PERTH (miningweekly.com) – The federal government will commit up to A$250-million in loans to support lithium producer Pilbara Mineral’s Pilgangoora operations, in Western Australia. 

The support consists of a A$125-million loan each from the Northern Australia Infrastructure Facility (NAIF) and Export Finance Australia (EFA), which will sit alongside commercial bank financing for their operations.  

The funding will be used on the P680 expansion project to the Pilgan plant, delivering an additional 100 000 t/y of spodumene concentrate production at an estimated capital cost of A$103-million.

Funding would also go towards the construction of the five-million-tonne-a-year crushing and ore sorting facility that will replace the existing contracted crushing facility and will facilitate future expansions that could ultimately deliver up to one-million tonnes a year of spodumene concentrate capacity across the entire Pilgangoora operation, at a capital cost of A$194-million.

The new five-million-tonne-a-year crushing plant and ore sorting facility is expected to be completed and begin commissioning in the December quarter of 2023.

Once completed, the expansion is expected to increase the combined total production capacity for the Pilgangoora project to approximately 640 000 t/y to 680 000 t/y a year, earning the project the name of the P680 project.

The project is estimated to create 355 jobs each year in the first two years of construction and an additional 320 jobs each year on average during operation.

Minister for Resources and Northern Australia Madeleine King said this was another example of how NAIF-funded projects were supporting the government’s net zero agenda.

“The global path to net zero runs through the Australian resources sector and producing battery materials is a vital contributor to a lower carbon economy,” King said.

“The NAIF has now made financing commitments of A$3.87-billion to projects across Northern Australia, with around A$1.9-billion of that in Western Australia. 

“In total the projects across Western Australia are forecast to support more than 6 380 jobs and deliver more than A$17.4-billion in economic impact, which will be transformational.”

Minister for Trade and Tourism Don Farrell said the loan demonstrated the important role EFA played in supporting Australian critical minerals exporters to pursue global opportunities.  

“The Australian government is delivering game-changing finance for Australia’s critical minerals sector,” Farrell said. 

“Projects like Pilbara Minerals’ Pilgangoora operations are helping to accelerate the global uptake of renewable technologies and reduce carbon emissions.

“EFA is playing a vital role in supporting the government’s net zero agenda and the critical minerals sector, with over A$1.6-billion in finance approved for critical minerals projects to date.”

The NAIF loan will be provided via the Western Australian government. The EFA loan is being provided on its Commercial Account. EFA also administers the A$2-billion Critical Minerals Facility on the National Interest Account.

As part of the funding commitments, NAIF will continue to work with Pilbara Minerals on delivery of their Indigenous Engagement Strategy, to ensure positive indigenous employment and cultural outcomes are achieved. Provision of NAIF and EFA loans is subject to all regulatory approvals and financing conditions being met. 

“We are extremely pleased to have received notice of the funding approvals from both EFA and NAIF. The continued support from the Australian government is a significant endorsement for Pilbara Minerals, an Australian company that is a major player in the growing global lithium supply chain and demonstrates the Australian government’s commitment to our domestic critical minerals industry,” said Pilbara MD and CEO Dale Henderson.

“We look forward to continuing to work with the Australian government as we pursue our growth and diversification strategy to further realise our ambition to become a fully integrated, sustainable battery materials supplier.”