The West Pilbara Minerals, page-3

Pilbara Minerals plans to be leader in lithium

• The West Australian
• 28 Oct 2017
• Stuart McKinnon

Picture: Trevor Collens
Ken Brinsden at the Pilgangoora lithium-tantalum project in the Pilbara.
The Pilbara will soon have the biggest lithium mining operations in the world and Pilbara Minerals will be to the commodity what Rio Tinto is to iron ore, says the company’s managing director Ken Brinsden.

Construction of the company’s $234 million, 2mtpa Pilgangoora lithium-tantalum project 120km south of Port Hedland is in full swing with mining expected next month and first shipments anticipated before the end of June next year.

The mine and processing facility will produce a 6 per cent spodumene concentrate that will be upgraded by Pilbara Minerals’ Chinese customers into battery-grade lithium carbonate or lithium hydroxide to be used in lithium-ion batteries.

Mr Brinsden said China was moving rapidly to become the dominant player in the production of lithium-ion batteries that power hybrid and electric vehicles.

And the former Atlas Iron boss says Pilbara Minerals is set to become one of the world’s lowest cost producers of the raw material, exporting some of the cleanest, highest-quality spodumene concentrate in the world.

“WA, as a whole, is fantastically positioned to become the dominant global player in hard rock lithium mining,” he said.

Much of the world’s attention continues to be focused on the massive brine reserves in the lithium triangle of Chile, Argentina and Bolivia.

However Mr Brinsden believes WA’s hard rock lithium is of a higher grade, with less impurities and will eventually be shown to outperform on a cost basis.

Pilbara Minerals already has offtake agreements covering the majority of its 330,000tpa of spodumene from stage one of Pilgangoora with Chinese customers General Lithium and Gangfeng Lithium.

It also recently announced a deal with Chinese car manufacturer Great Wall which will underwrite the development of Pilgangoora’s stage two to boost capacity to 5Mtpa, producing as much as 800,000tpa.

Mr Brinsden believes that the cost of an electric vehicle could reach parity with a standard petrol-fuelled car within two years because of rapid technological advances in China and that is when electric vehicle take-up is expected to grow exponentially.

Pilgangoora is likely to operate at costs of about $US200/t with the price of lithium concentrate sitting at $US800-$US900/t, representing a healthy margin.

But Mr Brinsden said he expected demand to outstrip supply in the short to medium term, pointing to the potential for higher prices for the company’s product.

Pilbara Minerals will export about one shipment of spodumene concentrate a month from the middle of next year, while the company continues talks with potential buyers around a direct shipping ore product and an offtake agreement for its tantalum product.

It is also exploring the potential of moving further along the downstream processing chain to produce an even higher-value, higher-margin product such as lithium carbonate

A workforce of about 400 will be on site at Pilgangoora at peak construction later this year with 120 jobs created in its operational stage.

Pilgangoora hosts a resource of 156.3Mt at 1.25 per cent lithium oxide and 128ppm tantalum oxide for 1.9Mt of lithium oxide and 44M pounds of tantalum oxide.

Pilbara Minerals announced this week it had two new discoveries on its existing tenements, likely to expand the company’s existing resources further.

“The more we drill, the more we find,” Mr Brinsden said.

The reporter travelled to Pilgangoora as a guest of Pilbara Minerals.