Pilbara to fast-track Pilgangoora development as new investor comes to play
JOHANNESBURG (miningweekly.com) - The multi-faceted agreement signed between South Korean steelmaker Posco and Australian lithium miner Pilbara Minerals this week would strengthen the latter's balance sheet, allowing it to accelerate Stage 2 and complete Stage 1 of its Pilgangoora project in Western Australia, the miner said on Wednesday.
Posco agreed to buy up to 240 000 t/y of lithium concentrate from the mine, using the commodity to help supply producers of electric vehicle batteries. As part of the deal, the Australian unit of Posco would acquire a 4.75% stake in Pilbara for A$79.6-million.
The binding life-of-mine agreement would see an initial 80 000 t/y of chemical-grade spodumene concentrate being delivered from the five-million-tonne-a-year Pilgangoora Stage 2 project, increasing to 240 000 t/y upon Pilbara's joint venture participation in a downstream 30 000 t/y lithium carbonate/lithium hydroxide conversion plant in South Korea.
Posco is rapidly expanding its capabilities in the production of battery grade products and cathode materials for the burgeoning battery materials market in the Asian region. The company plans to make about 30 000 t/y of lithium products starting from 2020.
"[This investment] introduce[s] a quality new cornerstone investor to our register, [which] further diversifies our spodumene concentrate sales portfolio," said Pilbara Minerals MD and CEO Ken Brinsden.
This deal further provided the basis to effectively transforming Pilbara into a vertically integrated producer of lithium-ion battery materials - helping to achieve one of the miner's key longer-term growth objectives and allowing it to capture value across both the mining and downstream processing stages of the raw materials supply chain.
"We see Posco as a strong and reliable long term partner with who we can proceed in joint venture in downstream processing to supply the rapidly growing North Asian markets - where the pace of expansion of the lithium-ion battery sector is probably not fully appreciated by Western analysts," added Brinsden.
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