by way of U.S. Route 371.

4.2.2Airport Access

The Magnolia Municipal Airport is a public-use airport in Columbia County. It is owned by the city of Magnolia and located three nautical miles southeast of its central business district.

The closest international airports is located in Little Rock, AR, which is approximately 2.5-hours north of Magnolia (approximately 140 miles).

There are regional airports at El Dorado, Arkansas (South Arkansas Regional at Goodwin Field), Texarkana (Texarkana Regional Webb Field) and Shreveport, Louisiana (Shreveport Regional Airport), all within a 70-mile radius of Magnolia.
Rail Access

Union Pacific (UP) and the Louisiana & Northwest Railroad (LNW) provide rail service in Columbia County, Arkansas.

4.3Climate

The average temperature is 64 °F (18 °C), and the average annual rainfall is 50.3 inches. The winters are mild but can dip into the teens at night and have highs in the 30s and even some 20s but average out around 50. The springs are warm and can be stormy with strong to severe storms and average highs in the mid-70s. Summers are often hot, humid and dry but with occasional isolated afternoon storms, highs in the mid to upper 90s and even 100s. In the fall the temps cool from the 90s and 100s to 80s and 70s. Early fall temperatures are usually in the 80s but can reach 90s and at times have reached 100. Late fall temps fall to 70s and 60s. It is not uncommon to see snow and ice during the winter. It has been known to snow a few times as late as April and as early as November in Magnolia.

Figure 4-2 shows the average temperatures and precipitation at Magnolia, Arkansas.


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Figure 4-2: Average Temperature and Precipitation at Magnolia, AR

Source: https://www.usclimatedata.com/climate/magnolia/arkansas/united-states/usar0351

4.4Physiography

Arkansas is divided into two major regions separated by a geologic fall line. The fall line is an imaginary line separating mostly consolidated rock of the Interior Highlands from mainly unconsolidated sediment of the Gulf Coastal Plain. Magnolia is located in the Gulf Coastal Plain Region.

The two major regions are sub-divided into five provinces based on their unique geological characteristics. Magnolia is located in the West Gulf Coastal Plain province, which is characterized by fairly at-lying rock formations and sediment deposited in terraces.

West Gulf Coastal Plain province extends across southern Arkansas. It is located south of the Ouachita Mountains and extends southward to the Gulf of Mexico and eastward to the Mississippi Alluvial Plain. The boundary between the Ouachita Mountains and the Coastal Plain is marked by rapids and waterfalls at points where streams leave the steeply sloping mountains. The eastern boundary of the West Gulf Coastal Plain is the Arkansas River as it extends from Little Rock (Pulaski County) to Pine Bluff (Jefferson County), and then Bayou Bartholomew from Pine Bluff to the Louisiana border. These two waterways separate the West Gulf Coastal Plain from the relatively recent stream deposits of the Mississippi Alluvial Plain.


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Figure 4-3: Arkansas physiographical regions and location of Magnolia.

Source: Arkansas Geological Survey https://www.geology.arkansas.gov/


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5HISTORY

Oil was first discovered in Arkansas in January of 1921 in the Nacatoch Formation in El Dorado Field, Union County near the site of the current Arkansas Oil and Gas Commission in El Dorado, AR (Figure 5-1). Oil was in demand and prices were good as a result of the First World War. Many discoveries were made in a number of formations in the Upper and Lower Cretaceous afterward with the largest oil field in Arkansas, the Smackover Field being discovered in 1922. By 1925 oil production reached a peak of 275,000 barrels per day and declined to 29,000 barrels per day by 1936i. Through the end of 2019, approximately 724 million barrels of oil have produced from many different formations in south Arkansas oil fields.

The Smackover is a geologic formation of limestone and dolomite that is 5000’-10,000’ in the subsurface of South Arkansas where it plays an important role in the oil, gas, and brine industries of that area. It is the oldest and deepest oil producing formation in Arkansas and is also thought to be the main source of the oil found in most of the overlying formations in South Arkansas2. Subsequent to seismograph operations in the area in 19351, oil was first discovered in 1936 from the Smackover Formation in the Phillips Petroleum Co. Reynolds #1 well at Snow Hill in the Smackover Field in southeastern Ouachita County (Figure 5-1).

Figure 5-1: Magnolia Field Location Map

A string of Smackover oil field discoveries followed in the next 6 years which include many of the larger fields such as Magnolia, Village, Midway, Buckner, Dorcheat-Macedonia, and Atlanta. These structures were found after the advent of exploration with the use of seismic reflection methods. Exploration, drilling, and production of oil and gas from the Smackover Formation in South Arkansas have continued to the present day.

Brine is formation water that has higher than the usual concentration of dissolved salts, comprised of Ca, Na, K, and Cl and minor amounts of other elements [Bates, 1980]. The brine is produced as a by-product


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of the oil production in many subsurface reservoirs and generally the brine rate increases as the oil rate decreases throughout the life of a producing well. The Smackover Formation water (brine) is hypersaline containing higher concentrations of the previously mentioned elements as well as many other elements including Bromine (Br). The concentrations of Bromine in the Smackover Formation brine in South Arkansas are unusually high with a range of 1,300-6,800 parts per million3.

Bromine is one of four halogen elements along with chlorine, fluorine, and iodine and is a highly corrosive, reddish-brown, volatile liquid that naturally occurs as sodium bromide in seawater with a normal concentration of 60-65 parts per millioniv. The bromine is generated and released into seawater with the decomposition of seaweed, plankton, and certain mollusks4 ,v. An Arkansas Oil and Gas Commission chemist found that the brine from 4 oil fields producing from the Smackover had concentrations ranging from 4,000-4,600 parts per million, which is much higher than the that found in seawater4. The high concentrations of bromine offer the opportunity for the bromine to be extracted commercially from the brine that is pumped from the Smackover Formation in the subsurface of South Arkansas. The brine produced from the Smackover in south Arkansas and to a lesser degree the brine production from wells in Michigan meets nearly one-half of the world’s bromine demand annually. In the infancy of the business the largest demand for bromine was to make ethylene dibromide, an additive to gasoline to stop lead build up in engines running on leaded gasolinevi [McCoy, 2014]. Today bromine and bromine compounds are used for fire retardant in plastics, water purification, agricultural pesticide products, oil field drilling fluids, and many other products and processes4.

The Murphy Corporation in El Dorado, AR discovered oil from the Smackover Formation in June of 1950 at Catesville Field, Union Co, AR. In April of 1956, Murphy acting on behalf of Michigan Chemical Corp. applied for a saltwater disposal (“SWD”) well to dispose of produced water from four Murphy oil wells producing from the Smackover. The produced water was to be processed through Michigan’s El Dorado Bromine Plant, then disposed of into the subject SWD well (Figure 5-2).

Figure 5-2: Brine Field Map

This was the beginning of the bromine extraction business in Arkansas where Michigan Chemical Corp, J-W Operating, Arkansas Chemical, and Great Lakes Chemical Corp. have been active in the brine business at times over the last 63 years in the El Dorado area. Great Lakes Chemical Corp. (now Lanxess AG) has been active since at least 1963 and currently is the only active operator in the El Dorado area.

In 1965, Brazos Oil and Gas Co. a division of Dow Chemical Co. drilled the first brine supply well near Magnolia, AR approximately 35 miles west of the Michigan Chemical Corp. operations in El Dorado (Figure 3-2). By February of 1967 six additional wells, 4 brine production supply wells and 3 brine injection wells were drilled and completed. These wells were all put into production in April of 1968 and are now called the West Field. In 1987 Ethyl Corporation took over operations of Dow Chemical in the West Field. A total of 36 brine supply and injection have been drilled through 2019 in this field.


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In 1969, Bromet, a JV between Ethyl Corporation and Great Lakes Chemical Corp. expanded bromine production approximately 30 miles west of El Dorado and approximately 5 miles south of the town of Magnolia, Arkansas (Figure 5-2). Bromet drilled and completed twenty-three total wells, 18 brine production supply wells and 5 brine injection wells from 1/1968 to 10/1969. These 23 wells, in what is now called the South Field were put into operation by the end of 1969. Great Lakes left the JV in the early 1970s and Ethyl took over as the sole owner until they spun off to Albemarle in 1994. Through 2021 a total of 78 brine supply and injection wells have been drilled in this field.

The total development of these three areas combines to create a 600 square mile fairway of brine production that extends over a two-county area that is 60 miles long and 10 miles wide (Figure 5-2). Based on public records from the Arkansas Oil and Gas Commission (“AOGC”), brine production in Arkansas has averaged approximately 810,500 barrels per day or 295.8 million barrels per year from all operators for the past 10 years. An estimated total of 219 million barrels of brine was produced in 2021, which was down about 17,000 barrels per day from the previous year and 210,000 barrels per day off of the 10 year average daily production rate. The highest recorded annual production was in 2004 at 389million barrels of brine (Figure 5-3). The total cumulative production of brine from 1979 through 2021 for Arkansas is 12.5 MMbbls.

Figure 5-3: Historical Brine Production in South Arkansas


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6GEOLOGICAL SETTING, MINERALIZATION, AND DEPOSIT

6.1Geologic Setting

The area of interest is located in South Arkansas which is on the north rim of the ancestral Gulf of Mexico. The early framework of the Gulf began with the rifting or parting of the North American Plate from the South American and African plates in Late Triassic Period and continued into the Early and Middle Jurassic Period from about 220 million years ago to 195 million years ago. During this time thick sequences of non marine clastic sediments filled the rifted basins in what is now called the Eagle Mills Formation (Figure 6-1). These initial deposits are predominately composed of red, purplish, greenish gray, or mottled shales, mudstones, and siltstones with some conglomerates and fine to very fine-grained sandstones. They are found around the rim of the Gulf of Mexico from Mexico through Texas, Arkansas, Mississippi, Alabama into Florida. Thicknesses have been recorded for Eagle Mills of over 6900’ in South Arkansas7.


Figure 6-1: Generalized stratigraphic column for the Triassic through Jurassic section in South Arkansas8,3.
Toward the end of the period of rifting in Middle Jurassic, the Gulf was a broad shallow restricted basin where evaporate deposits of anhydrite in the Werner Formation and thick salt deposits of the Louann Formation accumulated as marine waters periodically spilled into the basin probably across central Mexico9. The environment at that time was arid, where the evaporation exceeded the inflow of water with limited to no influx of terrigenous sediments, therefore the marine waters evaporated leaving layer upon layer of salt beds enriched with many other elements found in marine waters. The salt beds are approximately 3000’ thick in East Texas and North Louisiana and thin to the north, coming out of the basin to a point of non deposition around the rim of the basin7. A fault system developed down dip of the salt around the north rim from Texas through Arkansas and Mississippi into Alabama marking the upper limits of the salt basin. The fault system lies immediately down dip of the Jurassic salt as described of the Mexia-Talco fault system in Texas10. This fault system extends northeastward into Arkansas and is identified as the South Arkansas fault system (Figure 6-2). The north limit of the salt in South Arkansas is thought to be up dip to this same system. The extensive salt deposits were followed by a sea level low stand at the beginning of the Upper Jurassic (Figure 6-1), where sandstones, conglomerates and eolian or wind blown sediments of the Norphlet Formation were deposited directly onto the Louann Formation9. This was followed by a prolonged marine transgression or sea level rise that covered most of the present Gulf of Mexico basin. It reworked the upper


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most sandstones of the Norphlet Formation as the water level advanced shoreward over a broad, stable, ramp that dipped gently basinward12, 7.

The Upper Jurassic sea level rise or transgressive sequence is thought to have progressed rapidly and initiated the production of deep water dark colored carbonate mudstones and shales in the lower sequence (commonly referred to as the “brown dense”) of the Smackover Formation13, 14. The lower section consists of very thin fairly continuous lamina of clean carbonate mudstones and organic rich clay lamina or layers12. This organic rich lamina are thought to be source rocks from which much of hydrocarbons along the north rim of the ancestral Gulf of Mexico were generated15. The rise in sea level is thought to have increased rapidly throughout the lower portion of the Smackover, slowing through the middle and reaching a high stand that probably extended through the upper Smackover14. There were possibly some minor fluctuations in the sea level in the upper Smackover. The advance of the sea level up the shoreline ramp defines the limit of deposition of the Smackover Formation around the rim of the Gulf of Mexico Basin. In South Arkansas the Smackover Formation is identified in the subsurface as far north as southern Clark County (Figure 6-2).

