Pilbara Minerals, Australia’s largest independent lithium producer, announced on Friday a A$1.2 billion plan to double its production capacity for lithium spodumene at the Pilgangoora operation in Western Australia.
If approved, the expansion could result in an average annual output of 1.9 million tonnes of spodumene over the next decade. The decision will follow the completion of a feasibility study, expected in late 2025.
To support the expansion, Pilbara Minerals plans to build a new flotation plant for extracting lithium from spodumene.
This facility will be adjacent to the existing flotation plant to help manage costs. The company is considering various funding options for the project, including cash flow from operations, government support, offtake agreements, financing, debt, and equity.
“We expect the full suite of funding options to be available to us,” CEO Dale Henderson told Reuters.
As of March 31, 2024, Pilbara Minerals had A$1.8 billion in cash reserves.
This expansion plan is separate from Pilbara’s ongoing project to process spodumene into a higher-value lithium-rich product.
The company is collaborating with Calix Ltd to build a demonstration plant that will trial electric calciner technology, producing a lithium phosphate product with 18% lithium content, significantly higher than the 5-6% lithium content in spodumene.
The demonstration plant could provide valuable insights for other global projects and offer Pilbara additional revenue opportunities through technology licensing, Henderson noted.
Earlier this year, Pilbara agreed to a study with China’s Ganfeng Lithium to explore options for building a 32,000 metric-ton-per-year lithium conversion facility.
The location for this plant is yet to be determined, with several countries, including Australia, under consideration.
Despite the announcement, Pilbara’s shares fell 3.8% to A$3.08 amid broader weakness in lithium mining stocks, with the mining sub-index dropping 0.3%.
