PERTH (miningweekly.com) – A scoping study into the Stage 3 expansion of the Pilgangoora lithium project has delivered positive results, ASX-listed Pilbara Minerals told shareholders.
The Stage 3 expansion would increase output at Pilgangoora from the Stage 2 production of between 800 000 t/y and 850 000 t/y of high-quality spodumene concentrate, to some 1.2-million tonnes a year of spodumene concentrate and 1.1-million pounds a year of 3% tantalite concentrate, by enlarging the processing capacity to 7.5-million tonnes a year.
The Stage 3 operation is expected to have a mine life of some 15 years, based on the existing reserves.
The scoping study estimated that the Stage 3 expansion would require an incremental capital cost of A$225.8-million, and would result in a post-tax net present value of A$3.73-billion, life-of-mine (LoM) revenues of A$16.6-billion and LoM project earnings before interest, taxes, depreciation and amortization of A$10.3-billion.
“The Stage 3 scoping study has delivered exceptional results which further reinforce the Pilgangoora project’s outstanding quality and scale. The ability to expand the project to a production rate well over one-million tonnes a year of spodumene concentrate, with a minimum mine life of 15 years, underlines our position as a globally significant lithium raw materials producer,” said Pilbara MD and CEO Ken Brinsden.
“From the start our strategy has been quite clear to develop each stage with a focus on the potential to continue to expand the Pilgangoora project. We remain very focused on the Stage 1 optimisation in progress and have teams dedicated to that task. However, in parallel, we continue to capitalise on the opportunities in the high quality spodumene concentrate and lithium chemicals market.
“The opportunity in front of us has never been more apparent. As the electric vehicle and battery storage sector grows, so does the opportunity for Pilbara to become a player in the lithium raw materials supply chain.
“Together these projects diversify our entrance into this growing market and play directly into our downstream value-adding strategy.”
With the majority of the spodumene concentrate for both the Stage 1 and Stage 2 operations committed under offtake agreements, the additional production from the Stage 3 operation would be used to supply both new and existing customers.
A first priority would be the downstream joint venture with Korea’s Posco, under which the two companies were jointly looking to develop a 40 000 t/y lithium carbonate equivalent chemical conversion facility, in South Korea.
Pilbara said on Tuesday that the final investment decision and delivery schedule for the Stage 3 expansion would be determined by the progress of further feasibility studies, market demand analysis, customer requirements and the timing of any associated chemical conversion facility and project funding outcomes.
Construction of the Stage 3 is currently expected to start in the second quarter of 2020, with commissioning expected early in the second quarter of 2021. Given that the expansion project falls largely within the already-approved operation, it was not anticipated that any federal or state Ministerial approvals would be required beyond the standard mining approvals.