Figure 6-2: Northern Limit of Smackover and Louann and South Arkansas Fault System

The Smackover is divided by some into upper and lower7 and some separate it into three members: upper, middle and lower with an overall thickness of over 1000’ 12,14. The lower as previously mentioned was deposited in a basinal, deep water setting below any turbulence from wave or storm action. The middle Smackover is that portion of the basin that is subtidal on the steeper part of the shelf between the basinal sediments and the shallow water shoal of the upper member. The sediments in the middle Smackover would be characterized as burrowed peloidal mudstones and burrowed peloidal to skeletal wackestones (mainly carbonate mud with some grains). The upper Smackover sediments commonly referred to as the Reynolds Oolite, were deposited above wave base in a high energy shoal beach system that consists of grainstone and packstones composed predominately of ooids, oncoids and pellets and lacking carbonate mud16.


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The upper Smackover grainstones are the main reservoir for oil, gas and brine deposits due to excellent porosity and permeability in these rocks. The lower and middle Smackover for the most part are lacking these characteristics of good porosity and permeability and are generally non reservoir type rocks. The middle Smackover in some areas will have zones of porosity and permeability development when sediments from the near shore were transported down slope and deposited. These are commonly dolomitized, enhancing the reservoir characteristics, porosity and permeability to the point of potential exploitation for the production of oil, gas or brine if present.

The upper and middle Smackover is a progradational system in that the sediment supply was great enough that the shoal complex of the upper sediments advanced seaward or prograded over the middle Smackover sediments, which in turn prograded over the lower Smackover to create the vertical sedimentary profile of the upper, middle and lower Smackover (Figure 6-3).

Figure 6-3: Vertical Stratigraphic Profile of the Smackover in Arkansas and Louisiana (modified from Hanford & Baria, 200717)

The Buckner Formation (Figure 6-1), which overlays the upper Smackover is composed of anhydrite and shale and was deposited in a restricted lagoonal, bay to tidal flat setting in an arid environment shoreward of the upper Smackover shoal/beach deposits. As the upper Smackover shoal/beach complex prograded seaward the dolomite, anhydrite, and shale of the Buckner followed, prograding over the upper Smackover. Toward the end of the Upper Jurassic, the sea level began a slow steady rise and deposited sandstone and shale of the Haynesville and Cotton Valley Formations that overlay these sediments14.

6.2Property Geology

The Smackover Formation is the aquifer that contains the bromine rich brine in South Arkansas and the data through well logs, core analysis and seismic is sufficient to determine its geometry and other characteristics for use in the modeling and resource estimation process. It is present throughout South Arkansas extending to the north edge of Ouachita and Nevada Counties. This line is generally considered the depositional limit of the Smackover in South Arkansas (Figure 6-2).

South of this line is the northern limit of the salt of the Louann Formation, which underlays the Norphlet, and Smackover Formations. The salt increases in thickness from there south across South Arkansas into the salt basins of North Louisiana. Down structural dip of the edge of the Louann is the South Arkansas fault system, which is a prominent graben faulting system that extends from Miller County eastward through southern Nevada and Ouachita Counties. This system basically parallels the up-dip edge of the


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Louann Formation and is thought to have been initially caused by gravity sliding of the salt toward the basin18. The graben consists of opposing down thrown faults that create an east-west trending block that is structurally lower within the fault system. The structure of the Smackover Formation is dipping south to southwest at approximately 200 feet per mile, ranging from an elevation of 1000 feet below sea level in the north to 11,500 feet below sea level in the south along the Arkansas-Louisiana state line. The overall thickness of the formation ranges from 14 feet near the up-dip edge of Smackover to over 900 feet in the southern Columbia County. This thinning of the Smackover and of the Norphlet Formation is illustrated on the south to north cross section A-A’ from southern Columbia County into Nevada County (Figure 6-4).

Figure 6-4: North to South Cross Section showing Norphlet and Smackover thinning

The upper Smackover is a thick porous and permeable body of oolitic-oncolitic grainstones composed of ooids, peloids, intraclasts and oncoids and was deposited throughout the area south of the updip limit and is present under the entire area of the Albemarle Property. It occurs at a depth of 7000 to 8500 feet below sea level and is a very good reservoir for the containment and extraction of bromide rich brine (Figure 6-5).


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Figure 6-5: Smackover Structure Map

A significant number of wells, drilled to various depths, on and surrounding the Property were evaluated for use in understanding the Property Geology. Of these, several hundred were utilized due their possession of adequate information for this purpose. Information obtained from the wells includes:

•Wireline log data (gamma ray, spontaneous potential, resistivity, density, neutron, and acoustic) were evaluated to extract geological information about the reservoir including lithology, porosity, thickness, and stratigraphy of the Smackover

•Core analysis, where available, provided porosity and permeability data

•N-S and E-W wireline cross-sections of the logs were used to determine variation of geometry in the Smackover across the Property

The upper Smackover across South Arkansas from south to north has three distinctive east-west trends (Figure 6-6).


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Figure 6-6: Upper Smackover Regions

The upper Smackover in the south region along the Arkansas State Line is generally an oolitic grainstone with relatively thin (less than 30 feet) intervals of sufficient porosity and having fair to high permeability. Many oil fields in this area are trapped stratigraphically. In the central area between the dashed lines, the upper Smackover is an oolitic grainstone having sufficient porosity and high permeability with thicknesses of total porosity that exceed 50 feet. The South Arkansas brine fields of Albemarle and Great Lakes Corporations are located in this area due to the thickness and the permeability of upper Smackover that allow for good reserves and high volume production. Also, located in this central portion are some of the largest oil fields in Arkansas that produce from salt cored anticlines in the Smackover. North of this region, oolitic grainstones were originally deposited in the upper Smackover with thicknesses similar to the central region. After deposition in this area, the oolitic grainstones were diagenetically altered by the dissolution of the ooids and calcite filling of the original pore space contemporaneously14. The result of this alteration creates a mold of the ooids that develops into rock with very high porosity (25-35%) and low to very low permeability that is called oolmoldic limestone.

The Smackover is subject to other diagenetic alterations after burial, most commonly the process of dolomitization which generally enhances the porosity and permeability.

The packstone-wackestone interval of the middle Smackover and the laminated mudstone of the lower Smackover both thin from south to north in South Arkansas (Figure 6-4). The middle interval generally has porosity less than 9% in the south region, with some porosity development to the north due to post deposition processes. This is evident in the central region where select intervals two to thirty feet thick in the middle Smackover are dolomitized, which generally enhances the original porosity and permeability of the rock. The laminated mudstones of the lower Smackover have very low porosity over the entire area of south Arkansas.

The environment of deposition of the Smackover is divided into coastal (beach facies), upper foreshore (beach to normal wave base), lower foreshore (normal wave base to storm wave base), subtidal (upper slope), deep subtidal (lower slope) and basinal (deep water, thin flat laminated strata). The upper Smackover grainstones were deposited in the coastal to lower foreshore regime of the coast line, while the middle Smackover packstone-wackestones were deposited on the slope in subtidal waters. These sediments are deposited contemporaneously as clinoforms and prograded seaward over the laminar basinal sediments of the lower Smackover. Fluctuations of the sea level during upper Smackover deposition allowed the clinoforms to stack resulting in very thick, porous and permeable grainstones in the central area where the brinefields are located. The anhydrite and shale of the Buckner Formation were


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deposited simultaneously behind the coastal region of the upper in lagoons and mudflats as the upper and middle Smackover prograded seaward.

6.3Mineralization

High concentrations of bromine (Br) are found on Albemarle Corporation Property in South Arkansas. The bromine exists as sodium bromide (“bromide”) in the formation waters or brine of the Jurassic age Smackover Formation in the subsurface at a depth of 7000 to 8500 feet below sea level. The bromine on the Property was first mined in 1965 by pumping the brine through well bores that penetrated the Smackover Formation.

The bromine concentrations, from independent sourcesxix, 3 to 6609 parts per million with an average of 5702 (Figure 6-7).

Figure 6-7: Bromine Concentration Map

The samples have good scatter across the Property with concentrations highest in the West Field diminishing slightly to the east in the South Field. These independent samples taken from producing oil or brine wells indicate excellent distribution of the bromine mineralization within the brine on the Property.

The upper and middle Smackover have porosities that range from 1% to over 28% and permeabilities from .1 millidarcy to over 8900 millidarcies. The rock with sufficient porosity ranges in thickness from 35 feet in the southern portion of the South Field to 262 feet in the northern portion of the South Field. Throughout most of the Property the porosity thickness is greater than 100 feet except in the southern half of the South Field where the average is less than 100’. The thick intervals tend to trend east and west following the depositional strike. The connectivity of the porous body of the upper Smackover is very good throughout the Property and can be recognized in the well performance between production and injection wells.

The mineralization occurs within the highly saline Smackover Formation waters or brine where the bromide has an abnormally rich composition. The bromine is more than twice as high as that found in normal evaporated sea water19. The bromine mineralization of the brine is distributed throughout the porous intervals of the upper and middle Smackover on the Property. The very good permeability and porosity of the Smackover grainstones provide excellent continuity of the bromine mineralization within the brine.


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6.4Deposit Type

Bromine is a chemical element with an atomic number of 35, an atomic weight of 79.904 and is a member of the halogen elements of the periodic table. It is a deep red noxious liquid that got its name from the Greek word bromos, meaning bad smell or stench20. It occurs naturally as soluble and insoluble bromides in the earth’s crust and becomes concentrated in seawater from erosion of the crust and deposition into the sea with normal concentrations of 60-65 parts per million of bromine.

The bromine in sea water does not precipitate from sea water during the process of evaporation as does halite and other evaporate minerals, therefore the concentrations of bromine increase over time through the evaporation of the sea water. The brine water found in the Smackover Formation in some areas of South Arkansas contains up to 6600 parts per million or mg/l of bromine. These concentrations are similar to those found in the waters of the Dead Sea, which has over 2400 meters of halite deposits beneath it and is thought to be the main source of the bromine from the dewatering of the halite at depth19. Sodium-calcium chloride brines appear to originate as interstitial fluids in evaporates (salt or halite and other evaporites) and are subsequently expelled or dewatered as the result of compaction from the deposition of younger overlying sediments21i,22. The bromine rich brine of the Smackover Formation is thought to have originated from the interstitial fluids within the salt deposits of the Louann Formation and expelled upward through faults and fracture into the Smackover during deposition of the Smackover and younger overlying sediments. Moldovanyi and Walters (1992) suggest that the brine may have been further enriched in bromine through the dissolution and recrystallization of the Louann salt by meteoric waters that may have penetrated the Louann through faults of the South Arkansas Fault System releasing more bromine into the waters.

The deposit that occurs on Albemarle Corporation Property is a confined bromine enriched brine deposit. The brine is confined within the porous intervals of the Jurassic Smackover Formation mostly in the upper 300’ of the formation. This being the aquifer, it is bounded at the top by the impermeable anhydrite and shale of the Buckner Formation. The base of the aquifer is bounded by impermeable carbonate mudstones and shale in the lower Smackover. There are no lateral boundaries to the east and west as well as to the north. Although no boundary is found on the south side, the porous interval does thin to less than 50 feet just south of the Property boundary.

