Pilbara Minerals, Ganfeng in lithium study JV

West Perth company Pilbara Minerals and China-based Ganfeng have signed a deal to do a joint study over a 32 thousand tonnes per annum lithium conversion plant.

Pilbara Minerals today announced on the market that it has signed a binding term sheet with a subsidiary of Jiangxi Ganfeng Lithium, to complete a feasibility study estimated to be completed by the March quarter in 2025.

The feasibility study will consider the location and financial implications of a downstream facility to produce about 32 ktpa lithium carbonate equivalent of lithium chemicals, the ASX statement reads.

According to Pilbara Minerals, the production of the proposed plant will be sourced by about 300 ktpa of spodumene concentrate.

The study will also assess production of a potential intermediate lithium chemicals product in Australia, in a bid to reduce transportation volumes and carbon footprint.

If the companies proceed to the final investment decision stage, there will be a 50-50 equity ownership in the lithium chemicals joint venture, according to Pilbara Minerals’ announcement.

Pilbara Minerals managing director and chief executive Dale Henderson said Ganfeng was a long-standing customer of the company.

“Over the course of its 24-year history, Ganfeng has grown extensive global supply chain relationships with many of the major operators in this emerging battery materials industry,” he said.

“Ganfeng has also distinguished itself for its strong R&D capability and operating performance, especially for producing low cost and high-quality lithium chemicals.”

Mr Henderson said the feasibility study would provide an important first step and would enable the two companies to partner up in exploring a preferred location and optimal flowsheet for the proposed facility.

“This study-first approach provides Pilbara Minerals with the option, but not the obligation, to proceed with a lithium chemicals joint venture,” he said.

“This is a prudent approach to ensure Pilbara Minerals only proceeds with a joint venture if the investment case is sufficiently compelling.”

Ganfeng president and vice chairman Wang Xiaoshen said Pilbara Minerals was a trusted partner that has proved to be a capable lithium concentrate supplier over the past six years.

“Further, the two companies share strong alignment in our growth ambitions, and we have considerable strengths we can leverage through working together,” he said.

“This feasibility study marks an important step as we jointly pursue the best growth opportunities.

“We look forward to working with Pilbara Minerals to leverage our expertise in lithium chemical conversion to develop the investment case for a globally competitive lithium chemicals joint venture to service leading customers in the lithium-ion supply chain.”

Ganfeng is listed on the Shenzhen and Hong Kong stock exchanges.

Despite the announcement, shares in Pilbara Minerals were trading down 0.77 per cent, at $3.88 each as of 4.10pm AEDT.