Pilbara signs second offtake agreement

PERTH (miningweekly.com) – Lithium developer Pilbara Minerals has signed a second offtake agreement with a Chinese group over the early supply of direct shipping ore (DSO) from the Pilgangoora lithium/tantalum project, in Western Australia.

Under the agreement, Pilbara will supply 1.9-million tonnes run-of-mine over two years, with first delivery targeted from July next year. The company can elect to supply the DSO from the Pilgangoora project, or the adjoining higher-grade Lynas Find lithium project.

MD Ken Brinsden said on Thursday that the offtake agreement with Shandong Ruifu delivered multiple benefits for both parties.

“The delivery of early run-of-mine ore to interim processing facilities in China represents a fantastic innovation for the lithium industry, providing earlier access to raw material for our costumer while at the same time supporting Pilbara’s fast-track development strategy by providing early cash flow from the project.”

Brinsden said that this would provide the opportunity to mobilise the mining fleet earlier than had otherwise been planned, accelerating the development of the openpit operation, constructing the tailings facility, and preparing the ore stockpiles for subsequent process plant commissioning.

“With the DSO shipments targeted to commence in July next year, this will provide us with the opportunity to generate early revenue, well ahead of our original timetable, which should deliver important strategic benefits as we complete the construction, commissioning and ramp-up of the concentrator.”

The early run-of-mine ores are not expected to impact on the delivery of the overall two-million-tonne-a-year ore processing and spodumene concentrate plant, which is expected to be commissioned in late December next year.

“Pilbara remains on track for commissioning of the full mine site facilities from late 2017, establishing the company as a leading low-cost supplier of spodumene concentrate to global markets,” Brinsden said.

The project is expected to deliver 314 000 t/y of 6% spodumene concentrate and 321 000 lb/y of tantalite.

Pilbara previously struck an offtake agreement with General Lithium, which will see the company take 140 000 t/y of 6% chemical-grade spodumene concentrate over a six-year period from the first quarter of 2018.

Shares in Pilbara jumped 13% to A$0.54 apiece on Thursday.