Pilbara clears Pilgangoora lithium project expansion

The board of directors of Australian lithium producer Pilbara Minerals has approved the stage two expansion of its Pilgangoora project in Western Australia (WA), paving the way for its lithium concentrate output of over 800,000 t/yr.

Subject to the finalisation of funding and environmental approval targeted for the end of this year, the second stage is expected to be commissioned from the fourth quarter of 2019 at a capital cost of A$231mn ($166mn), the company said.

Pilbara is currently ramping up the first stage of Pilgangoora that has capacity for 330,000 t/yr from the processing of 2mn t/yr of ore. The second stage will see ore treatment rise to 5mn t/yr and increase life of mine revenue to A$12.2bn over a 23-year period. This 150pc increase in production will result in lithium carbonate equivalent output of around 100,000 t/yr.

The first stage has offtake agreements with China's General Lithium and Ganfeng Lithium, while the second stage has offtake arrangements with Ganfeng Lithium, Great Wall Motors and South Korea's Posco. This connects the Pilgangoora project to the entire lithium supply chain of chemical conversion, battery grade lithium carbonate and hydroxide, cathodes, cells, battery packs and electric vehicles.

Pilbara said it aims to be in the world's top three lithium raw material producers by 2020 through the development of Pilgangoora's mineral resource of 226mn t grading 1.27pc lithium oxide and 116 parts per million tantalite pentoxide.

The company is also developing a downstream strategy in South Korea and China. It has an option for a joint venture with Posco on developing a lithium hydroxide plant in South Korea.

"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 that it becomes a mainstay in the next generation of large-scale, low-cost mines to support the significant growth in downstream lithium hydroxide capacity," chief executive Ken Brinsden said.

Pilbara has shipped its second load of lithium concentrate to China grading 6.3pc lithium oxide after maiden production of 11,814t in the July-September quarter. It also produced 16,891lbs of tantalite grading above 5pc primary concentrate and has started regular tantalite deliveries to customers for applications in the electronics, medical and aerospace industries.

Fellow Australian lithium producer Altura Mining, which also has its flagship project in the Pilgangoora region, is expected to announce its final investment decision on doubling capacity from 220,000 t/yr to 440,000 t/yr through the addition of a second stage. Pilbara and Altura are exporting their first stage lithium concentrate to China from the WA port of Port Hedland.