Pilbara Minerals (ASX:PLS) has reached Final Investment Decision (FID) to increase the nameplate production capacity of the Pilgangoora Project by 47% to 1 million tonnes per annum of spodumene concentrate (P1000 Project).
The Australian lithium producer reports the approval of the capital investment for the P1000 Project means the company is on track to deliver first ore in the March quarter of 2025. Full production is expected to follow commissioning and ramp-up at the end of the September quarter 2025.
Pilbara Minerals notes estimated project capital expenditure of $560 million, including previously announced pre-FID investment of $38 million, provides compelling project economics, with forecast payback from incremental cashflows relative to the P680 Project within 12 months.
In February, the company announced it had executed a 10-year $250 million debt facility with the Australian government through Export Finance Australia (EFA) and the Northern Australia Infrastructure Facility (NAIF).
The company has now also started exploring strategic options to maximise value from the additional product to be produced as a result of the P1000 expansion. The company has received ‘significant’ unsolicited inbound interest from existing and potential new customers in relation to both spodumene offtake and downstream partnerships including joint ventures.
Accordingly, following FID for the P1000 expansion, Pilbara Minerals intends to pursue additional offtake and partnering opportunities in respect of unallocated product and will actively engage with selected participants across the battery materials supply chain.
This investment in the Pilgan Plant and supporting infrastructure will deliver a 320,000tpa increase in nameplate spodumene concentrate production capacity. The company says this will ultimately increase the annual production run rate from the Pilgangoora Project to about 1 million dry metric tonnes once fully commissioned and ramped up in the September quarter of 2025.
“From the outset, our long-term growth strategy has been to develop each stage with a focus on tailoring production to meet demand…”
Pilbara Minerals’ Managing Director and CEO Dale Henderson says the P1000 Project expansion is an important milestone for the company.
“From the outset, our long-term growth strategy has been to develop each stage with a focus on tailoring production to meet demand, while also planning for future expansion opportunities. The P1000 Project increases our nameplate production capacity by approximately 47%, driven by continued strong demand for our product, and leverages the planning and ongoing work being undertaken as part of the current P680 Expansion Project.”
The P1000 Project scope incorporates the design and construction of a series of additional unit processes at the Pilgan Plant, which will be tied into the existing flowsheet through a series of staged shutdowns and interface works. Extensive duplication of current equipment delivers commonality of spares, known performance and throughput capacity.
Pilbara Mineral reports P1000 increases the Pilgan Plant annual throughput to 4.92Mtpa, which will have a concentrate grade design range between 5.2-6% Li2O, providing the company with material flexibility to tailor its product to maximise value and meet customer requirements over time.
The duplication of the processing circuit was approved by the relevant regulatory agencies in October 2019. Further applications for ancillary infrastructure including an additional tailings thickener and process water pond are planned to be submitted in Q1 CY2023.
FID for P1000 assumes that concentrate continues to be exported from the Eastern Harbour Berth 2 in Port Hedland. However, further port capacity will likely be required when P1000 ramps up to full capacity. As a result, improvement initiatives are being trialed to increase Eastern Harbour capacity, including utilising Berth 1, until the new Port Hedland Lumsden Point Port facilities are developed from the end of CY2025. Lumsden Point, which is jointly funded by the state and federal governments, is a new multi-user port facility and logistics hub to facilitate the export of battery minerals and other commodities.
Pilbara Minerals is an ASX-listed lithium company, owning 100% of the world’s largest, independent hard-rock lithium operation. Located in Western Australia’s resource-rich Pilbara region, the Pilgangoora operation produces a spodumene and tantalite concentrate. The significant scale and quality of the operation has attracted a consortium of ‘high-quality’, global partners including Ganfeng Lithium, General Lithium, POSCO, and Yibin Tianyi.
Write to Adam Orlando at Mining.com.au
Images: Pilbara Minerals Limited
