Australian company Pilbara Minerals (PLS.AX) has entered into a study agreement with Chinese partner Ganfeng Lithium (002460.SZ) to assess the feasibility of constructing a 32,000 metric-ton-per-year lithium conversion facility in a yet-to-be-determined location, as announced by both companies on Monday. The proposed plant, capable of producing lithium carbonate or hydroxide, is expected to undergo a feasibility study scheduled for completion by the first quarter of 2025.
Pilbara Minerals and Ganfeng Lithium are evaluating various potential sites for the facility, including Australia, to enhance geographic diversification within the battery chemicals supply chain. Pilbara Minerals, the largest independent lithium miner in Australia, already holds joint ventures with South Korea’s POSCO and Calix Limited for lithium chemicals production projects in Western Australia. The study will explore the production of midstream lithium chemicals to optimize transportation efficiency and reduce carbon emissions. Pilbara Minerals highlighted strong interest from multiple countries in hosting lithium chemical production, offering economic incentives, taxation benefits, and assistance with permitting and approvals.
In the event of project advancement, the joint venture partners intend to equally own the project, with Ganfeng considering divesting its stake based on potential benefits from the U.S. Inflation Reduction Act subsidy scheme. Pilbara Minerals plans to expand spodumene production to 1 million tonnes per year and has committed to supplying 300,000 tons annually under a long-term offtake agreement. Should the final investment decision falter, Pilbara will provide an additional 100,000 tons of spodumene annually to Ganfeng from 2027 to 2030. A decision on expanding production capacity beyond 1 million tonnes per year is expected in the June quarter.