According to Mining News Pro - Pilbara Minerals signed a non-binding deal with South Korean company Posco that could lead to the potential expansion of a proposed joint venture chemical facility using spodumene material from Pilgangoora.

The memorandum of understanding (MoU) between the two companies would see the existing plan for Pilbara Minerals to supply 30,000 tonnes of lithium carbonate equivalent (LCE) a year expand by 25 per cent to 40,000 tonnes of LCE per year.

Pilbara Minerals’ stake in the joint venture with Posco is expected to be 30 per cent.

To accomodate this and future business, Pilbara Minerals has proposed an increase to annual life-of-mine (LOM) production at Pilgangoora from the current 240,000 tonnes per year to 315,000 tonnes per year in line with the announcement of the company’s stage two funding completion and stage three expansion plans.

Pilbara Minerals last week also secured a deal with Chinese companies Jiangxi Ganfeng Lithium (Ganfeng) and Great Wall Motor Company to complete funding for Pilgangoora’s $231 million stage two expansion.

The project will see capacity at the site increase from one million tonnes per year to five million tonnes per year.

Ganfeng will provide $50 million and Great Wall will provide $25 million towards the stage two project.

Posco will provide additional capital, with a proposed $US50 million ($70.3 million) tap sale from an existing bond and future cash flow from stage two operations.

“This should send a clear message about the robust outlook for the lithium market as far as our Tier 1 customer base is concerned and demonstrates the secure position the world-class Pilgangoora project commands as part of a global lithium-ion supply chain that is growing rapidly,” Pilbara Minerals managing director and chief executive officer Ken Brinsden said.

The stage two expansion is scheduled for completion by the March quarter of 2020.

In addition to the completion of stage two funding, Pilbara Minerals is also looking into a stage three expansion to increase capacity further to 6.2 million tonnes a year, and eventually, 7.5 million tonnes a year.

“In much the same way as Pilbara Minerals developed stage one with stage two in mind, stage two will be developed with a stage three expansion clearly in the frame,” said Brinsden.

“In that way, we can maximise the synergies between each development, grow in line with our customers’ expectations and reduce the combined cost of future developments.”