Pilbara Minerals has tapped its two Chinese customers alongside existing lenders to provide a funding package worth $156.4m to expand its Pilgangoora lithium-tantalum project in Pilbara region of Western Australia.
The remaining amount for the $231m expansion project will come from the company’s existing reserves and future cashflow from its two million tonnes per annum (mtpa) project.
The expansion will increase Pilgangoora’s throughput to 5mtpa.
Pilbara Minerals expects to commission the second stage of the project from the March quarter of financial year 2020.
It will also explore potential for a stage three expansion based on customer demand, which, if it materialises, could take the project’s total output to 7.5mtpa.
The funding package consists of a A$35.5m offtake pre-payment from Great Wall, a $50m placement from Gangfeng priced at A$0.6438 per share, and A$70.9m tap issue to the company’s existing bondholders.
The news reports on funding package to Pilgangoora project comes three months after the company shipped its first lithium concentrate from the stage one project.
Meanwhile, Pilbara Minerals signed a non-binding memorandum of understanding (MOU) with steel maker POSCO, another of its offtake partners, to evaluate a larger joint venture downstream chemical conversion facility in South Korea with capacity of up to 40ktpa LCE, from the earlier 30ktpa LCE.
This MoU recognises an increase in the existing spodumene concentrate offtake agreement from Pilgangoora project from 240,000tpa to 315,000tpa to support the enlarged chemical facility.
Major players in the lithium industry such as SQM, and POSCO have made heavy investments in boosting their capacity as the coming years would see a global surge in production of lithium-ion batteries-run electric vehicles. Western Australia currently serves as a hub for lithium boom.