Lithium momentum continues in Pilbara, South West

Western Australia continues to evolve into a globally significant energy metals province, with Pilbara Minerals securing funding to support a second stage of its Pilgangoora lithium mine in the north of the state, while US chemicals giant Albemarle Corporation has begun work on its $1 billion lithium hydroxide facility near Bunbury.

In a statement to the ASX today, Pilbara announced it had received the capital it required for a $231 million stage-two expansion of its Pilgangoora lithium-tantalum project, which is located 120 kilometres south of Port Hedland.

The West Perth-based company tapped Chinese-based Great Wall Motor Company and Jiangxi Gangfeng Lithium, as well as existing lenders, for a combined $156.4 million to increase capacity at the Pilgangoora project, which is located 120 kilometres south of Port Hedland, to 5 million tonnes per annum.

The $74.6 million balance will be drawn from Pilbara’s existing reserves and future cash flow from the first stage of the Pilgangoora project.

The company also announced today it had signed a non-binding memorandum of understanding with South Korean steel maker POSCO to assess the expansion of a proposed jointly-owned lithium refinery plant in South Korea.

The two companies had formerly approved a 30 kilotonnes per annum facility, but will now evaluate increasing capacity by 10ktpa due to strong consumer demand.

Pilbara Minerals’ chief executive Ken Brinsden said the stage-two expansion would position the company as a world-leading lithium producer.

“Upon completion of the expansion by the March quarter of 2020, Pilgangoora will be elevated to an annualised production rate of up to 850,000tpa of spodumene concentrate, putting us firmly on track to become one of the world’s major global lithium raw material producers,” Mr Brisden said.

“Our key customers have recently visited site and they clearly like what they have seen.

“At the same time, they have made it clear that they would like to see the project grow further, prompting us to undertake studies to evaluate a potential stage-three expansion to at least 6.2Mtpa and potentially up to 7.5Mtpa, as part of the engineering work currently contributing to our stage-two project.”

Yesterday Albermarle, the joint venture partner in the Talison Lithium Greenbushes mine, announced it had commenced works at its $1 billion lithium hydroxide plant at Kemerton, located 17 kilometres north-east of Bunbury, after it received final approvals from the federal government.

The Kemerton plant would have an initial capacity of 60,000 metric tons of lithium hydroxide, with an ability to eventually expand to 100,000 metric tons.

The project is expected to create 500 jobs during construction and another 500 permanent positions when it reaches operational capacity in 2021.

Albemarle president Eric Norris said the site earthworks commencing at Kemerton aligned with the company’s projections.

"Achieving this milestone underscores our commitment and confidence in developing LiOH operations in Western Australia and in our overall strategy to drive significant shareholder value and meet our customers' demands," Mr Norris said.

Shares in Pilbara Minerals were up 17.6 per cent to trade at 73 cents each at 12.40pm AEDT