Stardust Power, the lithium producer owned by Connecticut-based VIKASA Capital, will seek to have completed an IPO or listing via SPAC by late 2023 or early 2024, VIKASA CEO and founder Roshan Pujari said in an interview.
Stardust is currently in the early stages of raising capital to build out its presence in the US and Europe, as reported by lnfralogic. The process is being run by VIKASA Capital.
VIKASA works with legal advisors Wilson Sonsini, Norton Rose Fulbright and Kirkland & Ellis, Pujari said. The firm is also acquiring the broker dealer of Connecticut-based boutique firm Stanwich Advisors.
Pujari confirmed the capital will be raised in tranches during 2023, rounding out at around USD 100m in a private placement. Additional capital markets financing, including a pre-IPO shared subscription service, is on the table as well.
Fundraising will be used to support a US-based refinery, M&A opportunities in brine assets and hiring, Pujari said.
Stardust is focused on aggregating supply by acquiring lithium brine assets and advancing a proposed lithium refinery in the US. The company has quietly lined up brine asset purchases in Nevada and Texas; it has an asset in Africa and is exploring Europe as well.
“The actual construction of these facilities can be up to 70% debt financed, some cases up to 75%:’ Pujari said.
The existing stock of aging SPAC entities is a market to which VIKASA could avail itself for Stardust. In the first two quarters of 2023, a lot of SPACs are set to expire, Pujari said, adding that it’s a market VIKASA knows well.
“For us it’s about finding the right one: the right team, the right underwriters:’ he said.
A Uniquely American Opportunity
The potential US lithium market is large, and fostering a collaborative ecosystem here is important to VIKASA, Pujari said.
“We need to increase production 20x to meet demand; in the future it could be as much as 40x:’ Pujari said. “We need more lithium companies in America.”
Stardust can look at greenfield opportunities, using proprietary analysis to determine if there are significant deposits of lithium, Pujari said. Existing brine assets (as differentiated from open pit mining), in which brine water is withdrawn via drilling and then reinjected after the lithium is extracted, are also attractive.
“There are other producers in this space, but they’re uniquely not American;’ Pujari said, explaining his belief that US lithium production is increasingly important to national security.
China controls up to 90% of world refining capacity, Pujari said. With the electrification of the global economy, the US had made strong regulatory push to domesticate a lithium industry.
The Inflation Reduction Act applies a 10% PTC to battery materials and critical minerals, including lithium, provided those materials are sold between 2023 and 2030. After that the credit begins to phase down in increments of 25% per year, expiring in 2032.
Pujari pointed to Piedmont Lithium, which has projects in Tennessee and North Carolina, and American Battery Technology, as peers in the US lithium space.
“We see 24 battery gigafactories being built in the United States, currently;’ Pujari said. “Where is all this lithium coming from?”
Restrictions on open pit mining have in part kept the lithium industry dormant in the US, but advances in brine technology could help change that.
Stardust is strongly considering Oklahoma for its refining site, Pujari said, noting that he grew up in the Oklahoma City region and that VIKASA has an office there. Tulsa is a contender as well.
VIKASA has fully committed its USD 50m Fund I for renewables assets, but has yet to commence fundraising for Fund II, Pujari said.
Fund II will focus on production of battery metals and be significantly larger, between USD 250m and USD 500m, he said.