Thanks to recent financing developments with Chinese and South Korean companies, Pilbara Minerals is advancing its expansion plans for the Pilgangoora lithium-tantalum project in Western Australia.
Pilbara Minerals is steadily becoming one of the world’s leading producers of lithium raw materials, managing director and CEO Ken Brinsden said two Chinese investors will provide about 37% of capital investment in the $231 million second phase of the Pilgangoora expansion project.
The Great Wall Motor Company has agreed to provide Pilbara Minerals with $25 million pre-payment facility in exchange for an additional 75,000 tonnes/year of spodumene concentrate from the second phase of the Pilgangoora project. On the other hand, Great Wall subscribed for 3.47% of the issued shares of Pilbara with a stake of A$28 million.
Located 120 kilometers from Port Hedland, the plant positions itself as a key supplier to China’s growing and lucrative electric vehicle industry.
At the same time, Pilbara Minerals and Jiangxi Ganfeng Lithium Co. have agreed to sign a $50 million equity placement subscription agreement to enable the latter to receive an additional 75,000 tonnes/year of the second phase.
In a subscription agreement with Ganfeng, Pilbara Minerals also agreed to provide a further 50,000 tonne/year of spodumene concentrate to Ganfeng from third-phase expansion in exchange for a pre-payment facility of no less than $20 million.
Meanwhile, Pilbara Minerals and South Korea company Posco have signed a non-binding agreement that could lead to the expansion of a proposed joint venture chemical plant using spodumene material from Pilgangoora. It is expected that Pilbara Minerals will hold 30% of its shares in the joint venture with Posco.
According to a memorandum of understanding between the two companies, Pilbara Minerals’ annual plan to supply 30,000 tonnes of lithium carbonate equivalent (LCE) will be expanded by 25% to 40,000 tonnes of LCE.
To adapt to the future business, Pilbara Minerals has proposed to increase the annual life-of-mine (LOM) production of Pilgangoora from the current 240,000 tonnes per year to 315,000 tonnes per year, which is consistent with the company’s second phase of financing and the third phase expansion plan.
The second phase of the expansion is scheduled to be completed in the March quarter of 2020.
In addition to completing the second phase of financing, Pilbara Minerals is also considering the third phase of expansion, further increasing production capacity to 6.2 million tonnes per year, and finally reaching 7.5 million tonnes per year.