The key line from the article is The deal should be seen as more...

The key line from the article is
The deal should be seen as more evidence of emerging desperation in China to secure supply than of the long-term future of the WA lithium industry.

What is not said is PLS is the only company that was capable of supplying a high grade low iron raw product.
Pilbara Minerals raises the lithium stakes with China deal

• The West Australian
• 12 Nov 2016
• Nick Evans The Pilgangoora project.

The announcement this week that Pilbara Minerals will direct ship up to two million tonnes of crushed lithium ore to China is a most intriguing development in WA’s lithium sector.
The love shown between Pilbara Minerals and Mineral Resources in recent weeks, after a peace deal was cut over MinRes’ right to buy lithium concentrate from the Pilgangoora project, has seen the region’s key player accelerate its push to get into production.
Altura Mining is confidently predicting it will be the State’s next lithium exporter. It is tipping the start of construction on its lithium plant at its own Pilbara project (also, irritatingly, called Pilgangoora) after stitching up a $41.6 million cash injection from Chinese battery maker J&R Optimum this week. All going well that means first concentrate by the end of next year.
If Pilbara Minerals’ direct shipping ore deal with Shandong Ruifu Lithium goes ahead it will pip Altura to the export post, flagging first exports of direct shipping ore by July next year if a deal can be stitched up to use Port Hedland’s Utah Point terminal.
Pilbara Minerals did not put a price on its deal with Shandong Ruifu but analysts at Blue Ocean Equities — the company’s house-broker — tipped a likely price of about $US150 a tonne on the 1.5 per cent lithium product, leading to potential margins of more than $100 million from the export deal. Those numbers are speculative, based on discounted assumptions around contract prices flagged for lithium concentrate elsewhere, but they prompted no outrage from Pilbara Minerals and may well be in the ballpark.
That’s pretty good cash while a company is building a plant, and may well raise expectations for shareholders in other early-stage local lithium plays, and even have a few lithium executives reaching for the phone.
Whether a direct shipping model is likely to be more widely adopted is uncertain. The numbers look good for Pilbara Minerals, but perhaps not so much for the buyer.
The eventual price must take into account the shipping costs to China, and 7000km is a long way to ship a product that is, in essence, 98.5 per cent dirt. Even assuming Shandong Ruifu’s processing costs can beat the $154/t flagged by Pilbara Minerals in its most recent feasibility studies, it is hard to see how buying raw ore could be economic in the long term for China’s downstream industry.
Certainly Pilbara Minerals is firm that the deal is a short-term agreement only, a stopgap measure to ensure cash comes in as it builds its plant, and that the deal will be eventually transferred to an off-take arrangement for concentrate.
The deal should be seen as more evidence of emerging desperation in China to secure supply than of the long-term future of the WA lithium industry.