Pilbara Minerals eyes more Pilgangoora lithium output

Australian mining firm Pilbara Minerals has started a feasibility study into raising spodumene production capacity at its Pilgangoora operations in Western Australia.

The P2000 expansion project will more than double Pilgangoora's output capacity to over 2mn t/yr, the firm said today. Pilbara forecasts Pilgangoora's output to average around 1.9mn t/yr of 5.2pc grade spodumene in the first 10 years after the P2000 expansion is completed, with production starting from 2028, if it does go ahead.

Pilbara estimates A$1.2bn ($798mn) of capital expenditure for the project, which includes building a new ore flotation plant but excludes the extra capital expenditure needed for the mine to support the expansion. The firm approached Australian federal government financing agencies for the project's funding, which it said provided non-binding letters of support for "up to A$400mn" after the initial engagement.

"The timing of the P2000 Project will be subject to the successful outcome of the next level of feasibility study, project approvals and the market outlook at the time of the financial investment decision," said the firm.

The feasibility study is expected to be completed in October-December 2025, but the firm remained cautious about assuring a final investment decision (FID). Any FID decision needs to come after the study outcome, said managing director and chief executive Dale Henderson. "That's more than a year away, which is frankly an eternity in the lithium industry."

The P2000 project will come after the firm's P680 and P1000 projects, which Pilbara Minerals has decided to plough ahead with. The P680 and P1000 projects would raise Pilgangoora's output capacity to 1mn t/yr.

The firm earlier this year defended its lithium downstream strategy and is exploring building a downstream conversion plant with Chinese refiner Ganfeng.

By Joseph Ho