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PERTH (miningweekly.com) – The definitive feasibility study (DFS) for the Stage 2 expansion of the Pilgangoora lithium/tantalum project, in Western Australia, has made a compelling case for the development, said ASX-listed Pilbara Minerals.
The Stage 2 operation will see an additional three-million-tonne-a-year processing circuit added to the existing Stage 1 operation, taking the project capacity to five-million tonnes a year.
The DFS has estimated that the expansion project would require a capital investment of A$231-million to underpin the new processing train and tantalite dressing facility, along with upgrades to power station and water supply borefields to support the expanded operation.
The Stage 2 expansion will increase production from 314 000 t/y, to between 800 000 t/y and 850 000 t/y of high-quality spodumene concentrate over a mine life of 17 years.
The expanded project delivered an estimated post-tax net present value of A$2.16-billion, and life-of-mine revenues of A$12.2-billion and life-of-mine earnings before interest, taxes, depreciation and amortisation of A$6.3-billion.
“We continue to be impressed by the quality and scale of the Pilgangoora project. The long life of the operation and its ability to deliver high-quality spodumene concentrate at a low cost to market is what sets us apart globally,” said Pilbara MD and CEO Ken Brinsden.
“This and our ability to rapidly scale up spodumene concentrate production to over 800 000 t/y plays perfectly into our downstream value adding strategy of continuing to grow with our customers and supports the proposed joint venture with POSCO.”
Brinsden said that the expanded Pilgangoora project would position Pilbara to meet the surging demand for lithium raw materials globally, particularly through north Asia.
He added that the encouragement from the company’s cornerstone customers and strategic partners to expand the project, had also been great.
“These highly experienced partners know the market and their ongoing support, particularly with Stage 2 financing, is a clear demonstration of the strong future demand for lithium and the high quality of the Pilgangoora project,” Brinsden said.
Pilbara Minerals has executed long-term offtake agreements for both the Stage 1 and Stage 2 project. A provision of up to $100-million of pre-payment or debt financing is also in place, which will contribute towards the funding of the Stage 2 project.
A final investment decision will now be sought from the Pilbara board, and is expected in late September. Construction would start around mid-November, and commissioning and first production is targeted for late in the fourth quarter of 2019.