6.5Static Geological Model

In order to describe the Magnolia field geology for use in determining in-place bromine volumes, and deriving bromine production forecasts, RPS constructed a three-dimensional (3D) geological model of the reservoir. The geological model grid captures all the data and the knowledge available about the sedimentology, stratigraphy, structure and about the rock characteristics of the Smackover in the Magnolia field. This information was gathered, interpreted, and combined into the Static Geological Model from a variety of sources including:

•Historical Albemarle and publicly available drilling log data

•Historical geological interpretations via contract geologists

•Multiple iterations of clinoform based interpretation of Smackover formation


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7EXPLORATION

7.1Historical Exploration

Exploration for bromine rich brine preceded the initial brine production, which began in 1965 in the West Field and 1969 in the South Field. Since that time, the two fields have been under development by Albemarle and its predecessors as wells were drilled to add to or extend the infrastructure of both fields to its current day extent. The Property has had many wells drilled to the Smackover Formation in the search for oil and gas over many years. These wells give Albemarle information about the thickness and quality of the permeability and porosity of the Smackover Formation in areas that have not been developed to this point. Regional studies on the Smackover brine in South AR done by Walters and Moldovanyl, 1992 and Carpenter and Trout, 1978, provide information on bromine concentrations from particular wells on the Property and the surrounding area. This information and information regarding the physical characteristics of the Smackover have reduced the need for exploration on the Property.

7.2Current Exploration

No exploration has been conducted on the property in the past year, and as such, no exploration activity results are included in this report.


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8SAMPLE PREPARATION, ANALYSIS, AND SECURITY

As the Magnolia field is currently on full commercial production, sample preparation, analysis, and security are discussed in Sections 10.1 and 10.3 of this report.


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9DATA VERIFICATION

The data set used in this study was collected from various agencies, from companies and from data generated and collected from Albemarle Corporation’s ongoing brine operations. Well logs, core analysis, production, and sampling data were all integrated to produce the mineral resource and reserve estimates. Well logs obtained from the client were compared with those available with the Arkansas Oil and Gas Commission (AOGC) in case of any discrepancy. The different gamma ray curves, density curves, acoustic curves and resistivity curves were compared with the well logs for accuracy. The Smackover subsea elevations were checked and compared with AOGC or Albemarle records for verification. Production data volumes were checked with AOGC records. Sampling of brine and authentication and procedures are described in the Sample Prep, Analysis and Security chapter of this technical report.

Due diligence on the collection of data, the validation of the data and the interpretation of the data has been sufficient to ensure the accuracy for use in this technical report. These available information and the sample or well density are adequate to allow a reasonable estimate of the geometry, tonnage, and continuity of the mineralization to model and establish confidence in the estimation of the mineral resources and mineral reserves of bromine on the Albemarle property found in this report.


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10MINERAL PROCESSING AND METALLURGICAL TESTING

The methods used to test the quality of the brine before it reaches the Magnolia plants are discussed in this chapter. Understanding the quality of the brine before it enters the plant is critical to ensure that the plant feed is consistent. The analytical procedures discussed herein are not typically used in the mining and exploration industry (e.g., geochemical assaying); however, the methods employed are sufficient for Albemarle to run its plants properly and efficiently. Site inspection was not possible because of COVID-19 travel restrictions; therefore, the sampling process has been described by Albemarle.

10.1Brine Sample Collection

The Magnolia bromine field and production wells and facilities were designed for the explicit purpose of gathering substantial quantities of brine for transport to the central bromine production facilities. Once at the facilities, the bulk brine is processed to produce bromine. Concentration measurements of the bromide salts (hereafter referred to as bromides) are critical to the successful operation of the bromine plants. The brine consistency is critical for forecasting various bromine derivative production, alignment with forecast sales and the overall health of the Albemarle/Magnolia bromine business.

Bromide samples from the Magnolia brine plants are collected in two strategic locations: (1) upstream of the bromine tower and (2) downstream of the bromine tower. Because of the nature of brine collection, the feedbrine (i.e., upstream brine) concentration of bromine remains relatively consistent; however, the concentration does vary as would be expected from brine extracted from the Smackover geologic formation, the source of brine for the Magnolia plants. Feedbrine samples are therefore frequently taken to capture concentration changes and more effectively adjust downstream operating parameters.

Tailbrine (i.e., downstream brine) samples are also taken frequently, primarily to ensure that existing parameters at the bromine tower are set correctly. Magnolia operators collect brine samples multiple times per day and as requested by plant management. The sampling method includes the following steps:

1.Travel to each feedbrine and/or tailbrine sampling area within the plants

2.Slowly open the sample valves to purge out collected debris or stagnant brine to ensure that the samples collected are representative of the actual flow

3.Collect approximately 1 liter of brine within the sample bottle (roughly filling to the bottle’s capacity)

Because of the long-established operation of the Magnolia bromine plant, the samples collected at both feedbrine and tailbrine collection sites are only regularly tested for bromide salts. The composition of the feedbrine and tailbrine, in terms of additional salt content outside of the bromide salts, has been very consistent over the last several years of production, and consists of magnesium, sodium, calcium, and potassium chlorides. Density measurements are not frequently taken based on the lack of density change in the brine over time.

10.2Security

Samples are taken directly from the sampling points to the internal Magnolia quality control (“QC”) laboratory. Samples are verified by the QC laboratory technician and operator during delivery and tracked through an electronic sample monitoring system where samples are given a designated number and the results of analytical tests are posted. Samples are not sent to external laboratories for testing; however, some samples are sent to internal analytical laboratories at different Albemarle sites (primarily the Process Development Center in Baton Rouge, Louisiana) for various other tests that are immaterial to plant operations but do provide quality assurance as duplicate sample analysis.


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10.3Analytical Method

The QP has reviewed the analytical method as provided by Magnolia and the method appears to be reasonable and well-established.


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11MINERAL RESOURCE ESTIMATES

All bromine mineral accumulations of economic interest and with reasonable prospects for eventual economic extraction within the Magnolia production lease area are either currently on production or subject to an economically viable future development plan and are classified as reserves. Therefore, there are no additional mineral resource estimates included in this evaluation.

The Magnolia facility has an established record of commercial production and, therefore, the reliability of the economic forecast operation is high. From the technical point of view, the quality of the feed, the expected recoveries and other key factors are well understood, by virtue of many years of operation.


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12MINERAL RESERVE ESTIMATES

Bromine mineral reserves estimates have been derived using a reservoir simulation model of the Magnolia Smackover field. The simulation model was built using an industry standard modeling platform, utilizing the static geomodel described earlier in Section 6 of this report. The model was used to forecast brine production in the Albemarle licenced areas using the Albemarle corporate business development plan. This section of the report describes production forecasts and reserves estimate produced by the model.

12.1Mineral Reserves Classification and Production Forecasts

The production forecast generated by the reservoir simulation model was utilized to generate reserves values as follows:

a.Production forecasts for each of the Proved reserves case and Proved + Probable reserves case (also denoted as “1P” and “2P”, respectively, in this report), were input to an economic evaluation model to determine the commercial viability of production.

b. Both forecasts were generated for fifty years of production.

c.Then, economic models were run out in time to determine the economic limit for the field under each reserve case. The production volumes up to the point of economic limit then constitute the reserves for each case.

12.1.1Probable Reserves

The fifty-year production forecast generated by the history matched reservoir simulation model, using the Albemarle business plan for future development of the field is considered to be the “most likely” forecast to be realized on the existing licenced area. Therefore, for the purposes of this reserve evaluation, utilizing the definitions of mineral reserves categories, RPS has classified this forecast as the Proved + Probable (“2P”) reserves level.

12.1.2Proved Reserves

The Proved reserves, by definition, constitute reserves volumes where there is a higher degree of confidence in the forecasts. In generating the production forecasts using a history matched reservoir simulation model, with in turn is based on a geological model built using reservoir geometry and property data from existing wells, the major uncertainties in the forecasts are considered to be related to the reservoir properties at infill drilling locations (locations of the reservoir not yet supported by actual well data.) The uncertainties in reservoir properties are considered to be directly related to the distance of the respective locations from existing well control. For the proved reserves case, to incorporate these uncertainties and reflect them into a production forecast, RPS has discounted the “most likely” forecast derived by the simulation model as follows:

•All existing development wells: Discount forecast by 10%

•For new development wells:

–For wells within 1 mile of existing well control: discount forecast by 20%

–For wells within 1 to 2 miles of existing well control: discount forecast by 30%

–For wells more than 2 miles from existing well control: discount forecast by 40%

12.1.3Reserves Classified Production Forecasts

The production forecasts derived as described above for the Proved + Probable and Proved reserves cases are shown in the following chart (Figure 12-1):


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Figure 12-1: Bromide Production forecasts

The cumulative production as of the effective date of this report is 4.06 million tonnes (raw) and 3.80 million tonnes (sales).

The total future forecast production volumes and total ultimate recovery from the leased area of the Magnolia field are summarized in Table 12‑1. The Bromine produced by Albemarle is essentially pure elemental Bromine, measured at >99.99% purity.

The considered sales price ranges between USD 4,565 and USD 8,300 per tonne and the operating cost ranges between USD 850 and USD 1150 per tonne, as detailed in Section 18 of this report.

The cut-off grade of the Magnolia operation has been estimated to be at 1,000 ppm. The bromide ion concentration in the brine extracted from the Smackover Formation, which feeds to bromine plants, significantly exceeds the selected cut-off grade.

Table 12-1: Bromine Recovery Factors


	Bromine Recovery
	Raw Bromine (Million Tonnes)	Sales Bromine (Million Tonnes)	Recovery Factor (%OBIP)*
Albemarle OBIP	8.48
Cumulative Production	4.06	3.80	45%
Forecast Recovery (1P)	2.69	2.50	29%
Forecast Recovery (2P)	3.30	3.07	36%
Ultimate Recovery (1P)	6.74	6.30	74%
Ultimate Recovery (2P)	7.36	6.87	81%


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*Recovery factor calculations (Sales/Raw OBIP) are based on sales production, as the difference between raw and sales volumes is injected back into the reservoir

Being a mature project with significant historical production information, the reliability of the modifying factors for Magnolia are considerably high and therefore the risks associated with those modifying factors are relatively low.


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13MINING METHODS

All bromine mineral extraction is conducted using supply (production) wells, producing brine from the subsurface Smackover Sands aquifer, as described in previous sections of this report. The produced brine is transported from the production wells via underground pipelines to two production processing plant facilities, where the bromine is extracted. The tailwater from the processing plants is transported back to the Magnolia field via underground pipeline, where it is re-injected into the same Smackover Sands aquifer via injection wells, providing reservoir pressure maintenance support to the brine producing operations. Figure 13-1 shows a simplified schematic of the complete system used by Albemarle.

Figure 13-1: Schematic depiction of the bromine extraction and recovery process at Magnolia’s South and West Plants

Previous sections of this report explain the importance of the two types of wells included in the brine extraction and reinjection used by Albemarle, namely the brine supply wells and brine injection wells, which are depicted in Figure 13-2.


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Figure 13-2: Albemarle Magnolia – Supply and Injection Wells

The bromine production process is not a typical mining/mineral processing sequence, however for the purposes of this report, all the steps involved in recovering the brine from the supply wells and its preliminary preparation to be put into the bromine separation plants will be considered “mining” activities, while the processes that takes place inside the bromine plants for the separation of the elemental bromine will be included under the processing and recovery methods.

Figure 13-3 shows a simplified schematic of the portion of the system used by Albemarle to extract the brine from the Smackover formation and prepare it for processing at Albemarle’s bromine plants.


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Figure 13-3: Schematic depiction of the brine extraction process at Magnolia’s South and West Fields

13.1Producing Brine at Supply Wells

Brine supply wells (“BSW”s) are utilized to pump brine from the Smackover formation to the surface. Downhole submersible pumps (“DHP”s) are used to elevate flow and pressure from the formation to the surface and are sized based on depth and downhole tubing size to provide an ideal production rate. The key components of the produced brine are chloride salts (primarily calcium and sodium, ~25 %) and bromide salts (sodium, ~1,000-5,000 parts per million (“ppm”)). The high chloride-salt content results in the produced brine having a relatively high density (SG = ~1.2).

Figure 13-4 shows all the active Brine Supply Wells in Magnolia operated by Albemarle.


