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Pilbara Minerals has catapulted itself into the position of holding one of the world’s largest lithium deposits after upgrading estimates for its West Australian mines.
The upgrade comes as global demand for lithium – a key component of the batteries in electric cars – continued to rise.
The ASX-listed lithium player’s chief executive Dale Henderson said the miner’s estimate for Pilgangoora, near Port Hedland, had jumped 36 per cent to 413.8 million tonnes of measured, indicated and inferred resource, adding about 109 million tonnes from its previous outlook.
The Greenbushes hard-rock lithium mine in Western Australia.Credit: Darren Gray
The upgrade pushed Pilbara’s deposit to a size that sits alongside Greenbushes, the world’s largest hard rock lithium open-cut mine under excavation in Australia’s south-west run by Talison Lithium, a joint venture between Tianqi Lithium and US giant Albemarle Corporation.
Lithium has overtaken gold as a key focus of this year’s Diggers & Dealers mining forum in Kalgoorlie where Henderson and a host of other lithium rising stars were speaking on Monday.
“The outlook for lithium is looking pretty spectacular,” Henderson told about 2600 participants at the forum. “The world needs a lot of lithium above and beyond all the identified assets so far.”
“We believe that there’s a long-term structural deficit [of lithium supply], and we feel that Pilbara’s incredibly well-placed to capitalise on that deficit,” he said. “We’ve got our foot down and we’re going to make the most of this incredible environment and capitalise on the lead that we think we’ve established.”
Vehicle manufacturers across China, Europe and the US are scrambling to secure supplies of lithium, a mineral crucial to powering long-life batteries, as they pivot to making electric vehicles in a shift that is fuelling the prospects of mining explorers and more established companies like Pilbara who will supply the raw material.
Investors piled into the sector late in 2020 as electronic vehicle sales took off, setting off a wild ride in prices that shot to an all-time high in November last year, before crashing 70 per cent to a low in April.
Prices have recovered somewhat and stabilised, but Henderson said he expected volatility to continue as the industry was still in the early stages of growth.
Last financial year, Pilbara produced 620,000 tonnes of spodumene concentrate, a high-purity lithium ore that is generally sold to China where most of the world’s critical minerals are refined and produced.
Pilbara Minerals chief executive Dale Henderson at the Diggers and Dealers conference in Kalgoorlie. Credit: Bloomberg
“In the next 18 months to 24 months we’re actually going to double the amount we produce. So if you take the view that prices are continuous, we’re going to be producing a lot more tonnes and, therefore, we should be set to see strong revenues, all going well,” Henderson said.
The miner said it will build an on-site electric kiln technology demonstration plant, partnering with Calix, to process ore into lithium phosphate in an effort to add value to its mining activities, reduce its carbon footprint and drop out waste that would otherwise be present in its spodumene concentrate. “It’s very much an R&D demonstration plant,” he said.
Pilbara has also partnered with South Korean giant POSCO to build a lithium hydroxide facility in Gwangyang, where it has the potential for a 30 per cent equity stake.
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