A $207 million expansion to more than double the capacity of Pilbara Minerals' Pilgangoora project could get under way as early as this year, after a pre-feasibility study released today delivered positive results.
A $207 million expansion to more than double the capacity of Pilbara Minerals' Pilgangoora project could get under way as early as this year, after a pre-feasibility study released today delivered positive results.
The first stage of the project, which will have capacity of 2 million tonnes of ore per annum, is currently under construction, with commissioning projected to begin around May.
Stage two would bring capacity up to 5mtpa of ore, which would mean an output of about 800ktpa of lithium concentrate and 780,000 pounds of tantalite, a mineral which contains the metal tantalum.
There were offtake agreements in place for about three quarters of that lithium output, the company said.
Pilbara said a definitive feasibility study was under way, due in mid-2018, with a final investment decision due in the September quarter.
Construction would start by the final quarter of 2018, with commissioning at the end of 2019.
It follows an original pre-feasibility study released in September 2016 that had approved an increase in capacity to 4mtpa, or about 564,000 tonnes of concentrate, at a cost of $128 million.
The pre-feasibility study released today found the project had a net present value after tax of about $2 billion.
Pilbara managing director Ken Brinsden said the results were compelling.
“The exponential growth which is occurring across the lithium-ion supply chain as the industry in China and elsewhere gears up for transformational growth to meet demand from the automotive and energy storage sectors is now becoming better understood,” he said.
“It was against this backdrop that we commenced the stage two expansion studies at Pilgangoora last year in parallel with construction of the stage one, 2mtpa project.
“The logic of this accelerated expansion strategy was underpinned both by the remarkable growth occurring in the market and the extraordinary success of our exploration team in growing the Pilgangoora ore reserve base to a level which underpinned a mine life of more than 40 years at the 2mtpa production rate.
“An expansion to 5mtpa was deemed to be the optimal production rate to unlock further value in the deposit and maximise the financial returns to shareholders.
“This decision has been fully vindicated by the pre-feasibility study results, which have shown a significant improvement in several key areas compared to the 2mtpa operation currently being constructed.”
Other lithium projects are expanding or considering expansion.
The world's largest hard rock lithium producing mine, Greenbushes, will double capacity under owners Tianqi Lithium and Albemarle Corporation, while Altura Mining's Pilgangoora project could have capacity doubled pending a feasibility study due in April.
Shares in Pilbara Minerals were 8.2 per cent higher at 86 cents each at the time of writing.
