Major progress in the Pilbara for aspiring lithium miners

Major progress in the Pilbara for aspiring lithium miners

Mon, 17/09/2018 - 14:31
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Pilbara

Pilbara Minerals' ramp-up of its processing facility is on schedule. Photo: Pilbara Minerals

Aspiring lithium miners Pilbara Minerals and Altura Mining have made significant progress at their Western Australian operations this month, seeking to capitalise on surging demand for the key battery-making ingredient as China's electric vehicles revolution continues to gather momentum. 

Pilbara Minerals says it remains on track to export its first shipment of spodumene concentrate to China later this month, following on from Altura Mining, which became Western Australia’s seventh operating lithium miner earlier this month.

In an announcement to the ASX, Pilbara Minerals said its ramp up of production was progressing well, with the first 5,000 tonne shipment of saleable spodumene concentrate expected to occur on September 20.

Product testing by Pilbara Minerals’ offtake partner, China’s General Lithium, indicated the concentrate has passed industry standards and will readily produce battery grade lithium carbonate.

Other Chinese offtake partners for Pilbara Minerals’ Pilgangoora mine include Great Wall Motors and Ganfeng Lithium, while South Korea’s POSCO is also in line to take concentrate from the operation.

General Lithium is midway through commissioning a 16,000 tonne per annum lithium hydroxide plant, which is expected to be one of China’s most technologically advanced once complete.

“The strong results now being achieved reflect the significant investments we made, including our decision to invest upfront in both a coarse and fines processing circuit, as well as in high-quality equipment selection,” Pilbara Minerals managing director Ken Brinsden said.

“Together this will help ensure that the Pilgangoora project becomes one of the lowest cost producers globally in the long-term."

Meanwhile, Pilbara Minerals also today announced that drilling operations at the Pilgangoora mine had resulted in a 35 per cent increase in its total proved and probable ore reserves.

“The continued growth in ore reserves reflects the quality and scale of the Pilgangoora project and truly sets the scene for our stage 2, 5 million tonne per annum expansion,” Mr Brinsden said.

“Given the rapid escalation in customer demand, the robust outlook for the lithium market and continued increases in the resource and ore reserve, we have every reason to believe that Pilgangoora’s production can continue to grow over time, subject of course to completing the appropriate studies.”

Pilbara Minerals’ progress at Pilgangoora follows Altura Mining becoming Western Australia’s seventh operating lithium miner, officially opening its operation which is also located in the Pilgangoora region.

Altura’s opening came just 18 months after construction started at the mine, which began producing lithium concentrate last month.

Altura’s maiden shipment is with its shipping agent, while the miner said it looked forward to advising the market of its first shipment.

Offtake partners for Altura’s operation include Shaanxi J&R Optimum Energy subsidiary Optimum Nano, and Lionergy.

Earlier this month, Altura secured an additional $US15 million in project finance for the operation, providing sufficient capital to continue ramping up the mine to its nameplate capacity.

The miner is evaluating the possibility of a second stage of production at Pilgangoora, to result in annual output of up to 440,000 tonnes of spodumene concentrate.

Pilbara Minerals and Altura Mining’s Pilgangoora advancement comes at a time of uncertainty for global lithium players, following Galaxy Resources’ announcement last month that prices for lithium carbonate sold into China has slipped by 18 per cent in the three months to June 30.

Earlier this year, global commodities and equities analyst Morgan Stanley predicted lithium prices to fall by 45 per cent by 2021, further clouding the medium- to long-term outlook for the industry.

However, last month at the Diggers and Dealers Mining Forum in the historic Western Australian goldmining town of Kalgoorlie-Boulder, Mr Brinsden said he expected the market to normalise within months, while also noting that the price of spodumene concentrate had held up well over the same time.

Mr Brinsden, as well as a host of other lithium sector proponents, was particularly buoyed by the rapid increase in electric vehicle sales in China.

More than 373,000 plug-in passenger cars were sold in China in the first six months of 2018, a 114 per cent increase on the same period last year, according to sales database EV Volumes.com.

EV Volumes said it expected new energy vehicle sales to reach 1.1 million in China this year, with an additional 275,000 electric or hybrid commercial vehicles also to be delivered.

The Chinese government in 2016 set a target of 6 per cent of all vehicles on its roads to be new energy vehicles by 2020.

EV Volumes said at current sales rates, those targets, which were considered to be highly ambitious when announced, will be easily surpassed before then.

Pilbara Minerals stock surged by 3.3 per cent on the ASX today, to finish trade at 79 cents, while Altura Mining shares fell by 4.4 per cent, to 21.5 cents.