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Figure 13-4: Albemarle Magnolia – Brine Supply Wells

After the brine reaches the surface, is processed in the field to remove co-produced oil and natural gas. Co-produced oil is separated into storage and later sales at the well head. Co-produced sour natural gas is fed into a gas handling system for transport to the main plants (South and West) for sweetening (H2S removal) and ultimately combusted as fuel for steam production. The magnitude of co-produced oil and natural gas depends upon location of the well in the field.

13.2Transporting Brine and Gas from Wellheads to Processing Plants

Upon being discharged from the wellhead booster pumps, the brine flows into a network of pipelines which transports the brine to the main processing plant. A similar, separate system of pipeline transports the produced sour gas from the wellhead to the plant. Both networks operate in parallel in the same right of way (“ROW”) to provide efficiency installation and maintenance.

The network of pipelines stretches over tens of miles and is comprised of a combination of both fiber-reinforced plastic (“FRP”) and Transite (asbestos-cement) pipeline. Historically, Transite pipelines were used due to their relatively low-cost, availability, and effectiveness. However, since the field has considerably expanded and innovative technology/materials have become available, new pipeline additions use FRP to provide improved protection against leaks, improved compatibility, greater pressure ratings, in addition to overall safety. Ongoing maintenance includes replacing the current Transite pipeline with FRP, particularly closer to the plant.


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The sour gas flows through a steel pipeline designed for sour gas service, meeting the demands of the National Association of Corrosion Engineers (“NACE”) Standard MR0175 (Petroleum and Natural Gas Industries – Materials for Use in H2S-containing environments in oil and gas production), and also FRP. Pipeline sizing is determined by flowrate and pressure drops requirements throughout the field.

The pressure with which the brine and gas exit the wellhead is not high enough to flow under natural pressure to the plant. Therefore, there are brine booster facilities as well as natural gas compressor stations to aid in transferring the brine along with gas to the Plants.

13.3Sour Gas Treatment

Natural gas is usually considered sour if it contains more than 4 ppm by volume of hydrogen sulfide (“H2S”) at standard temperature and pressure conditions.

Amine gas treating, also known as amine scrubbing, gas sweetening and acid gas removal, refers to a group of processes that use aqueous solutions of various alkylamines (commonly referred to simply as amines) to remove H2S and carbon dioxide (“CO2”) from gases.

At the Magnolia field, the sour gas enters an amine unit as soon as it arrives at the South Plant. This unit is designed to sweeten (remove H2S) the gas, in order to improve its downstream processing and handling. The amine unit treats the gas using a counter-current absorption process in which the gas flows upwards and a lean amine flows downward. In the absorber, the amine reacts with H2S and CO2, removing it from the gas. Nearly all of the H2S is consumed by the amine.

The sweetened gas, which at this point is primarily methane natural gas and nitrogen, is sent to the boilers for combustion and heat generation

The enriched amine is sent to a stripper unit where steam is directly injected to remove the sour gas from the amine.

Any residual water vapor within the sour gas is condensed/captured in knockout drums and the sour gas, containing nearly all of the H2S and most of the CO2, is sent further downstream.

The H2S rich gas is sent to either a Claus Plant for further conversion to elemental sulfur or to a plant that produces NaHS.

13.4Life of Mine Production Schedule

The following table summarizes the life of mine production schedule of the project.

Table 13‑1: Life of Mine Production schedule (1P Scenario)


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Table 13‑2: Life of Mine Production schedule (2P Scenario)


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14PROCESSING AND RECOVERY METHODS

This chapter will describe the methods employed by Albemarle to process the bromine-rich brine from and obtain essentially pure (>99.99%) elemental bromine at its South and West Plants.

Figure 14-1 shows a simplified schematic of the portion of the system used by Albemarle to process the bromide-rich brine from the Smackover formation and recover elemental bromine.

Figure 14-1: Schematic depiction of the bromine recovery process at Magnolia’s South and West Plants

14.1Bromine Production

Feedbrine from the brinefield supply wells in the South Field enters the plant downstream of the DS-7 booster station at a flow rate of between 8,000 and 10,000 gpm. The feedbrine then passes through a hydrogen sulfide (H2S) stripper that removes the bulk of H2S. This gas is then sent to the Amine/Claus plant described in previous chapters of this document. The stripped brine flows to the feedbrine tank, which acts as a surge capacity vessel and allows for a small amount of oil removal through extended residence time.

Feedbrine is pumped out of the feedbrine tank to the bromine tower. The feedbrine generally enters the tower with a temperature of 180-190°F.

The main reaction to transform the bromide salts in the feedbrine into bromine consists of the inclusion of chlorine in the tower. Liquid chlorine is brought into place by railcars and vaporized through chlorine vaporizers. The quantity of chlorine necessary is determined by the bromide salt concentration of the feedbrine. The inclusion of chlorine changes the bromide salts to elemental bromine and creates chloride salts within the feedbrine.

In order to strip the bromine from the feedbrine, steam is put into a tower to boil the bromine.

The stripped bromine leaves the tower overhead with water, chlorine, and light natural impurities as a vapor. The vapor stream then goes through a main condenser and secondary condenser, using water as their cooling medium. The condensed fluid out of both exchangers is combined into a phase separator, in which the bromine settles to the bottom as a result of its higher density. At this point of the process, the


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bromine is classified as "crude" due to the presence of organic impurities, chlorine, and water. The crude bromine drains by gravity and is then pumped to the purification train and derivative plants.

The process described above is the same in the West Plant, with the only difference being the sizing and capacities of the equipment

14.2Tailbrine Treatment

At the bromine tower, once the bromine has been stripped of its bromine content, the brine is referred to as tailbrine. Normal conversion rates of bromide salts within the tower are over 90%, and sometimes more than 95%.

Considering the existence of acid and residual chlorine and bromine, the pH level of the tailbrine is particularly low and has to be dealt with before disposal.

Soon after passing through a heat recovery system, the tailbrine flows by gravity towards the neutralization tanks where a strong base to adjust the pH. After pH adjustment the tail brine is cooled before being reinjected. There is adequate tail brine surge capacity between the plant and the injection operations.

14.3Disposing of Tailbrine at Injection Wells

Albemarle currently operates approximately 37 brine injection wells (“BIW”) between the South and West fields. All BIWs inject the tailbrine into the Smackover Formation, the same reservoir zones as the supply wells’ completions.

Figure 14-2 shows all the active BIWs in Magnolia operated by Albemarle.


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Figure 14-2: Albemarle Magnolia – Brine Injection Wells

In the South Field, tailbrine is pumped from the tailbrine tank into the brinefields with its final destination being 21 injection wells from where it is pumped back into the Smackover Formation for disposal.


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15INFRASTRUCTURE

Albemarle operates two production facilities in Columbia County, Arkansas: The West Plant and the South Plant. The West Plant is located approximately seven miles west of Magnolia, Arkansas. The South Plant is located approximately three miles south of the City of Magnolia. Pipelines run between the two plants and from the plants back to subsurface brine supply (production) wells. The production wells produce bromine rich brine from the Smackover geological formation.

The Magnolia-area operation dates back to 1969 when the Bromet Company began a small bromine extraction operation at a Smackover Brine Formation plot located south of the city along Hwy. 79. The plot is now the site of Albemarle’s South Plant.

Ethyl, as the company was later known, in 1987 absorbed Dow Chemical’s operation at what is now the West Plant. In 1994, Ethyl’s chemical operations were spun off into the Albemarle Corporation.

The principal use of the South Plant is production of flame retardants, bromine, inorganic bromides, agricultural intermediates and tertiary amines, while the West Plant’s produces flame retardants and bromine.

15.1Road and Rail

15.1.1Roads

The City of Magnolia, the South Plant, and the West Plant are serviced by several roadways. The South plant is accessible via US Route 79 (“US-79”) that runs north-south to the City of Magnolia to the north and the State of Louisiana to the south. The West Plant is accessible by US-371 that runs east-west to the City of Magnolia to the east. Additional major thoroughfares in the area include Arkansas Highway 19, 98, 160, and 344. These smaller roads are used for travel to the decentralized well sites around the brinefields.

US-79 is a United States highway in the southern United States. The route is officially considered and labeled as a north-south highway. The highway's northern/eastern terminus is in Russellville, Kentucky, at an intersection with U.S. Highway 68 and KY 80. Its southern/western terminus is in Round Rock, Texas, at an intersection with Interstate 35, ten miles (16 km) north of Austin.

In Columbia county US-79 continues northward from Louisiana into Emerson and then Magnolia, where it has a brief concurrency with US-82 through the city. From there, the route turns to the northeast, through Camden, where it intersects US-278, and Fordyce, in which it has a brief concurrency with US-167.

Figure 15-1 shows the road network that serves the Albemarle plants.


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Figure 15-1: Road Network

15.1.2Rail

Union Pacific (“UP”) and the Louisiana & Northwest Railroad (“LNW”) provide rail service in Columbia County, Arkansas. UP owns and operates Class I lines nationwide and LNW is a 68-mile, freight short line railroad (Class III). Both Albemarle plants have dedicated rail spurs that provide access to the UP and LNW lines, allowing the transportation of products all over the country.

Figure 15-2 shows the rail network that serves the Albemarle plants.


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Figure 15-2: Rail Network

15.2Port Facilities

The closest port is the Port of Houston. Several warehouses in the Houston area stockpile Albemarle finished products for distribution around the country and around the world. Products and supplies that are offloaded in Houston (or other nearby ports including New Orleans), are transported by road to Magnolia via trailer. The port system is not heavily involved in day-to-day production in Magnolia.

15.3Plant Facilities

15.3.1Water Supply

Fresh water is supplied to both the South and West plants via Albemarle owned and operated water wells. The wells are drilled into the Sparta Aquifer, a confined aquifer within the Mississippi embayment aquifer system, mostly localized in Arkansas but extending into Louisiana, Mississippi, Missouri, and Tennessee.

The Sparta aquifer is an excellent source of water because of favorable hydrogeologic characteristics. The thickness of the Sparta aquifer in Arkansas ranges from less than 100 feet (“ft”) near the outcrop area up to 1,000 ft in the southeastern part of the State. Through most of the aquifer's extent in Arkansas, it is underlain by the Cane River formation and overlain by the Cook Mountain formation. These two formations are low-permeability, fine-grained, clay-rich units that confine flow within the much more permeable sands of the Sparta Sand. Water enters (recharges) the Sparta aquifer from the outcrop areas and adjacent geologic units. The outcrop areas provide hydraulic connection between the aquifer and surface-water sources such as rivers, lakes, and percolation of rainfall. Before development of the aquifer as a water resource (predevelopment), flow in the aquifer was predominantly from the topographically


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high outcrop areas downdip to the east and southeast. The aquifer in Arkansas County is confined by the Cook Mountain confining unit. Depth to the Sparta aquifer in Arkansas County ranges from 300 to 700 feet below land surface, with thickness varying from 500 to 800 feet.

The water quality of the Sparta is such that it is used as residential potable water in the City of Magnolia and surrounding areas. Three water wells are used to supply potable water to the South plant with a nominal flow of 1000-1200 gallons per minute to supply the whole site. Process requirements, including injection wells are approximately 650 GPD.

Two additional water wells are used to the supply potable water to the West plant, where the demand from the plant is far outstripped by the water capacity of those two wells.

15.3.2Power Supply

Electricity is provided to the South Plant, West Plant, and brinefields by Entergy Arkansas, LLC (“Entergy”), a utility company that has served Arkansas customers for more than 100 years. Entergy companies serve approximately 715,000 customers in 63 counties and have approximately 3,500 employees in Arkansas. Entergy owns and operates the substation(s) at each property and within the brinefields.

Arkansas ranks among the 10 states with the lowest average retail price for electricity. According to the Energy Information Administration, industrial electricity in Arkansas23 is approximately 11 percent less expensive than the U.S. average as shown in Figure 15-3, which represents a strategic comparative advantage for industries located in the state.

