PLS 0.48% $4.19 pilbara minerals limited

Brawl between lithium miners Pilbara Minerals and Mineral Resources escalates

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    Hey guys, I found this in the Fin Review today....enjoy

    Chris Ellison's Mineral Resources is seeking to drag lithium rival Pilbara Minerals back to the Supreme Court of Western Australia as part of an escalating brawl over a product sales agreement for Pilbara's Pilgangoora project.
    MinRes, headed by BRW rich lister Mr Ellison, and Pilbara, run by former Atlas Iron boss Ken Brinsden, are at loggerheads over the interpretation of an agreement that gives MinRes a right of first refusal over the lithium sales from the large Pilgangoora project.
    The dispute, now in its third month, highlights the fierce competition between Western Australia's emerging lithium producers as they race to capitalise on increased demand for the material used in the batteries powering electric vehicles.
    The stoush was sparked in July when MinRes told Pilbara it wanted to exercise its right to match an offtake deal Pilbara had inked for Pilgangoora with China's General Lithium.

    MinRes had acquired the right to match the offtake through its June acquisition of the Wodgina lithium project from private company Global Advanced Metals, which had previously sold Pilgangoora to Pilbara.

    Since then MinRes and Pilbara have been quarrelling over whether a sale notice issued to MinRes is valid and, after round one in the Supreme Court, Pilbara agreed to reissue the notice.
    The notice gives MinRes 45 days to match the offer from General Lithium or give up its right to buy the product and instead receive a 2.5 per cent net smelter royalty.
    MinRes has continued to argue the second sale notice does not offer it the same terms offered to General Lithium, suggesting it offers a fixed price for the product rather than the market-driven pricing mechanism offered to General Lithium, something Pilbara has disputed.
    On Friday, Pilbara said it had moved to issue MinRes with a dispute notice, as required under the terms of the parties' agreement, which refers the stoush to an independent expert tasked with making a binding determination within 28 days.
    However, the matter is expected to return to court this week after MinRes served Pilbara with a further writ of summons.
    Pilbara is seeking to solve the spat as quickly as possible in order to focus on bringing Pilgangoora into production.
    Concerns the legal action could hamper the project's progress have battered Pilbara's share price in recent months, with shares in the company falling a further 2¢ per share on Monday to 46.5¢, down from a peak of 86¢ in May.
    In a statement to the exchange on Monday, Pilbara said it would seek to stay the court proceedings "so as to allow the expert's binding determination to be made without delay in order to resolve this matter", adding it considered it a "straightforward" matter and believed MinRes' claims were "misconceived".

    Pilbara chairman Tony Kiernan told The Australian Financial Review it was "inappropriate" for the dispute to be resolved in court.
    "The parties agreed that if there was a dispute, the basic documents provided for a dispute resolution," he said. "Seeking to do this through the court is totally inappropriate."
    MinRes declined to comment.
    The players involved are well known to each other given their backgrounds in the Pilbara's iron ore industry. MinRes operates the Iron Valley iron ore mine owned by BC Iron, which Mr Kiernan chairs, and provided contracting services to Atlas Iron, which was headed by Mr Brinsden until June 2015.
 
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