Benzinga - by Stjepan Kalinic, Benzinga Staff Writer.
Pilbara Minerals (OTC:PILBF), Australia’s leading lithium producer, plans to expand the production capacity at its flagship Pilgangoora operation in Western Australia.
The company will allocate A$1.2 billion (US $800 million) to this expansion, which is set to boost lithium spodumene output.
“This expansion is expected to provide an average of 1.9 million tons per annum production for the first 10 years and more than 2 million tons per annum over the first six years after ramp up. The scale benefits of this expansion will further build on Pilbara Minerals' position as one of the major leading lithium suppliers globally,” CEO Dale Henderson stated in an announcement.
Pilgangoora is the world’s largest hard-rock lithium operation owned by a single entity. The mine currently produces approximately 360,000 to 380,000 tons of spodumene concentrate annually.
The expansion project, titled P2000, envisions a production capacity of 2 million tons of spodumene concentrate per annum. It also aligns with the growing demand for electric vehicle batteries, which rely on lithium.
The plan includes constructing a new ore flotation plant adjacent to the existing facilities to optimize costs and efficiency. The feasibility study for this project is expected to be completed by late 2025, and if all goes according to plan, production is anticipated to start by 2028.
In addition to the expansion at Pilgangoora, Pilbara Minerals is pursuing a partnership with China’s Ganfeng Lithium (OTCPK: GNENF) to explore the feasibility of a 32,000 metric-ton-per-year lithium conversion facility. Ganfeng is a notable shareholder in the company, with the fourth-largest stake, 5.74%.
Financially, the company is in a strong position. It holds A$2.1 billion ($1.8 billion) in cash and only A$452 million ($300 million) in debt. Despite this, the company has faced challenges as lithium prices declined from their highs.
This lead to a 21.86% drop in stock value year-to-date.
Now Read: EXCLUSIVE – Canada’s Mega Nickel Project With 3.8 Million Metric Tons Set To Challenge Global Giants
Benzinga Mining is the bridge between mining companies and retail investors. Reach out to licensing@benzinga.com to get started!
Image: Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.