Figure 15-3: Arkansas Energy


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115-kV systems are responsible for transmitting power from the larger transmission systems and generation facilities throughout the entire state of Arkansas. Some large industrial customers, such as Albemarle, are served directly from 115-kV systems.

Figure 15-4 shows the main power and distribution lines, as well as the location of the substations that serve the Albemarle plants in Magnolia.

Figure 15-4: Albemarle-Magnolia Power Supply

Most industries need 2,400 to 4,160 volt power supply to run heavy machinery and they usually have their own substation at their facilities, as is the case of Albemarle’s South and West Plants.

For the South Plant, there are two transformers within the substation: (1) 20MVA transformer dedicated to the plant itself where approximately 13 MVA is used when the plant is fully operational. The other transformer is a 10 MVA transformer that feeds offsite loads including some brinefield operations, the nearby nitrogen generation plant, and others.

For the West Plant, there are two substations. The Magnolia Dow substation rated at 12.5MVA provides supply to the plant itself where approximately 13 MVA is used when the plant is fully operational. The Magnolia West substation is rated at 27 MVA and feeds offsite loads including some brinefield operations and others.

15.3.3Brine Supply

The brine produced from the wells is conveyed to the plants via a network of gathering lines with pumps/booster stations as necessary. Depleted brine is returned and injected back into the formation. This process is discussed in detail in the Mining Chapter, Section 13.2.


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15.3.4Waste Steam Management

There are no significant dump sites for the brine/bromine process other than that described in the “Process Description” Section. Various derivative processes have solid waste streams that capture solids via filters. These are collected in localized areas around the plant sites and shipped off site for disposal. Due to the local climate, open air ponds for evaporation are not feasible so there has been an extended focus on stream recycling and process waste minimization over the 50-year lifetime of the Magnolia site.


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16MARKET STUDIES

16.1Bromine Market Overview

As reported by Technavio [2021]24, a market research company, the global bromine market is expected to grow steadily at a Compound Annual Growth Rate (“CAGR”) of around three percent from 2021-25. One major reason for this trend is the increased demand for plastics. Flame-retardant chemicals use bromine to develop fire resistance. Plastics are widely used in packaging, construction, electrical and electronics items, automotive, and many other industries. The increasing demand for plastics across various end-user industries is driving the demand for flame-retardant chemicals that in turn, will propel the bromine market.

Another trend that is responsible for a growing bromine market forecast is the growth in bromine and bromine derivatives used as mercury-reducing agents. Bromine derivatives are used in reducing mercury emissions from coal combustion in coal-fired power plants. Mercury emissions in the environment is a major concern for public health. The rising health concern along with stringent government regulations may increase global bromine market demand. The increased use of specialty chemicals in various end-use industries such as oil and gas, automobile, pharmaceuticals, and construction will also drive the demand for bromine.

16.1.1Major producers

The major world producers of elemental bromine are Israel, Jordan, China, and the United States, as shown in Table 16-1. The bromine production from the United States is withheld to avoid disclosing company proprietary data. The world total values exclude the bromine produced in the United States.

Table 16-1: Bromine Production in Metric Tons by Leading Countries (2015-2019)

[Source: USGS Mineral Commodity Summary- Bromine]


Country	2015 (MMt)	2016 (MMt)	2017 (MMt)	2018 (MMt)	2019(a) (MMt)
Israel	116,000	162,000	180,000	175,000	180,000
Jordan	100,000	100,000	100,000	100,000	150,000
China	100,000	57,600	81,700	60,000	60,000
Japan	20,000	20,000	20,000	20,000	20,000
Ukraine	3,500	3,500	4,900	4,500	4,500
India	1,700	1,700	1,700	2,300	2,300
Turkmenistan	500	500	—	—	—
United States	withheld	withheld	withheld	withheld	withheld
World Total (Rounded)	342,000	345,000	388,000	362,000	420,000
(a) estimated W = withheld.

The prominent players in the global bromine market are Israel Chemicals Limited (Israel), Albemarle Corporation (United States), Chemtura Corporation (United States), Tosoh Corporation (Japan), Tata Chemicals Limited (India), Gulf Resources Inc. (China), TETRA Technologies, Inc. (United States), Hindustan Salts Limited (India), Honeywell International Inc. (United States), and Perekop Bromine (Republic of Crimea). The production from the major global bromine producers is also provided in Table 16-1.


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16.2Major Markets

According to a report by Market Research Future [2021]25, which forecasts the global bromine market until 2023, the market is divided into five regions: Latin America, the Middle East and Africa, Asia Pacific, North America, and Europe. Among these, Market Research Future [2021]25 predicts that Asia would be the fastest-growing region for bromine consumption because of a growing population and increasing purchasing power in the developing nations. The growth of agriculture and automobile industries in countries such as China and India will also drive the increasing demand for bromine. North America will remain a dominant market, and developed industries such as cosmetics, automobile, and pharmaceuticals will affect the demand for bromine. The European region is expected to experience a moderate growth that will be driven by the cosmetic and automobile industries. The growing oil-and-gas drilling activities in Russia will also contribute to the growth of the bromine market.

16.3Bromine Price Trend

Because the market for bromine is expected to grow and oversupply is not foreseen, the price of bromine is expected to stay strong in the near future.


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Figure 16.1 illustrates the behavior of bromine prices in the period January 2014-December 2021.

Figure 16-1: Bromine Price Trend as per China Petroleum and Chemical Industry Federation (Price Is in US$)26. Available at: http://www.sunsirs.com/uk/prodetail-643.html.

16.4Bromine Applications

Albemarle produces a variety of substances from bromine [www.albemarle.com]. The specific derivatives produced are not discussed in detail in this technical report for proprietary reasons. The following list illustrate the ways that elemental bromine or bromine derivatives are used in a variety of products:

•Flame Retardants: Bromine is very efficient as a constituent element when used in producing flame retardants; therefore, only a small amount is needed to achieve fire resistance.

•Biocides: Bromine reacts with other substances in water to form bromine-containing substances that are disinfectants and odorless.

•Pharmaceuticals: Bromide ions have the ability to decrease the sensitivity of the central nervous system, which makes them effective for use as sedatives, anti-epileptics, and tranquillizers.

•Mercury Emission Reduction: Bromine-based products are used to reduce mercury emissions from coal-fired power plants.


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•Water Treatment: Bromine-based products are ideal solutions for water-treatment applications because of bromine’s ability to kill harmful contaminants.

•Oil-and Gas Industry Drilling Fluids: Bromine is used in clear brines to increase the efficiency and productivity of oil-and-gas wells.


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17ENVIRONMENTAL STUDIES, PERMITTING, AND PLANS, NEGOTIATIONS, OR AGREEMENTS WITH LOCAL INDIVIDUALS OR GROUPS

17.1Environment

In 2014, Albemarle officially joined the ENERGY STAR as a partner (the ENERGY STAR program is an initiative of the EPA), by making a fundamental commitment to protect the environment through the continuous improvement in energy performance.

For two straight years, Albemarle facilities have been awarded the Energy Efficiency Award by the American Chemistry Council (“ACC”) to high-performing Responsible Care® member companies. Responsible Care® is the chemical manufacturing industry’s environmental, health, safety, and security performance initiative, and it helps ACC member companies to enhance their performance and improve the health and safety of their employees, the communities in which they operate, and the environment as a whole.

Already certified by the Wildlife Habitat Council (“WHC”) since 2006, Albemarle’s Magnolia plants achieved Corporate Lands for Learning (“CLL”) certification in 2009.

WHC Conservation Certification programs can be found in 47 U.S. states and 28 countries. This certification is the only standard designed for broad-based biodiversity enhancement on corporate landholdings. It is a continual process by which activities are maintained to offer ongoing benefit to biodiversity and people.

The CLL certification is accredited by the Wildlife Habitat Council, a nonprofit, non-lobbying charitable organization comprised of a group of corporations, conservation organizations, and individuals dedicated to restoring and enhancing wildlife habitat. This designation recognizes the learning opportunities created by Albemarle’s commitment to environmental conservation and increasing native biodiversity across Magnolia’s 100-acre tract of reforested land and 70-acre artificially created marsh.

Magnolia’s South Plant and West Plant have artificial wetlands27, which meet the needs of numerous wildlife species while also providing an economic and environmentally friendly solution for industrial water treatment.

The Magnolia sites have a wetland mitigation bank, which allows needed wetland permitting if required for any new brine well or pipeline construction that may fall within jurisdictional land.

17.2Permitting

The purpose of environmental permits is to ensure that businesses and individuals understand and comply with all applicable federal and state environmental standards to protect the air, land, and water.

It is established that the State has primacy in issuing relevant permits for the whole operation of the brine extraction and processing plants. The Environmental Protection Agency (“EPA”) has delegated responsibility for many of the regulatory programs under its jurisdiction to the State; these could be Title V Air Permits, underground injection control (“UIC”), National Pollutant Discharge Elimination System (“NPDES”), among others.

The organizations responsible for issuing most of these permits are the Arkansas Department of Energy and Environment (“E&E”) and the Arkansas Oil & Gas Commission (“AOGC”). Currently between the two plants there is a combined total of 60 permits obtained from AOGC related to the supply and injection wells used in the brine extraction process.


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17.2.1Division of Environmental Quality (DEQ)

In Arkansas, the regulatory body in the area of environmental protection is the Arkansas Department of Energy and Environment (“E&E”), which absorbed the former Arkansas Department of Environmental Quality (“ADEQ”), which is now named the Division of Environmental Quality (“DEQ”). It was established in 2019 as part of the Transformation and Efficiencies Act of 2019 (Act 910).

The DEQ has four offices, with specific areas of competence:

•Office of Air Quality: regulates industries that emit air pollutants.

•Office of Energy: works to promote energy efficiency, clean technology, and sustainable strategies that encourage economic development, energy security, and environmental well-being.

•Office of Land Resources: regulates activities to ensure that Arkansas's land is protected.

•Office of Water Quality: regulates stormwater runoff and industrial discharges.

Albemarle’s operation at Magnolia are regulated by the Office of Air Quality and the Office of Water Quality.

17.2.1.1Office of Air Quality

The Office of Air Quality consists of four branches: Permits, Compliance, Planning, and Air Quality Analysis, and Enforcement and Asbestos. Each branch of the Office of Air Quality has specific duties and addresses various aspects of the air program. The branches work together to meet Arkansas’s federal obligations under the Clean Air Act; and protect air quality to enhance the lives and health of all Arkansans and visitors to the State, while fostering responsible economic expansion opportunities. Albemarle’s South Plant and West Plants air emissions are regulated by this office.

The Permits Branch issues new permits and permit modifications to existing facilities after reviewing and evaluating permit applications for administrative and technical completeness and ensuring that each application meets regulatory adequacy. The permit is written to meet state and federal regulations to include information on which pollutants are being released, how much may be released, and what kinds of steps the source's owner or operator is taking to reduce pollution. All permits will include a mechanism to demonstrate compliance with the permit conditions. There are two types of air permits: Minor Source and Major Source/Title V.

The Office of Air Quality Compliance Branch’s primary responsibility is to ensure that permitted facilities are operating according to state and federal air pollution regulations. This is accomplished through annual compliance inspections, stack testing, and monitoring of reporting requirements. Compliance inspectors also investigate citizen complaints relative to air pollution.

The Policy & Planning Branch is responsible for developing plans to implement DEQ’s program to protect outdoor air quality in the state in accordance with Arkansas law and the Clean Air Act. The Branch is also responsible for gathering and evaluating information on air quality conditions and emissions of air pollutants in the state. The Branch provides technical expertise to the other branches of the Office of Air Quality and helps to educate the public about air quality issues.

The Asbestos Section is focused on providing assistance and training to office staff, the regulated community, and the general public on asbestos related issues (mainly abatement, stabilization, and remediation).

17.2.1.2Office of Water Quality

Each of the Office of Water Quality’s four branches, Compliance, Enforcement, Permits, and Water Quality Planning, has different duties. Their common goal is protecting and enhancing Arkansas's waterways.


