Pilbara Minerals signs lithium deal
Pilbara Minerals boss Ken Brinsden has flagged a quick decision on a potential move into downstream processing as the company last week locked in its first binding offtake agreements from its Pilgangoora lithium project.
Pilbara Minerals last week announced an unnamed Chinese lithium carbonate producer had signed a binding agreement to buy at least 140,000 tonnes of concentrate a year, about 40 per cent of its planned 330,000t concentrate production, as well as to pump $17.8 million into the company in a 50cent-a-share placement.
The deal comes with an agreement to examine options to establish a joint venture to process Pilbara Minerals’ 6 per cent lithium concentrate into lithium carbonate or lithium hydroxide.
Mr Brinsden said the companies hoped to complete early-stage scoping studies on the plant, to be built outside China, by the end of September.
Galaxy Resources’ disastrous attempt to build its own lithium carbonate plant in China cast a pall over any thoughts of other local lithium hopefuls pursuing the downstream value chain.
Mr Brinsden said the company was confident its partner had the expertise necessary to build and operate the plant.
“We’re a mining company, we can’t pretend to be a chemical company in the short to medium term, so why bother trying to do it on your own when the expertise is readily available?” he said.
“We have (access to) existing operating skills, existing technology, existing intellectual property, and all you have to do is translate that to another location.
“I think that’s a much lower path to downstream participation and I’m convinced we’ve got the right partner to achieve that model.”
Mr Brinsden said it had not been able to name its partner because it was involved in separate sensitive commercial discussions in China, but hoped that those issues would be resolved within weeks.
He said the off-take deal was the first of several the company expected to announce in coming weeks, saying the interest in the company’s product was strong enough that it could consider expanding the project’s size.