The cost of transportation and production will be retrieved from sales of lithium hydroxide. Australia-based Alliance Mineral Assets Limited has reportedly announced that it has signed a memorandum of understanding (MoU) with China-based Jiangxi Special Electric Motor Co., Ltd (Jiangte) to form a joint venture which will produce and sell the battery-grade lithium hydroxide. Under the MoU, both the companies will equally cooperate in the joint venture. Reportedly, Alliance will get an opportunity to participate in the market of downstream lithium products within the next 6-12 months with the help of hydroxide JV. Alliance will leverage this opportunity without incurring capital costs and no exposure to risk associated with the construction of a conversion facility. Reportedly, Bald Hill Mine will continue to be owned and operated by Alliance. The company will supply spodumene to the JV. The cost of transportation and production will be retrieved from sales of lithium hydroxide. The hydroxide JV will sell the lithium hydroxide to third-parties produced by processing spodumene, contributed by Alliance, at the Converter. Long-term downstream collaborations will be developed by the joint venture for battery-grade lithium carbonate and lithium hydroxide. After the recovery of respective costs of production and conversion of spodumene, Jiangte and Alliance will reportedly share equal margins in the sales of lithium hydroxide. There will be specific terms of cost recovery to be formalized in the JV agreement. For the year 2019 and 2020, concentrate requirements for the JV are anticipated to represent around 20 percent of Bald Hill production. The fully operational Converter will process nearly 100,000t of spodumene annually. It will have capacity of producing up to 15,000tpa of lithium hydroxide. Profit margin per ton of spodumene concentrate is anticipated to improve significantly when it will be processed under the JV, compared to selling raw spodumene concentrate For the record, Jiangte holds 6.4 percent share in Alliance through its 100 percent owned subsidiary Weier Antriebe und Energietechnik GMBH.   Source credit: https://www.benzinga.com/pressreleases/19/04/a13612969/alliance-signs-mou-for-downstream-jv-to-produce-and-sell-lithium-hydroxide https://www.allianceminerals.com.au/wp-content/uploads/2019/04/02099425.pdf