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The Compliance Branch performs compliance inspections at municipal wastewater treatment plants, construction sites, industrial properties, animal waste facilities, and oil and gas drilling sites.

The Enforcement Branch outlines corrective actions, sets corrective action schedules and civil penalties, and monitors instances of noncompliance throughout the state. The branch also oversees DEQ’s wastewater licensing program.

The Permits Branch issues a range of individual and general permits. The permits not only set pollution limits but also lay out reporting and other requirements all aimed at preserving water quality.

The Water Quality Planning Branch develops water quality standards for waterways and closely monitors surface water and groundwater across the state.

The Water Office staff maintains a Water Quality Management Plan (WQMP) in accordance with Section 208 of the Clean Water Act. The WQMP is an inventory of point source dischargers and their associated permit limits and other information.

17.2.2Arkansas Oil and Gas Commission

The mission of the Arkansas Oil and Gas Commission28 is to prevent waste and encourage conservation of the Arkansas oil, natural gas, and brine resources, to protect the correlative rights associated with those resources, and to respect the environment during the production, extraction, and transportation of those resources.

The Commission’s Regulatory Functions are the following:

•Issue permits to drill oil, natural gas, and brine production wells, and other types of exploratory holes.

•Issue authority to operate and produce wells through approval of well completions and recompletions.

•Initial production test to establish production allowable.

•Conduct compliance inspections during drilling process and operational life of well.

•Issue authority to plug and abandon wells to insure protection of freshwater zones and production intervals.

•Issue permits to conduct seismic operations for exploration of oil and natural gas.

•Issue permits to drill and operate Class II UIC (Underground Injection Control) enhanced oil recovery injection wells and saltwater disposal wells.

•Issue permits to drill and operate Class V UIC brine injection wells for the disposal of spent brine fluids following removal of bromine and other minerals.

•Conduct monthly administrative hearings to enforce provisions of the oil and gas statutes and regulations.

17.2.2.1Underground Injection Control (UIC) Program

In 1974, Congress passed the Safe Drinking Water Act, which required the U.S. Environmental Protection Agency (“EPA”) to establish a system of regulations for underground injection activities. The regulations are designed to establish minimum requirements for controlling all injection activities, to provide enforcement authority, and to provide protection for underground sources of drinking water.

In 1982, EPA gave to the State of Arkansas the authority to administer the UIC program29, and the former Arkansas Department of Energy and Environment’s Division of Environmental Quality now named Division of Environmental Quality, became the primary enforcement authority to regulate Class I, Class III, Class IV, Class V (other than spent brine from bromine production wells), and Class VI UIC wells. At present, there are no Class III, Class IV, or Class VI UIC wells in Arkansas.


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The Arkansas Oil and Gas Commission (AOGC) regulates Class II UIC wells and Class V bromine-production-related spent brine UIC disposal wells.

Class IV wells are banned by CFR 144.13 and APC&EC Regulation 17, except for EPA- or state-authorized groundwater cleanup actions.

17.2.2.2Underground Injection Control Well Classes

The Underground Injection Control program30 consists of six classes of injection wells. Each well class is based on the type and depth of the injection activity, and the potential for that injection activity to result in endangerment of an underground source of drinking water (USDW).

•Class I wells are used to inject hazardous and non-hazardous wastes into deep, isolated rock formations.

•Class II wells are used exclusively to inject fluids associated with oil and natural gas production.

•Class III wells are used to inject fluids to dissolve and extract minerals.

•Class IV wells are shallow wells used to inject hazardous or radioactive wastes into or above a geologic formation that contains a USDW.

•Class V wells are used to inject non-hazardous fluids underground. Most Class V wells are used to dispose of wastes into or above underground sources of drinking water.

•Class VI wells are wells used for injection of carbon dioxide (CO2) into underground subsurface rock formations for long-term storage, or geologic sequestration.

17.2.3Albemarle South and West Plant Permits

A detailed examination of the permits issued by the corresponding regulators showed that the Albemarle South and West plants were in full compliance with local, state, and federal regulations and related requirements for their current operations.

Each permit associated with both existing Albemarle plants require a certain issuance time and it varies depending on whether the application is for a renewal or for a new permit. Table 17-1 shows the estimated time it takes for the whole permitting process.

Table 17-1: Typical Processing Times for Modification or Issuance of New Permits


PERMIT	MODIFICATION	NEW APPLICATION
Class I Underground Injection Control (UIC) Well (non-hazardous waste)	≥ 3 mo ≤ 6 mo	≥ 6 mo ≤ 9 mo
NPDES Industrial Wastewater Discharge	≥ 3 mo ≤ 6 mo	≥ 6 mo ≤ 9 mo
Title V Air Operating Permit	≥ 3 mo ≤ 6 mo	≥ 6 mo ≤ 12 mo

Table 17-2 and Table 17-3 show a list of the current active permits corresponding to the South and West plants as well as a brief description of each permit. Voided permits and permits that are pending or under review as of the date of this report were not listed in the tables. The permits listed below are only those shown as “Active” in DEQ data base. The validity of the permits can vary between two and 10 years.


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Table 17-2: Existing Permits for Albemarle South Plant


ALBERMARLE SOUTH / AFIN # 14-00028
MEDIA	PERMIT TYPE	STATE PERMIT # (IF APPLICABLE)	DESCRIPTION
AIR	Title V	0762-AOP-R29	Authorization to construct, operate and maintain the equipment and/ or control apparatus at the plant.
AIR	Minor Source	1394-A	Authorization to operate a portable flare at the well site during periods of maintenance in the case of brine leak.
WATER-NPDES	Cooling Water	AR0038857	Authorization to discharge to all receiving waters in accordance with conditions set forth in this permit.
SOLID WASTE	Class III Non-Commercial	0175-S	Authorization to construct, maintain and/or operate a Solid Waste Disposal Facility.
SOLID WASTE	Class III Non-Commercial	0251-S3N-R1	Authorization of the Waste Disposal Facility set forth in the original permit renewal application.
WATER-UIC	UIC Class I	0004-UR-3	Non-discharge Water Permit: This permit is for the operation and maintenance of a nonhazardous Class I underground injection Waste Disposal Well.
WATER	Waste Storage	3419-WR-6	Authorization to construct, operate and maintain a facility with no discharge of process waste directly on to waters of the state.
WATER	Brine	2189-WR-8	This is the authorization to operate and maintain storage impoundments and transmission pipelines, consisting of storage and handling of brine and tail brine for and from chemical manufacturing process units, with no discharge of process waste directly on to waters of the state.
WATER	Waste Storage	3532-WR-9	This is the authorization to operate and maintain storage impoundments and transmission pipelines, consisting of storage and handling of wastewater from chemical manufacturing process units, with no discharge of process waste directly on to waters of the state.


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Table 17-3: Existing Permits for Albemarle West Plant


ALBERMARLE WEST / AFIN # 14-00011
MEDIA	PERMIT TYPE	STATE PERMIT # (IF APPLICABLE)	DESCRIPTION
AIR	Minor Source	0779-AR-1	Authorization to operate a portable flare at the well site during periods of maintenance in the case of brine leak
AIR	Minor Source	0882-AR-9	Authorization to construct, operate and maintain the equipment and/ or control apparatus at the plant.
WATER-NPDES	Cooling Water	AR0047635	Authorization to discharge treated sanitary wastewater, non-contact cooling water, boiler blowdown, boiler de-aerator blowdown, and other miscellaneous sources from a facility.
WATER-NPDES	Stormwater	ARR00A588	Authorization to discharge receiving storm water in accordance with conditions set forth in this permit.
WATER	Brine	0690-WR-5	This is the authorization to operate the plant brine pre-treatment and management system.
WATER	Brine	4007-WR-4	This is the authorization to operate and maintain storage impoundments and transmission pipelines, consisting of storage and handling of brine and tail brine for and from chemical manufacturing process units, with no discharge of process waste directly on to waters of the stat

17.2.3.1Title V Air Permits

The DEQ Office of Air Quality, oversees issuing new permits or renewals for the existing plants. They achieved this after evaluating and reviewing permit applications received to check for compliance with all the requirements and regulations stipulated in Title V of the Clean Air Act. It is a legally enforceable document designed to improve compliance by clarifying what facilities (sources) must do to control air pollution. EPA Region 6 provides oversight for air regulatory programs in Arkansas.

17.2.3.2Underground Injection Control (UIC) Permits

The Underground Injection Control (“UIC”) program is designed to ensure that fluids injected underground will not endanger drinking water sources. All Class I wells have strict siting, construction, operation and maintenance requirements designed to ensure protection of the uppermost sources of drinking water (“USDW”s). Wells injecting hazardous wastes have siting requirements to show that, with a reasonable degree of certainty, there will be no migration of hazardous constituents from the injection interval. Any Class I wells that dispose of hazardous wastes via injection then they would have to have a no migration petition (which only EPA issues) in addition to an DEQ state permit for injection well operations.

17.2.3.3National Pollution Discharge Elimination System

The permit program addressing water pollution by regulating point sources that discharge pollutants to waters of the United States is the National Pollutant Discharge Elimination System (“NPDES”), which was created by the Clean Water Act (“CWA”) in 1972. Its objective is achieved by regulating the point sources that discharge pollutants into the waters of the State. These discharges can include discharges from industrial process wastewater discharges and runoff conveyed through a storm sewer system.


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17.2.4Albemarle Well Permits

Albemarle has a total of 62 active well permits corresponding to the Magnolia Operations.

17.2.4.1Communities

Albemarle Corp. is one of the largest employers in Columbia County31, with about 375 employees at its two plants in Magnolia and another approximately 200 contractors who work on-site.

Albemarle’s advocacy efforts are focused on promoting sustainable solutions to global challenges, supporting its communities and customers, and defending the science upon which its chemistry solutions are based. Societal concerns raised by multiple stakeholders about certain chemicals is of particular concern to Albemarle.

Albemarle has a strong commitment towards sustainability, indicating that it is the cornerstone of its community and stakeholder engagement efforts. The corporation acknowledges that its social license to operate is contingent on the trust and reputation that comes with engagement.

Albemarle regularly engages with many stakeholder groups to maintain strong relationships, share information, and gather feedback.

Most of Albemarle’s US sites, including Magnolia, organize Community Advisory Panels (“CAP”s) under the Responsible Care Management System. In these CAPs, site leaders and employees meet regularly with members of the community in order to inform them about their operations and progress on important initiatives as well as to gather feedback and suggestions from local community members.

Albemarle sites also donate funds and volunteer time toward community initiatives, typically with the assistance of the Albemarle Foundation31, a private endowed charitable (501(c)(3)) entity created in 2007, with the mission of making a positive, sustainable difference in the communities where the corporation operates.

To date, the Albemarle Foundation has granted over $39.5 million into the communities where it operates, in the form of matching gifts, volunteer grants, scholarships, and nonprofit grants.

In 2019, the Albemarle Foundation donated over $250,000 to the Magnolia community for a variety of projects including a park on the town square and Southern Arkansas University's engineering program. Employee’s volunteerism includes a youth program called “Play It Safe" to teach outdoor safety, internet safety, fire response, and prom and graduation night safety reminders.

The Albemarle Foundation has also worked closely with Southern Arkansas University (SAU), giving $100,000 over four years to help the engineering program earn accreditation last year from the Accreditation Board for Engineering & Technology (ABET). SAU’s Muleriders Kids College, a day camp, also receives Albemarle support.

Albemarle bought the naming rights to the stage in a new “pocket park” on the town square in Magnolia, and it sponsors musical programs at the Magnolia Arts Center.

In 2019 Albemarle conducted a materiality assessment32, in which some of its key stakeholders helped it to review its environmental, social and governance efforts. The assessment included efforts to identify, assess, and prioritize the main issues on which Albemarle should focus and report.

17.3Qualified Person's Opinion

The QP opines that the Magnolia facility is operating in conformance with high industrial standards and is comparable with other similar facilities worldwide.

Albemarle’s robust Corporate Social Responsibility strategy is targeted at supporting sustainable community development projects and creating and funding sustainable social, cultural, and economic initiatives that service to local and national needs.


