PERTH (miningweekly.com) – Lithium developer Pilbara Minerals has finalised an offtake agreement with Chinese vehicle manufacturer Great Wall Motor Company for 75 000 t/y of chemical grade spodumene concentrate from the Stage 2 development of the Pilgangoora lithium/tantalum project, in Western Australia.
The offtake agreement will run over an initial five-year term, with the ability to be extended to a further ten years through two five-year options.
The Chinese firm also had the opportunity to secure a further 75 000 t/y Stage 2 offtake by providing Pilbara with $50-million of debt financing for the Stage 2 expansion, either through debt or an offtake prepayment facility.
Meanwhile, Great Wall has also completed its A$28-million equity investment in Pilbara Minerals, with the company saying on Monday that the funds would contribute towards the completion of the Stage 1 project development, as well as financing the Stage 2 definitive feasibility study.
Pilbara MD and CEO Ken Brinsden said on Monday that the company was pleased to have formalised the multifaceted agreement with Great Wall, saying it cemented the Chinese company’s position as a cornerstone offtake and funding partner for the long-term growth of the Pilgangoora project, beyond the Stage 1 development currently under construction.
“The conclusion of this deal heralds a new age in the lithium-ion raw materials supply chain and is the first of what we anticipate will be a number of direct investments into suppliers of lithium raw materials by end-users and manufacturers.
“The deal will contribute additional funding towards completion of the Stage 1 development, while at the same time allowing us to pursue a fast-track growth strategy via the Stage 2 expansion.”
The proposed Stage 2 expansion would double output from the Pilgangoora project to four-million tonnes a year, resulting in spodumene concentrate production increasing from 314 000 t/y to 564 000 t/y over the current life-of-mine.