Ann: Mid-Stream Project Update, page-3

ASX / MEDIA ANNOUNCEMENT THURSDAY 31 MARCH 2022
Mid-Stream Project Update
SCOPING STUDY SUPPORTS POTENTIAL IN VALUE-ADDED PATH BEYOND
SPODUMENE CONCENTRATES AT PILGANGOORA
KEY POINTS
• Scoping Study completed for the Mid-Stream Project process pathway and
potential Demonstration Plant.
• Scoping Study provides preliminary support for the construction of a demonstration
scale chemicals facility at Pilgangoora, producing value-added lithium phosphate
salts via an innovative refining process.
• Lithium phosphate salt selected as the preferred product, which is aiming to
support a highly viable feedstock for a number of battery chemicals manufacturers,
including the lithium ferro phosphate (LFP) battery cathode manufacturing
industry, as well as lithium carbonate and lithium hydroxide production.
• Using Calix Limited’s (ASX:CXL) flash calcination technology, test-work has
confirmed high calcination conversion rates (>95% for alpha to beta spodumene
phase transformation) using fine flotation spodumene concentrate1 produced from
Pilgangoora.
• The contained lithia content of the product is expected to increase from ~5.7-6.0% in
spodumene concentrates to >36% in lithium phosphate salts, thereby optimising
offshore product logistics, reducing associated carbon emissions, and minimising
waste in the destination market.
• The Mid-Stream project has the potential to deliver significant sustainability
benefits across the lithium supply chain via:
o substantial reduction of carbon energy requirements by the complete
electrification of the Mid-Stream process, including spodumene calcining,
enabling the potential to power the project using up to 100% renewables
sourced power;
o rationalisation of the carbon footprint via reduced waste movement
requirements across transport and logistics supply chains from a more
lithium-dense, and near zero-waste final product; and
o improved lithium recovery from the ore resource, as the proposed refining
process should have the ability to treat very fine spodumene concentrates at
lower lithia grades, which have traditionally been problematic for calcination
in conventional direct-fired horizontal rotary calciners.
• Consistent with the previously announced MoU, Pilbara Minerals and Calix intend to
move forward with negotiations to establish a Joint Venture (JV) to potentially
develop a demonstration plant, and for the commercialisation of the Mid-Stream
process technology globally.
Pilbara Minerals Limited (ASX: PLS) (Pilbara Minerals or the Company) is pleased to advise
that its mid-stream value-added lithium growth strategy has taken another important step
1 Conversion rates vary as a function of concentrate properties (including particle size) and further testwork is
underway.
forward, with the completion of a Scoping Study in conjunction with Calix Limited (ASX:
CXL) (Calix).
The Scoping Study, which was undertaken by Lycopodium Minerals (ASX: LYL), provides
preliminary support for the technical viability of constructing a demonstration-scale
chemicals facility producing value-added lithium phosphate salts via an innovative refining
process at Pilbara Minerals’ Pilgangoora Operation (“Pilgangoora”) in Western Australia.
The Scoping Study is the first economic evaluation of the Mid-Stream Project which has
been prepared to an accuracy level of +/-40% (for Capital costs) and +/-30% (for Operating
costs). It represents a preliminary study of the potential technical and economic viability of
the proposed process path and demonstration scale facility development.
Any decision to proceed will be the subject of more definitive studies, as part of a proposed
joint venture with Calix.
Studies to date are based on a low level of technical and economic assessments that are
not yet sufficient to support a business case to proceed with the construction and
development of the demonstration plant, or to provide certainty that the conclusions of the
study will be realised. Further, more definitive studies, including on operating costs and
whether there is a viable market for lithium phosphate will be required as part of the
proposed joint venture with Calix, before any final investment decision can be made to
proceed with the development of the demonstration plant.
PROJECT BACKGROUND
Following execution of a Memorandum of Understanding (MoU) in May 2021 (refer ASX
Announcement dated 11 May 2021) between Pilbara Minerals and Calix, a Scoping Study has
been completed by Lycopodium Minerals in conjunction with the Pilbara Minerals and Calix
teams. The study’s purpose was to assess the technical viability of developing a
demonstration scale chemicals facility at Pilgangoora to produce lithium salts from finesflotation spodumene concentrate produced at Pilgangoora. Thereby supporting a potential
pathway towards future commercial production of value-added lithium products (refer ASX
Announcement dated 21 December 2021).
Mid-Stream Project Objective – Pursuing a superior lithium carrier product
The lithium-ion battery supply market is rapidly evolving with large scale development
occurring through all segments of the supply chain. Several prominent themes are shaping
the industry including product cost (per lithia unit), product quality (purity), carbon energy
reduction and waste management (particularly for the European market).
The objective of the Mid-Stream Project is to deliver a superior value-added lithium raw
material that outperforms across the key metrics of product cost, quality, carbon energy
reduction and waste reduction/handling.
The project work completed to date has consisted of work to explore alternative solutions
to achieve these aims, including reviewing and testing alternate process paths, equipment
selection and end-product types.
The Scoping Study undertaken by Lycopodium Minerals has confirmed the technical
viability of the Mid-Stream project to deploy a novel calcination technology and integrated
chemical concentration process at the Pilgangoora Operation to produce a new endproduct, with the preferred product at this stage of study being lithium phosphate salt.
SCOPING STUDY OUTCOMES
Process Design
The Scoping Study has confirmed the technical capability of Pilbara Minerals’ innovative
flowsheet, which is capable of producing lithium phosphate salt from fines flotation
spodumene concentrate from the Pilgangoora Operation. Initial test-work programmes to
confirm the flowsheet were undertaken using a produced synthetic lithium sulphate leach
solution to produce small quantities of lithium phosphate precipitate.
