Photo by: Bloomberg
PERTH (miningweekly.com) – Lithium miner Pilbara Minerals on Monday reported that its joint venture (JV) with Korean major POSCO, POSCO Pilbara Lithium Solution Co, had executed a $460-million debt facility with Korean government-owned banks.
The debt facility represents the balance of the total funding requirement for the development and commissioning of the 43 000 t/y lithium hydroxide monohydrate (LHM) chemical facility currently under construction in Gwangyang, South Korea.
“We are delighted that the JV has secured this debt funding from leading Korean banks on commercially favourable terms, positioning the POSCO Pilbara JV company to complete construction and commissioning of its new 43 000 t/y lithium hydroxide chemical conversion facility in South Korea,” said Pilbara MD and CEO Dale Henderson.
“Construction of this world-class facility is already well underway, with the first train of 21 500 t/y scheduled to start commissioning from late this year, followed by commissioning of the second 21 000 t/y train in the March 2024 quarter.
“Our 18% interest in the POSCO Pilbara JV (with an option for Pilbara to increase to 30%) represents a key element of Pilbara Minerals’ downstream processing strategy, enabling the company to become an integrated lithium raw materials company.
“Building on our strong relationship with POSCO, we are delighted to be jointly establishing a strong foothold in South Korea’s emerging battery materials industry at the doorstep of established major battery manufacturers.”
The debt facility, which has a seven-year term and repayments commencing two years from drawdown, comprises both a fixed and variable interest rate.
The debt facility represents the remaining 60% of the forecast funding required for the development of the chemical facility, with JV parties having previously funded their equity share. The debt facility is non-recourse to Pilbara Minerals, with the security provided by the POSCO Pilbara JV company and limited to the land, building, plant and equipment of the chemical facility.
The debt facility comes shortly after Pilbara Minerals reported a record half-year operating performance, for the six months ended December.
Spodumene production in the half-year increased by 83% on the first half of the 2022 financial year, to 309 255 t, while shipments were up by 68% to 286 876 t of spodumene concentrate.
Sales revenue in the half-year increased by 647% to $2.18-billion, with statutory net profits after tax increasing by 989% to $1.24-billion and earnings before interest, taxes, depreciation and amortisation increasing by 1 091% to $1.81-billion.
The miner said last week that the profit result was underpinned by a record operating performance from the world-class Pilgangoora project, as well as continued positive pricing conditions for spodumene concentrate as global demand for lithium raw materials continued to grow.
An average unit operating cost of $595/t was achieved for the half-year, compared with the $476/t reported in the same period last year, reflecting labour shortages in the Western Australian mining industry, an elevated strip ratio to support further investment in mining activities, supply chain disruptions, as well as general inflationary cost pressures.
The results allowed Pilbara to declared an inaugural fully franked interim dividend of 11c a share.