Pilbara Minerals locks in Great Wall as lithium investor

Mid-tier lithium companies like Pilbara Minerals have shown growth. Image: Pilbara Minerals

Lithium developer Pilbara Minerals has finalised an off-take agreement and $28 million equity subscription with Chinese automotive manufacturer Great Wall to underpin the stage two expansion of its Pilgangoora project in Western Australia.

The agreement represents the first direct investment by an automobile manufacturer into an Australian upstream supplier of lithium raw materials.

The off-take agreement involves 75,000 tonnes per annum (tpa) and up to 150,000tpa of stage two chemical grade spodumene in return for stage two debt financing support and a $28 million equity subscription for Pilbara Minerals’ shares.

Pilbara Minerals managing director and chief executive Ken Brinsden said the agreements cement Great Wall’s position as a cornerstone off-take and funding partner for the long-term growth of the Pilgangoora project beyond the stage one development.

“The conclusion of this deal heralds a new age in the lithium-ion raw materials supply chain and is the first of what we anticipate will be a number of direct investments into suppliers of lithium raw materials by end-users and manufacturers,” Brinsden said.

“The deal will contribute additional funding towards completion of the stage one development, while at the same time allowing us to pursue a fast-track growth strategy via a stage two expansion.”

Brinsden believes Great Wall clearly shares the company’s view about the transformational changes occurring in the lithium-ion supply chain globally, and particularly in China.

“They are willing to make a significant upfront commitment to guarantee access to quality long-term supply of the critical raw material which they require to support their long-term growth plans,” he said.

The Pilgangoora deposit, one of the world’s largest lithium-tantalum hard rock resources, has measured, indicated and inferred resources of 156.3 million tonnes at 1.25 per cent Li2O (lithia) and 128ppm Ta2O5.

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