Pilbara Minerals teams with Chinese battery giant on lithium plant project

Pilbara Minerals announced it has executed a binding term sheet with Ganfeng Lithium to complete a joint feasibility study for a proposed processing plant capable of manufacturing 32,000 tonnes of battery-grade lithium chemicals per year.

A key part of the study will be focused on identifying the location for a plant that will be capable of converting spodumene to battery-ready lithium carbonate or hydroxide.

Pilbara Minerals, the owner of the Pilgangoora lithium project in Western Australia, said Australia is on an agreed list of countries the two parties will consider as they seek to build greater geographical diversification in the battery chemicals supply chain.

China currently holds a dominant role across the lithium-ion battery supply chain, maintaining a large market share of capacity across lithium refining (73%), cathode manufacture (86%) and battery manufacture (83%) in 2023.

While China is expected to maintain a significant role within the supply chain moving forward, it is anticipated that there will be growing geographical diversification with new hubs emerging in key strategic regions.

In a statement, Pilbara Minerals said the feasibility study “has been intentionally designed to explore the optimal process technology, chemical end-product, and jurisdiction to ensure the economics are maximised and risks minimised for the future joint venture.”

Pilbara Minerals Managing Director and Chief Executive Officer Dale Henderson said the move supports the Australian company’s aim to extract a greater proportion of value across the battery materials supply chain.

“The feasibility study provides an important first step,” he said. “This study-first approach provides Pilbara Minerals with the option, but not the obligation, to proceed with a lithium chemicals joint venture.”

While Australia is in the mix to host the plant, Pilbara Minerals said preliminary engagement with several countries has indicated strong interest in establishing lithium chemical production with potential economic, taxation, and funding incentives on offer, together with access to land and offers of assistance with permitting and approvals.

The feasibility study is expected to be completed in the March quarter of 2025. Once complete, Pilbara Minerals and Ganfeng, one of the world’s biggest lithium players and a supplier to the likes of Samsung, LG Chem, CATL and Tesla, will have the option to progress to a final investment decision and formation of a joint venture. It is anticipated the processing plant would commence operations in late 2026.

Pilbara Minerals already has a joint stake with South Korea’s Posco in a lithium hydroxide plant and an agreement with Calix for the construction of a midstream lithium chemicals demonstration plant in Western Australia.