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An example of good environmental practices in Magnolia is the initiative to convert stormwater captured in an artificial marsh to freshwater for the Albemarle operations, reducing the burden on the local underground aquifer. Albemarle’s plants in Magnolia utilize aquatic plants to treat non-contact water and storm water runoff from within the main plant and adjacent areas. This is an innovative and economical solution to treating industrial water using a naturally occurring biological process that does not harm the environment or consume vast amounts of valuable energy resources.

The QP found that the environmental policies implemented by Albemarle at the Magnolia operation met or exceeded the requirements of local and international industry standards.


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18CAPITAL AND OPERATING COSTS

The economic evaluation of the bromine reserves accounts for capital and operating costs for the Magnolia field operations as well as the mineral processing operations at the West and South plants. Cost forecasts were based on data supplied by Albemarle, including corporate P&L statements for Bromine operations from 2014 through 2020, annual historical production data from 2013 through 2020, business plan forecasts for 2020 through 2026. All cost estimates and forecasts are shown in real 2022 USD terms.

18.1Capital Costs

Capital costs required to produce the bromine reserves have been forecast based on analysis of historical field and plant capital costs, the Company’s field development plans, and the Company’s associated capital budget forecast. RPS estimates that Albemarle will require a working interest share capital investment of US$1.0 to US$1.4 billion to develop the Proved and Probable reserves.

18.1.1Development Drilling Costs

The cost for drilling new development production (BSW) and injection (BIW) wells have been estimated based on actual costs incurred by Albemarle when drilling their last two BSWs, which were drilled in 2019 and 2021.

18.1.2Development Facilities Costs

No further facilities/plant capital has been included in the business plan. No facilities capital costs have been included in the economic analysis.

18.1.3Plant Maintenance Capital (Working Capital)

Albemarle historically spends maintenance capital costs to cover ongoing well and plant upgrades in order to maintain production and processing operations, and to conduct workovers and pump replacements on the producing wells in the field. Albemarle’s five year budget plan forecasts includes a schedule of maintenance capital from which RPS has estimated the following capital costs:

•Production (source) well workovers: $400k per workover

–One workover on each production well every two years

•Process plant maintenance capital: $18.9 million per year


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18.2Operating Costs

The operating costs required for the production of brine and processing the brine to obtain bromine reserves have been forecast based on analysis of historical field and plant operating costs, the Company’s field development plans, and the Company’s associated operating budget forecast. The field and plant operating costs are combined for each of the West Field and Plant and the South Field and Plant. The operating cost estimates shown are based on the approximate midpoint of a range of uncertainty associated with each estimate.

18.2.1Plant and Field Operating Costs

In evaluating the historical operating cost data, RPS has split operating costs into fixed and variable components to allow forecasting with variable product volumes, variable producing well counts, and variable injection well counts. Fixed costs include all costs not directly related to production/injection volumes and well counts, including annual lease payments on the multiple leased licence areas. Producing well variable costs include base costs for routine field operations which would vary depending on producing well count, but do not include production well workover costs, which have been included in maintenance capital. Injection well variable costs include the base well costs plus an amount to cover costs of regular acid stimulation treatments in order to maintain injectivity. Operating costs have some uncertainty associated with them, typically +/- 10% in a given year. Total operating costs for the Magnolia operation are forecast to be in the range of US$850 - US$1,150 per tonne of elemental bromine.

18.2.2General and Administrative Costs

Albemarle’s historical expenditures on general, sales, R&D, and administrative costs have been reviewed and analyzed for the past six years, with a fractional portion of total corporate G&A costs being allocated to the elemental bromine sales business and incorporated into the economic analysis.

18.2.3Abandonment and Reclamation Costs

RPS has estimated abandonment and reclamation costs as follows:

18.2.3.1Well Abandonments:

Albemarle includes well abandonment cost estimates in its operating costs forecasts of $185k per well for each production and injection well, plus $50k per well for site reclamation for a total of $235k per well. This cost estimate, which has been reviewed and adopted by RPS for this analysis, covers all rig and operations cost to remove all downhole tubing and equipment, set a plug over the producing formation plug, cement the well to surface, remove the wellhead and surface flowline equipment, decommission all subsurface flowlines, and reclaim the well site to original purpose use.

18.2.3.2Plant Abandonments

Albemarle does not include plant decommissioning, abandonment, and reclamation in its business plan for the two Magnolia bromine plants. The rationale for this plan is that the active commercial activity of both plants is planned to survive the field abandonment, and the plants will continue in operation sourcing bromine and other possible feedstock materials.

On this basis, RPS has not included plant abandonment costs in its economic evaluation.

The following tables contain details on Albemarle’s annual capital by major components and operating costs by major cost centers for the 1P (Proved Reserves) and 2P (Proved + Probable Reserves) scenarios. Columns beyond year 2031 have been combined and the values under 2032+ correspond to the sum of the individual figures through year 2069. When applicable, like in the case of well counts, the reported number corresponds to the annual average number of wells between the years 2032 and 2069.


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Table 18‑1: Summary of Operating and Capital Expenses (1P Scenario)

Table 18‑2: Summary of Operating and Capital Expenses (2P Scenario)


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19ECONOMIC ANALYSIS

An economics model has been used to forecast cash flow from bromine production and processing operations to derive a net present value for the bromine reserves. As there is uncertainty associated with the input capital and operating cost estimates, the approximate midpoint of the range of uncertainty has been used as an input to the cash flow forecasts, in order to develop a single deterministic cash flow forecast and valuation for each of the reserve categories. Cash flows have been generated using annual forecasts of production, sales revenues, operating costs and capital costs. The cash flow model can generate forecasts in either “nominal dollar” (money of the day) or “real dollar” (2022$) terms. The salient features of the cash flow model include:

19.1Burdens on Production

The production leases include the following burdens:

a.Production Royalties:

–Oil: 12.5% of production

–Gas: 12.5% of gas sales revenues

–Solution gas: 12.5% of gas sales revenues

–Other minerals (except brine and minerals contained in brine): 10% of mineral sales revenue

–Brine: No production royalty

b.Production Lease Licences Fees:

–Lease Years 1, 2, 3, & 4: $1.00 per acre

–Lease Years 4 through 14: $10.00 per acre

–Lease Years 15 onward: $25.00 per acre

–For the purposes of lease licencing fees, the above lease fees have been superseded by the Arkansas Code, Title 15, Subtitle 6, Chapter 76 (15-76-315) which specifies that in lieu of royalty, an annual lease compensation payment of $32.00 per acre payable to the lease owner. This payment amount is indexed to the March 1995 US Producer Price Index for Intermediate Materials, Supplies and Components, then later the Producer Price Index for Processed Goods for Intermediate demand, which specifies that prices and costs are based on a datum cost base at March 1995 and are escalated annually based on the USA Producer Price Index. In 2021 the average lease cost was $63.28 per acre per year.

Production lease licence fees have been included in the fixed field operating costs.

19.2Bromine Market and Sales

Bromine produced from the Magnolia field is marketed and sold as both elemental bromine, as well as a constituent in a number of derivative products. The market value of the elemental bromine produced has been estimated from the historical records of elemental bromine sales revenues which the Company has supplied for analysis. Based on discussions with the Company, RPS has generated cash flow cases based on China Spot bromine price at December 31, 2021, with discounts of 0%, 15%, 30%, and 45% (Table 19-1) applied in order to produce a range of estimated values for the reserves. Prices are held flat for the full life of the production forecasts.


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Table 19-1: Price Forecast Summary


Bromine Price Forecasts $/tonne
Spot	Spot less 15%	Spot less 30%	Spot less 45%
$8,300	$7,055	$5,810	$4,565

19.3Capital Depreciation

Albemarle depreciates capital on a unit of production (“UOP”) basis. Based on the historical depreciation from the Albemarle PL statements, utilizing data from 2016 to 2020, RPS has utilized a UOP capital depreciation rate of $154/tonne

19.4Income Tax

Albemarle has advised RPS that its combined state and federal tax rate on income is 23.2%. RPS has utilized this rate in the economic cash flow calculations.

19.5Economic Limit

Using the bromine production forecasts, and above estimates of capital, operating, and G&A costs, RPS forecasts cash flow until the operating cash income becomes negative. At this point the field is deemed to have reached its economic limit of production. At that point, the field assumed to be shut in. In the following year of the cash flow forecast, all remaining production and injection wells are assumed to be abandoned, and the appropriate abandonment costs applied. The plant is assumed to not be abandoned, as per advice from Albemarle that the plant will continue operations, processing alternate bromine feedstock sources after the abandonment of the Albemarle field, and therefore no plant abandonment and reclamation costs are applied.

19.6Cash Flow and Net Present Value Estimates

With the above inputs, RPS has generated cash flow forecasts for the Proved and Proved + Probable reserves cases. The economic viability of the reserves is such that in both the Proved (1P) and Proved + Probable (2P) reserves cases, the economic limit is reached beyond 2069, which is the end of the production forecast. Therefore, for the integrity of this cash flow analysis, the field abandonment costs are applied in the year after the end of the production forecast, i.e., in 2070. Cash flow forecasts were run in real 2022$ terms. The results are summarized in the following tables:

Table 19-2: Albemarle Working Interest Bromine Reserves as of December 31, 2021 – Spot Prices


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Table 19-3: Albemarle Working Interest Bromine Reserves as of December 31, 2021 – Spot Prices less 15%

Table 19-4: Albemarle Working Interest Bromine Reserves as of December 31, 2021 – Spot Prices less 30%

Table 19-5: Albemarle Working Interest Bromine Reserves as of December 31, 2021 – Spot Prices less 45%

Per the NPV estimate analysis, the 10% discounted NPV of the Magnolia project is estimated to be between $1.72 billion and $4.92 billion for Proved reserves and between $2.18 billion and $5.94 billion for Proved + Probable reserves as of December 31, 2021, demonstrating that the operations are economic and supporting the estimation of reserves. The following Figure 19-1 and Figure 19-2 show the full distribution of the NPV range for each price forecast for Proved and Proved plus Probable reserves.


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Figure 19-1: Net Present Value Distribution of Proved Reserves by Price Forecast

Figure 19-2: Net Present Value Distribution of Proved + Probable Reserves by Price Forecast


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Summaries of the cash flow analysis on an annual basis are shown in the following tables. Columns beyond year 2031 have been combined and the values under 2032+ correspond to the sum of the individual figures through year 2069. When applicable, like in the case of well counts, the reported number corresponds to the annual average number of wells between the years 2032 and 2069.

Table 19-6: Annual Cash Flow Summary – Proved Reserves – Spot Prices


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Table 19-7: Annual Cash Flow Summary – Proved Reserves – Spot Prices less 15%


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Table 19-8: Annual Cash Flow Summary – Proved Reserves – Spot Prices less 30%


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Table 19-9: Annual Cash Flow Summary – Proved Reserves – Spot Prices less 45%


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Table 19-10: Annual Cash Flow Summary – Proved + Probable Reserves – Spot Prices


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Table 19-11: Annual Cash Flow Summary – Proved + Probable Reserves – Spot Prices less 15%


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Table 19-12: Annual Cash Flow Summary – Proved + Probable Reserves – Spot Prices less 30%


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Table 19-13: Annual Cash Flow Summary – Proved + Probable Reserves – Spot Prices less 45%


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20ADJACENT PROPERTIES

20.1Brine Producing Properties

Immediately east of the Albemarle property, in the west-southwestern portion of Union County, Arkansas, is a brine production venture operated by Great Lakes Chemical Corporation (“GLCC”) out of El Dorado, Arkansas. GLCC produces brine from the Smackover Formation through wells with depths ranging from 7400 feet to 8700 feet. The characteristics of the Smackover Formation are similar to those found to the west in Columbia County. GLCC has been producing brine in Union County since at least 1963. It has a plant located in El Dorado and is the only active operator in Union County currently producing brine.

