Pilbara Minerals has signed an offtake agreement to supply crushed but not processed direct shipping ore (DSO) to Chinese lithium producer Shandong Ruifu.
This will help finance and boost the development of Pilbara Mineral’s Pilgangoora Lithium-Tantalum project in WA, with mining expected to begin ahead of schedule in the second quarter of 2017.
DSO will be supplied from Pilgangoora or the company’s adjoining Lynas Find lithium project once the acquisition is approved.
These are expected to be delivered to China as early as July next year.
Under the agreement, Pilbara Minerals will supply 1.9 million tonnes of unprocessed ROM product over two years. It also includes a $US10 million pre-payment to be provided to Shandong Ruifu for construction and mine start up costs.
Pilbara Minerals managing director Ken Brinsden said the deal fast-tracked Pilgangoora’s development.
“This will provide the opportunity to mobilise the mining fleet earlier than had been otherwise planned, accelerate the development of the open pit, construct the tailings facility, and prepare the ore stockpiles for subsequent process plant commissioning,” he said.
He added that the targeted shipments will also give the company an opportunity to generate early revenue.
Both companies are in talks for another offtake agreement involving the supply of spodumene concentrate in 2018.