Here you go, again Street Talk Pilbara Minerals starts global...

Here you go, again

Street Talk
Pilbara Minerals starts global hunt for processing JV; MacCap mandated
Sarah Thompson, Kanika Sood and Emma Rapaport
Jun 22, 2023 – 7.38pm
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Lithium producer Pilbara Minerals has instructed Macquarie Capital to begin a global search for a new partner to build a $1 billion processing plant, with the goal of converting spodumene to battery-ready lithium hydroxide.

Pilbara Minerals boss Dale Henderson.
It is understood bankers at Macquarie fired the starters’ gun on the mooted process past week and would comb through lithium processing majors across North America, Asia and Europe.
The hunt is expected to be run as a traditional two-part process, but with a greater emphasis on mutual benefit for the two parties. Sources said Pilbara would take indicative proposals and shortlist potential parties in the months ahead, but there wasn’t a firm bid timetable yet.
Pilbara, which has a $15 billion market capitalisation, already has a lithium processing joint venture with Korean metals giant POSCO.
The duo is building a 43,000 tonnes plant in South Korea’s Gwangyang, which it has said would be the sixth-largest lithium hydroxide producer in the world outside China at 2026 nameplate capacity. The $US800 million ($1.2 billion) plant would process Australian ore in Korea.

Better than last time

Despite that plant, Pilbara’s expected to have about 300,000 tonnes a year of extra spodumene, as it ramps up production, that it could put through the new plant. While the POSCO joint venture left Pilbara with an 18 per cent to 30 per cent stake, this time around it is expected to push harder.
Mining sources said Pilbara negotiated the POSCO joint venture from a position of weakness. Now it’s the one holding the cards with surplus spodumene supply. As a result, Pilbara and Macquarie would likely start discussions at an equitable 50:50 joint venture, with the needle moving in favour of its partner should they happen to be a rock star lithium processor. Globally, Albemarle and SQM play in the segment.
The choice of location would be driven heavily by government subsidies. The Inflation Reduction Act in the United States has made it a key stop on the search party’s list, sources said.
It was a similar story for the POSCO-Pilbara Korea joint venture, where government agencies loaned the duo $US460 million in May to mop up funding and the plant is expected to be built 40 per cent cheaper than Australia. Sources said Pilbara would also try to look at structures to minimise its half of the development cheque to virtually zero.
Pilbara Minerals’s Pilgangoora asset in Western Australia is a globally significant hard-rock deposit. It has grown production by 250 per cent since 2019 to build a $2.7 billion cash balance. It is now looking to increase spodumene concentrate production by 70 per cent over the coming two years, in what is partly driving its push for the new processing venture.

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