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Demand continues for Pilbara DSO lithium

25 Jan 2018 12:23 GMT
Demand continues for Pilbara DSO lithium

Perth, 25 January (Argus) — Australian lithium developer Pilbara Minerals continues to receive significant enquiries for direct shipping ore (DSO) from its Pilgangoora lithium-tantalum project in Western Australia.

"We are seeing exceptionally strong demand for direct shipping ore products due to the current shortage of lithium units in China," chief executive Ken Brinsden said.

Last month Pilbara Minerals signed a direct DSO agreement to provide early cash flow for its Pilgangoora project. This is expected to start production in the second quarter and offtake deliveries in the third quarter of this year.

Through a Mine Gate Sale Agreement it will supply a minimum of 1.0mn t and a maximum of 1.5mn t of lithium-containing ore to Atlas Iron. Atlas will crush the ore and export it to Chinese lithium processing companies.

Exports are expected to average 100,000 t/month from the June quarter of 2018. The direct shipping ore agreement will enable it to capitalise on the steep demand for lithium feedstock in the Chinese market and generate early revenue for Pilgangoora.

"We are delighted to have the opportunity to participate in this market segment through the landmark DSO deal with Atlas Iron, which allows us to help support the growth of the lithium-ion processing chain in China and generate early cash flow in parallel with the commissioning phase at Pilgangoora," Brinsden said.

During the December quarter the company signed a two-year offtake agreement to supply 100,000lbs of tantalum oxide to Global Advanced Metals Greenbushes, a subsidiary of leading tantalite products firm Global Advanced Metals.

Pilbara has a lithium concentrate offtake agreement for stage one of its Pilgangoora project. In the December quarter it finalised an offtake agreement with China's Great Wall Motor Company for output from stage two of the project.

First stage concentrate output is expected to be 330,000 t/yr from 2.0mn t/yr of ore. Output will rise to 800,000 t/yr from 5mn t/yr of ore if a go-ahead is given for a second stage.