Pilbara Minerals shares didn’t change yesterday after it edged closer to a deeper involvement in the lithium processing business.
The company told the ASX that it had exercised an option to enter a joint venture to manufacture battery-making materials with giant steelmaker Posco by setting up a lithium processing facility in South Korea.
The Australian miner said in a statement that it will have up to 30% stake in the facility, which will have a capacity of up to 40,000 kilotonnes per annum of lithium carbonate equivalent.
The shares rose to 73 cents but settled back to close at 71.5 cents, unchanged from last Friday.
Pilbara said lithium hydroxide will be produced at the facility using Posco’s patented purification process. Lithium hydroxide is a key component in making batteries.
Pilbara in January said it agreed to sell about 240,000 tonnes of lithium concentrate a year to Posco.
Several Australian lithium miners, including Pilbara, also have supply agreements with Chinese auto and battery makers as China expands its electric vehicle capacity faster than any other producer.
Pilbara and Posco intend to complete construction of the plant by late next year.
Pilbara has taken a different stance to rivals such as Mineral Resources, which has set up a billion dollar plus plant in the Pilbara with global lithium giant, Albermale as the 50% shareholder.
The Greenbushes lithium mine (49% owned by Albermarle) in WA’s southwest, revealed a very solid result for 2018.
The West Australian revealed yesterday that new ASIC filings for the mine’s owner show Greenbushes’ net profit jumped by nearly a third last year to $255.6 million from $196.8 million the year earlier as sales revenue rose 38% to $586.3 million.
Windfield Holdings is owned 51% by China’s Tianqi and 49 percent by Albemarle of the US, which are also the biggest buyers of Greenbushes’ lithium-rich spodumene concentrate.
Greenbushes is reported to have increased production beyond capacity last year, from nearly 640,000 tonnes in 2017 to about 720,000t, taking advantage of a doubling of lithium prices since 2016 on rising demand from battery makers.
The owners are well into an $800 million-plus expansion to boost output to nearly two million tonnes a year from 2020.
The first stage, costing $320 million, is on target for commissioning next quarter, with the $516 million second stage approved by the partners but awaiting regulatory approvals.
The West Australian said the expansion will feed two value-adding lithium hydroxide plants being developed by Tianqi and Albemarle in Kwinana and Kemerton (both in WA) respectively at a cost of nearly $2 billion.
