The Pilbara Minerals and POSCO joint venture (JV) has secured $682 million funding for the construction of a lithium hydroxide monohydrate chemical plant in South Korea.
The loan agreement has been executed with two government-owned banks in South Korea.
The chemical plant, which is currently under construction in the Gwangyang region, is projected to convert approximately 315,000 tonnes of spodumene, sourced solely from Pilbara Minerals’ WA lithium operations, into lithium hydroxide.
The loan represents the remaining 60 per cent of the forecast costs required for the project’s development.
Pilbara Minerals’ managing director and chief executive officer Dale Henderson said he was very happy with the debt funding.
“Construction of this world-class facility is already well underway, with the first train of 21,500 tonnes per annum (tpa) scheduled to start commissioning from late this year, followed by commissioning of the second 21,000tpa train in the March 2024 quarter.
“Our 18 per cent interest in the POSCO–Pilbara JV represents a key element of Pilbara Minerals’ downstream processing strategy, enabling the company to become an integrated lithium raw materials company.
“Building on our strong relationship with POSCO, we are delighted to be jointly establishing a strong foothold in South Korea’s emerging battery materials industry at the doorstep of established major battery manufacturers.”
There is an enormous demand for lithium globally, as it is one of the key components in batteries. Consequently, lithium supply goes hand in glove with the push for renewable energy.
Earlier this week, Mineral Resources (MinRes) reported massive profits in its half-yearly financial report driven by record lithium earnings. The company reported earnings before interest, tax, depreciation, and amortisation (EBITDA) of $939 million, a 503 per cent jump from the same period last year.
MinRes also recently splashed close to $1 billion for an interest in lithium processing plants in China. The transaction, if approved, will see MinRes take a 50 per cent stake in Albemarle’s plants in Qinzhou and Meishan.
MinRes managing director Chris Ellison told the Australian Financial Review that the offshore investment would ensure the company could convert Wodgina spodumene into battery-grade chemicals in the short term.
“Doing more here in Australia is my preference over the long term,” Ellison said. “Any potential future hydroxide plant in Australia that could take our spodumene is some years off.
“We need capacity today.”