Figure 20-1: Adjacent Properties

20.2Oil Producing Properties

There are both active and inactive oil fields within and adjacent to the Albemarle Magnolia Field property. The active oil fields within the outline of the property are Atlanta, Pine Tree, Village, Magnolia, Kerlin, and Columbia. All of these active fields, with the exception of the Pine Tree field produce reservoir fluids from horizons shallower than the Smackover Formation. Magnolia, Atlanta, and Pine Tree Fields all produce from the Smackover Formation with Magnolia being the most significant producing field within the confines of the Albermarle property. Two other oil fields in the area, the Big Creek and Kilgore Lodge Fields are inactive and have not produced in many years.

The active oil fields immediately adjacent to the Albemarle Property include McKamie-Patton, Grayson, Dorcheat-Macedonia, and Mt. Holly. These are all very mature fields that produce oil from the Smackover Formation. Dorcheat-Macedonia Field is the largest field outside the property outline with most of the current oil production coming from horizons above the Smackover. Oil production from Mt. Vernon Field ceased a few years ago and is currently inactive.


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Figure 20-2: Adjacent Oil Fields


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21OTHER RELEVANT DATA AND INFORMATION

This section is intentionally left blank, as there is no additional relevant data and information to be included in this section.


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22INTERPRETATION AND CONCLUSIONS

•The Albemarle Magnolia Field bromide production and processing operations in Columbia County, Arkansas, USA represent an ongoing viable commercial source of bromine, both historically and for the future.

•The portion of the Magnolia field, under bromide production lease contracts to Albemarle contains an original bromide in place (“OBIP”) resource of 13.6-15.0 million tonnes, of which Albemarle’s working interest share is 10.2-11.2 million tonnes.

•Albemarle operates two bromide processing plants which extract the bromine from the raw bromide production, which results in an overall bromide sales production to bromide raw production ratio averaging about 92.8% over life.

•The Smackover formation can be vertically subdivided into the upper Smackover, EOD 0-5, historically known as the Reynolds Oolite, and the lower Smackover, EOD 7-9, sometimes split into middle and lower in the literature. The reserves estimated in this report have been confined to the upper Smackover due to technology limitations. Based on current understanding, there may be additional volumes in the lower Smackover, which will likely require advanced technologies to unlock.

•The cumulative bromide production forecast to the effective date of this report (December 31, 2021) has been 4.06 million tonnes (raw) and 3.80 million tonnes (bromine sales), which represents 36% of Albemarle’s share of original bromide in place under leased areas.

•The Magnolia field is forecast to continue to produce bromide until 2069, with continued development of the proved and probable reserves.

•The forecast production of sales bromide is 2,497 thousand tonnes for the Proved reserves case, plus an additional 574 thousand tonnes of Probable reserves, for a total Proved plus Probable reserves of 3,071 thousand tonnes. The ultimate recovery at the end of this forecast represents a bromide recovery factor of 74% and 81% for the 1P and 2P cases respectively

•To maintain field bromide productivity and fully exploit the future reserves, in addition to maintaining the current production and processing operations, Albemarle will require an estimated capital investment of US$1.0 to $1.4 billion to develop the Proved reserves, with no additional capital required to develop the Probable reserves. These estimates are in Constant 2022 dollars and are exclusive of abandonment and reclamation costs.


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23RECOMMENDATIONS

The qualified persons contributing to this evaluation report offer the following recommendations:

1.Continue to operate the Magnolia field and bromine extraction plants with due regard to all environmental, safety, and social responsibility standards followed to date

2.Continue to assess future field development opportunities on the leased bromine lands, including opportunities for outstep drilling to optimize overall bromine recovery efficiency.

3.Implement a full electronic land and lease database management system to replace the current manual paper-based land records systems.

4.Maintain and update the geological static models if/when additional drilling data becomes available and continue to monitor the Magnolia field brine production reservoir performance utilizing reservoir simulation modeling technology to optimize production performance of the reservoir.


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24RELIANCE ON INFORMATION PROVIDED BY THE REGISTRANT

This report is based on information from a variety of sources, including data available in the public domain, various technical and commercial reference materials, and also information provided by the registrant. The sections of this report for which rely upon information provide by the registrant to a significant degree are summarized in the following table:

All such information provided by the registrant has been reviewed for consistency and deemed to be reasonable and reliable by the qualified persons conducting this evaluation.

Table 24-1: Reliance on Information Provided by the Registrant


Category	Report Item/ Portion	Disclose why the Qualified Person considers it reasonable to rely upon the registrant
Property Description	Section 3	The registrant holds the information on lease ownership. The QP crossed checked this information with lease information in the public domain.
Sample Processing, Analysis, and Security	Section 8 and Section 10.2	The registrant has sampling procedures in place, the description of which was accepted by the QP.
Data Verification	Section 9	Well logs, core analysis, production and sampling data on the project are owned by the registrant and were relied upon by the QP, in concert with using like data available in the public domain.
Mineral Processing and Metallurgical Testing	Section 10	The processing and testing methods used for the Magnolia operations were obtained from the registrant, then reviewed and deemed reasonable by the QP.
Mining Methods	Section 13	The brine extraction and bromine processing system and operations data is all proprietary to the registrant. This data was obtained by the QP from the registrant and deemed to be reasonable and reliable information.
Processing and Recovery Methods	Section 14	The brine extraction and bromine processing system and operations data is all proprietary to the registrant. This data was obtained by the QP from the registrant and deemed to be reasonable and reliable information.
Marketing information	Section 16.1	Market overview information obtained from Technavio, a market research company with expertise in the field.
Major Producers	Section 16.2	Major producer information was sourced from USGS Mineral Commodity Summary for Bromine. The USGS is considered by the QP as a reliable source of such data. The USGS canvasses very thoroughly the world mineral markets and its commodity specialists gather first-hand information from both producers and consumers of minerals.
Major Markets	Section 16.3	Information on major markets was sourced from Market Research Future, a source considered as reliable by the QP, as well as of gather publicly available market indicators.
Bromine Applications	Section 16.5	Albemarle provided information on bromine applications which was reviewed by the QP and considered reasonable. The QP also reviewed the public domain in order to obtain general information on bromine applications.


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REFERENCES

1 Fancher, George H., Mackey, Donald K., 1946, Secondary Recovery of Petroleum in Arkansas—A Survey, A report to the 56th General Assembly of the State of Arkansas under the auspices of the Arkansas Oil and Gas Commission

2 Sassen, Roger, 1989, Migration of Crude Oil from the Smackover Source Rock to Jurassic and Cretaceous Reservoirs of the Northern Gulf Rim: Organic Geochemistry, v. 14, no. 1, p. 51-60

3 Moldovanyi, Eva P., and Walter, L. M., 1992, Regional Trends in Water Chemistry, Smackover Formation, Southwest Arkansas: Geochemical and Physical Controls: American Association of Petroleum Geologists Bulletin, v. 76, p. 864-894

4 Arkansas Geologic Survey, 2020, Bromine (Brine): https://www.geology.arkansas.gov/minerals/industrial/bromide-brine.html

5 Science Views (2020): http://scienceviews.com/geology/bromine.html

6 McCoy, M., 2014: Betting on Bromine in Arkansas: Chemical Engineering News, v. 92 (21), p. 31-32

7 Salvador, Amos, 1991, Triassic-Jurassic; The Gulf of Mexico Basin: The Geology of North America Volume J, Boulder, GSA, p. 131-180

8 Dickson, K. A., 1968, Upper Jurassic stratigraphy of some adjacent parts of Texas, Louisiana and Arkansas: USGS Professional Paper 594E, p. 25

9 Sawyer, Dale S., Buffles, Richard T., and Pilger, Rex H., 1991, The Crust under the Gulf of Mexico, in A. Salvador, (ed.), The Gulf of Mexico Basin: Decade of the North American Geology, Boulder, GSA, p. 53-72

10 Ewing, T. E., Structural Framework, The Gulf of Mexico Basin: The Geology of North America Volume J, Boulder, GSA, p. 31-52

11 Wade, W. J., and C. H. Moore, 1993, Jurassic Sequence Stratigraphy of the Southwest Alabama: Gulf Coast Association of Geological Societies Transactions, v. 43, p.431-444

12 Heydari, E, William J. Wade, and Laurie C. Anderson, 1997, Depositional Environments, Organic Carbon Accumulation, and Solar-Forcing Cyclicity in the Smackover Formation Lime Mudstones, Northern Gulf Coast: AAPG Bulletin, v. 81, No. 5 (May 1997), p. 760-774

13 Akin, Ralph H. and Roy W. Graves, Jr., 1969, Reynolds Oolite of Southern Arkansas: AAPG, v.53, No. 9, p. 1909-1922

14 Moore, C. H. 1984, The upper Smackover of the Gulf rim: Depositional systems, diagenesis, porosity evolution and hydrocarbon production; In: W. P. Ventress. D. G. Bebout, B. F. Perkins, and C. H. Moore (eds.), The Jurassic of the Gulf Rim: Gulf Coast Section SEPM, 3rd Annual Research Symposium, Program and Abstracts, p. 283-307

15 Sassen, R. and Moore, C. H., 1988, Framework of Hydrocarbon Generation and Destruction in the Eastern Smackover Trend: AAPG, v. 72, no. 6, p. 649-663


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16 Heydari, E., and Lawrence Baria, 2006, A Conceptual Model for Sequence Stratigraphy of the Smackover Formation in North-Central U. S. Gulf Coast: The Gulf Coast Association of Geological Societies

17 Handford, C. R. and Baria, L.R., 2007, Geometry and seismic geomorphology of carbonate shoreface clinoforms, Jurassic Smackover Formation, north Louisiana. From Davies, R. J., Posamentier, H. W., Wood, L. J. and Cartwright, J.A. (eds) Seismic Geomorphology: Applications to Hydrocarbon Exploration and Production. Geological Society, London, Special Publications, 277, 171-185

18 Bishop, W.F., 1973, Late Jurassic contemporaneous faults in north Louisiana and south Arkansas: American Association of Petroleum Geologists Bulletin, v. 57, p. 566-580

19 Carpenter, A. B. and Trout, M. L, 1978, Geochemistry of Bromide-rich brines of the Dead Sea and Southern Arkansas: Oklahoma Geological Survey Circular 79, 1978, p. 78-88

20 Encyclopedia Britannica, 2020, https://www.britannica.com/science/bromine

21 Carpenter, A. B., 1978, Origin and Chemical Evolution of Brines in Sedimentary Basins: Oklahoma Geological Survey Circular 79, 1978, p. 60-77

22 Landes, K. K., 1960, The Geology of Salt Deposits, in Kaufman, D. W., Sodium chloride: Reinfold, New York, p. 28-69

23 Energy Information Association, https://www.eia.gov/state/?sid=AR#tabs-5

24 https://www.technavio.com/report/bromine-market-industry-analysis

25 https://www.marketresearchfuture.com/reports/bromine-derivatives-market-8060

26 CEIC, 2020. “China CN: Market Price: Monthly Avg: Inorganic Chemical Material: Bromine,” ceicdata.com, accessed September 18, 2020, from https://www.ceicdata.com/en/china/china-petroleum--chemical-industry-association-petrochemical-price-inorganic-chemical-material/cn-market-price-monthly-avg-inorganic-chemical-material-bromine

27 Albemarle Corporation, https://www.albemarle.com/blog/albemarles-first-wildlife-habitat-council-certified-site-magnolia-arkansas

28 Arkansas Oil and Gas Commission, http://aogc.state.ar.us/pages/default.aspx

29 Arkansas Energy & Environment, https://www.adeq.state.ar.us/water/permits/nodischarge/uic.aspx

30 USA Environmental Protection Agency (EPA) https://www.epa.gov/uic/underground-injection-control-well-classes

31 Arkansas Business, https://www.arkansasbusiness.com/people/aboy/768/albemarle-corp

32 Albemarle Corp, https://www.albemarle.com/sustainability


214554 \| MAGNOLIA FIELD BROMINE RESERVES AS OF DECEMBER 31, 2021 \| Final \| 26 January 2023

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