A West Australian project aiming to produce lithium concentrate has secured a US$15 million (AU$20 million) investment from the Clean Energy Finance Corporation (CEFC).
Lithium concentrate is a central component used in electric vehicles and battery storage.
In its first investment in a WA mining project of this type, the CEFC was a cornerstone investor in a US$100 million senior secured bond issued by Pilgangoora Operations Pty Ltd, a wholly-owned subsidiary of ASX-listed Pilbara Minerals Limited.
The bond will finance the development of the Pilgangoora lithium-tantalum project in Western Australia’s Pilbara region.
It will produce lithia raw materials (spodumene concentrate) that can be used to support a full range of lithium products for lithium ion batteries and energy storage solutions.
CEFC chief executive officer Ian Learmonth said the investment was a prime example of how the CEFC could support the development of a strong clean energy supply chain to further enable Australia’s transition to a low carbon economy.
“Lithium is an essential part of the clean energy transition, particularly as we develop enhanced battery storage technologies that will allow us to increase the use of renewable energy, both for large-scale and small-scale projects,” Mr Learmonth said.
“Worldwide demand for lithium is growing, driven by the increasing uptake of electric vehicles that use lithium ion batteries, and by the growth in energy storage solutions requiring lithium supplies.
“The lithium concentrate supplies to be produced by this project will help build Australia’s capacity to supply much needed resources for the clean energy technologies that are set to play a vital role in increasing the use of renewables in our future energy mix.”
Pilbara Minerals managing director and chief executive officer Ken Brinsden said the Pilgangoora project is set to become “one of the most important new sources of hard rock lithium supply to meet burgeoning global demand for lithia raw materials over the coming decades.”
This is the first time the CEFC has participated in a US denominated bond issuance, reflecting its role in creating new sources of finance to support the clean energy market, and demonstrating the potential of various debt instruments to finance greenfield projects.
“Australia is well positioned to play a leading role in supporting the increasing demand for lithium batteries in the future,” CEFC transaction lead Melanie Madders said.
“This project will enhance the delivery of secure and reliable lithia raw materials and bring about the transition to increased renewable energy use in Australia and globally.”
Mr Brinsden said construction of the mine is expected to generate around 300 jobs, with mine commissioning expected to commence towards the beginning of next year.
“Concentrate will be exported from Port Hedland, predominantly to China under existing off-take agreements for processing into lithium carbonate and lithium hydroxide for a wide range of lithium products,” he said.