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Pilpara Minerals signs landmark deal with Posco
Australian lithium developer, Pilbara Minerals Limited announces that it has entered into a broad-based strategic relationship with leading South Korean industrial conglomerate Posco encompassing long-term off-take, strategic funding and joint venture participation in a downstream conversion plant in South Korea which provides Pilbara a first-mover position in this fast-growing market.
The landmark agreements encompass binding off-take for an initial 80,000tpa of chemical grade spodumene concentrate from the 5Mtpa Stage 2 Pilgangoora Project, increasing up to 240,000tpa on Pilbara’s participation in the Downstream Joint Venture conversion plant, and an immediate upfront A$79.6 million direct equity investment by POSCO – the first by a South Korean manufacturer of lithium-ion battery materials into an upstream spodumene concentrate producer. With Stage 1 of Pilgangoora fully funded, the proceeds from the A$79.6 million equity investment will be applied to accelerate plans to bring the 5mtpa Stage 2 expansion of the project into production as soon as possible.
POSCO is rapidly expanding its capabilities in the production of battery grade products and cathode materials for the burgeoning battery materials market in the Asian region.
The relationship is significant for both POSCO and Pilbara. For POSCO, it represents the first direct investment by a South Korean manufacturer of lithium-ion battery materials into an upstream supplier of spodumene concentrate, facilitating the further commercialisation of its proven PosLX extraction technology.
For Pilbara Minerals, the relationship marks an important strategic expansion into North Asia, diversifying its customer base outside of the Chinese market and further expanding its global network of Tier 1 strategic partners to support its growth objectives to become a leading global supplier of lithium raw materials.
The Stage 2 off-take agreement accounts for up to 30% of the expanded production capacity from the Pilgangoora Project following the Stage 2 expansion – and is earmarked for supply into a jointly-owned downstream processing conversion facility located in South Korea, in which Pilbara would hold an investment of 30%.
Commenting on the agreement, Pilbara Minerals’ Chairman, Tony Kiernan, said:
“We are delighted to have secured a wide-ranging strategic relationship with a blue-chip partner such as POSCO, giving us a strong first-mover position in the rapidly growing North Asian lithium markets. This represents the culmination of extensive discussions during which we have established a strong relationship, which I am confident will bring significant benefits to both parties. We look forward to welcoming POSCO as a strategic investor, a long-term off-take partner and a joint venture partner in a future downstream chemical conversion facility in South Korea.”