JOHANNESBURG (miningweekly.com) - ASX-listed Atlas Iron has signed an agreement with Sinosteel Australia for the export of lithium direct shipping ore (DSO) sourced from the Pilgangoora lithium project, which is owned by ASX-listed Pilbara Minerals.
Atlas will sell up to 1.5-million tonnes of lithium DSO to Sinosteel over a 15-month period on a fixed priced basis. However, as part of the arrangement, Sinosteel will advance funds to cover prepayments owed to Pilbara Minerals for DSO mine development costs.
Pilbara Minerals has begun an expedited mining programme for the lithium DSO, with Atlas processing and transporting the ore using its existing infrastructure, including its Mt Dove crushing hub and Utah Point facilities.
Atlas will prepare its logistics chain to handle lithium DSO at a very low capital cost and without affecting current iron-ore production.
After allowing for payments to Pilbara Minerals and its own costs, Atlas expects to generate an operating margin of between $15/t and $20/t.
Atlas is on track to satisfy remaining conditions precedent in coming weeks to allow first exports to begin in the June quarter.