Pilbara Minerals is moving forward with the stage two expansion of the Pilgangoora lithium-tantalum operation in Western Australia after its board approved the project.
The approval will pave the way for Pilbara Minerals to secure regulatory approvals and to fulfill the remaining balance of project funding to propel Pilgangoora into a 5 million tonne a year (Mt/y) operation.
Pilgangoora will deliver more than 800,000t/y of high quality spodumene concentrate once it has been expanded.
Pilbara Minerals anticipates the final investment decision to conclude this quarter, as it continues working with bondholders and offtake partners.
Managing director Ken Brinsden said, “Against a backdrop of significant demand growth for lithium raw materials over the coming decade, the quality and scale of the resource at our Pilgangoora project demands further expansion.
“This will ensure it becomes a mainstay in the next generation of large-scale, low-cost mines to support the significant growth in downstream lithium hydroxide capacity.”
Long-lead orders for stage two expansion equipment have been placed to meet its commissioning schedule in the December quarter of 2019.
Further orders will be placed in the coming weeks, while Pilbara Minerals also proceeds with detailed engineering.
Pilbara minerals has made progress with a number of funding alternatives including debt and/or offtake prepayment funding from customers linked to accessing stage two product.
The company has secured an offtake agreement with a leading Chinese supplier of lithium and materials, General Lithium, over a period of six years.
It has also entered into an offtake agreement with one of China’s largest pickup and sport-utility vehicle manufacturers, Great Wall Motor Company, with prepayment of up to $US50 million ($69 million), propping up Pilgangoora’s stage two expansion.
Brinsden said, “In much the same way as we got on with the job in stage one, we will work to the same tune in stage two.”
Pilbara Minerals completed the second shipment of spodumene concentrate from Pilgangoora last month.