Subsequent test-work phases further developed the flowsheet to produce high purity
lithium phosphate precipitates from Calix-calcined Pilbara Minerals fine flotation
spodumene concentrate.
Following laboratory scale test-work, lithium phosphate salts has been selected as the
preferred product, having demonstrated superior performance to those other alternatives
evaluated to date; however, the Mid-Stream flowsheet is able to incorporate the production
of other lithium-bearing salts, with minor modification to process flow (however additional
equipment would likely be required). This will continue to be evaluated in future study
works.
Flowsheet test-work to-date (comprising pilot-scale calcination and laboratory-scale
chemical processing) has demonstrated >90% overall lithium recovery to a final high purity
lithium phosphate salt product.
Figure 1 – Mid-stream product demonstration plant design model.
Calcination
A series of spodumene flotation concentrate samples from Pilbara Minerals’ Pilgangoora
Operation were sent to Calix’s test facility in Bacchus Marsh - Victoria, for processing
through their BATMn reactor. These samples were processed under a range of operating
conditions to determine whether successful calcination of Pilgangoora spodumene
flotation concentrate could be achieved using the Calix Flash Calciner (“CFC”) and if so,
what the optimal conditions for this calcination would be.
Testing undertaken at the BATMn reactor was considered as a pilot scale initiative, given
the scale of the facilities in use.
Calcination test work during the Scoping Study demonstrated a >95% conversion (alpha to
beta spodumene phase transformation) using fine spodumene concentrate, which is
regarded as a competitive result compared to industry norms utilising conventional rotary
kiln technology.
Further, the Calix flash calcination technique is particularly well-suited to the finer fraction
of the fines flotation concentrate at Pilgangoora (less than 75µm). This is very encouraging
as it has the potential to solve an existing challenge for the industry when dealing with fine
flotation products through conventional calcining technology.
Figure 2 – Calix flash calciner and electric pilot scale plant (BATMn Reactor)
Summary of key Scoping Study demonstration plant parameters
As part of the Scoping Study, Pilbara Minerals commissioned several value engineering
assessments to quantify the impact of varying feed lithia grade, decreasing feed
spodumene size distribution, increasing spodumene throughput rates and optimising
reagent selection.
The optimised value engineering scenario selected via the Scoping Study is the processing
of ~27,000 tpa of fine, lower-grade spodumene concentrate, to produce in excess of 3,000
tpa2 of high purity (>98% purity) lithium phosphate salt. Further, more definitive
engineering studies will include this scenario as a base-case for the proposed development
of the Pilgangoora demonstration plant.
The key parameters for the proposed Demonstration Plant, as confirmed by the Scoping
Study and value engineering assessments, are outlined in Table 1.
Table 1 – Mid-Stream Scoping Study key process plant parameters.
Key parameter UoM Scoping Study Outcomes
Concentrate feed dmt/a ~27,000
Concentrate feed grade % w/w Li2O 5.00
Overall lithium recovery % 91
Li3PO4 production dmt/a >3,000
Li3PO4 purity % w/w Li₃PO₄ ~>98
While Pilbara Minerals is encouraged by the results to date from the Scoping Study
outcomes, contributing engineering is still considered to be at an early stage of
development.
Scoping Study Economic Assessment
At a Scoping Study level of assessment, the estimated capital development cost of the
envisaged demonstration plant is between A$50-70M. These are preliminary assessments
and further study work is to be undertaken to develop the underlying engineering and
refine the expected capital development costs.
Key operating cost drivers to the production of lithium phosphate at Pilgangoora include
the cost (or transfer price) of spodumene feed, power supply and the supply cost of
phosphate sources. At this early stage of the project’s development, the cost of production
is still under review, and will be subject to further optimisation (among other capital and
operating costs) in subsequent engineering studies.
NEXT STEPS AND TIMELINE
Pilbara Minerals is encouraged by the results of the Scoping Study, potentially supporting
an innovative new refining process at the Pilgangoora Operation.
The near-term activities to progress the Mid-Stream project that are expected to be
completed before the end of CY2022 are:
• JV Development and Cost Optimisation - negotiation and formation of a JV between
Pilbara Minerals and Calix to undertake further, more definitive, engineering studies
to further assess the operating and capital costs for the Demonstration Plant to
support the parties making a final investment decision to move forward with
developing the Demonstration Plant and for the commercialisation of the MidStream technology across industry globally.
2 For reference, the lithium content of one tonne of lithium phosphate is ~95% of the lithium contained in the
same mass of lithium carbonate, or ~108% of the lithium in the same mass of lithium hydroxide monohydrate.
• Market Samples - a continuous pilot test-work program to produce lithium
phosphate samples in lots of 10kgs for a detailed market engagement program to
help inform the project of the likely marketability and selling price outcomes of the
lithium phosphate salt product being produced; and
• Demonstration Plant FID - development of the demonstration Plant will be subject
to an investment decision being made by the JV parties which will be targeted to
be assessed prior to the end of CY2022.
Following progression of the near-term activities and further updates to the market, the
parties are indicatively targeting a timeline which comprises Demonstration Plant
construction commencement in Q2 CY2023, with construction completion in Q1 CY2024.
Following completion of construction and commissioning, a period of process optimisation
would follow.
Release authorised by Ken Brinsden, Pilbara Minerals Limited’s Managing Director.