PERTH (miningweekly.com) – Lithium miner Pilbara Minerals has declared commercial production of the Stage 1 operation at its Pilgangoora project, in Western Australia, with the company also looking for a partner to invest at the project level.

The ASX-listed miner said that the declaration of commercial production followed on from sustained spodumene concentrate production during the first six months, with more than 111 199 t of saleable product produced to date in 2019.

For the March quarter, Pilgangoora is estimated to produce between 47 000 t and 52 000 t of spodumene concentrate.

“The declaration of commercial production after six months of material production and sales marks another important step in the development of the world-class lithium raw materials production center at Pilgangoora and for the Pilbara Minerals team,” said MD and CEO Ken Brinsden.

“The rapid delivery from first drill hole, through construction and now commercial production of the first large scale hard-rock lithium mine to be developed in Western Australia after Greenbushes, with both coarse and fines production, is a testament to the hard work and dedication of the team involved.”

Brinsden said that Pilbara was now working on fine-tuning and balancing a number of aspects at the plant, in order to achieve recovery levels of 75%, while working towards achieving 100% of the production design capacity of two-million tonnes a year during 2019.

Meanwhile, Pilbara on Thursday also announced that it has started the partnering process to consider offtake for the Stage 3 development of the Pilgangoora project, following a positive scoping study into the expansion.

The Stage 3 expansion would increase output at Pilgangoora from the Stage 2 production of between 800 000 t/y and 850 000 t/y of high-quality spodumene concentrate, to some 1.2-million tonnes a year of spodumene concentrate and 1.1-million pounds a year of 3% tantalite concentrate, by enlarging the processing capacity to 7.5-million tonnes a year.

The Stage 3 operation is expected to have a mine life of some 15 years, based on the existing reserves.

The scoping study estimated that the Stage 3 expansion would require an incremental capital cost of A$225.8-million, and would result in a post-tax net present value of A$3.73-billion, life-of-mine (LoM) revenues of A$16.6-billion and LoM project earnings before interest, taxes, depreciation and amortisation of A$10.3-billion.

Pilbara told shareholders on Thursday that the partnering process would look to divest of a minority interest in the project of between 20% and 49%, with the outcome of the partnering process expected in mid-2019.

The company said that it would only introduce a partner to Pilgangoora if it would enhance the value of the project, and support the company’s strategy and growth aspirations.

“The Pilgangoora project’s tier 1 status means that it is attracting significant interest from participants across the global lithium-ion supply chain, and we believe this interest has the potential to be converted into a transaction that can help support the long-term growth of our business,” said Brinsden.

“Several recent transactions in the global lithium industry have highlighted the substantial value that can be unlocked through introducing strategic partners to product offtake and project level interest.

“With production of high quality spodumene concentrate well under way and significant plans to expand production from the current two-million tonnes a year up to 7.5-million tonnes a year, Pilgangoora is a world-class, low-cost asset which is expected to play a major role in the rapidly growing electric vehicle and energy storage markets.”

The partnering process is designed to support Pilbara in potentially funding to the Stage 2 and the proposed Stage 3 expansion of the Pilgangoora project, as well as supporting further growth in the company’s downstream initiatives.

It could also introduce additional technical expertise as Pilbara considered a second chemical conversion facility in response to increasing global demand for battery-grade lithium hydroxide and carbonate.

Brinsden said that the partnering process would not have an impact on the company’s existing offtake customers.