Pilbara Minerals, Australia’s largest independent lithium producer, has unveiled a A$1.2 billion ($799.2 million) plan to double the production capacity of lithium spodumene at its Pilgangoora operation in Western Australia.
The expansion project, if approved, could result in a decade of output averaging 1.9 million tonnes per year of spodumene, a crucial raw material for lithium-ion batteries. To achieve this, Pilbara Minerals will need to build a new flotation plant adjacent to its existing one to extract lithium from the spodumene more efficiently and keep costs in check.
CEO Dale Henderson stated that the company expects to have access to a “full suite of funding options,” including cash flow from operations, government support, offtake and financing agreements, as well as debt and equity. As of March 31, 2024, Pilbara Minerals had A$1.8 billion in cash on its books.
In addition to the expansion plan, Pilbara Minerals is also studying the possibility of processing its spodumene into a more lithium-rich product that could be sold at higher margins. The company is building a demonstration plant with Calix Ltd to trial electric calciner technology, which could produce a lithium phosphate product containing 18% lithium, compared to the 5% to 6% contained in regular spodumene.
The demonstration plant’s findings may offer learnings applicable to other projects around the world and provide Pilbara Minerals with another revenue stream through licensing the technology.
Pilbara Minerals has also agreed to a study with China’s Ganfeng Lithium on options to build a 32,000 metric-ton-per-year lithium conversion facility, with the site for the plant yet to be determined, but with a number of countries, including Australia, being considered.
Despite the announcement, Pilbara Minerals’ shares fell 3.8% to A$3.08, amid broader weakness in the lithium mining sector, with the mining sub-index dropping 0.3%.