Pilbara Minerals managing director and chief executive officer Dale Henderson.
Pilbara Minerals chief Dale Henderson said the 63 per cent premium price which Albemarle Corporation has offered to acquire Liontown Resources reflects the current state of play in the lithium industry.
Henderson told the Australian Financial Review that there is long-term scarcity in the sector, something which has further motivated Pilbara Minerals to accelerate expansion of its Pilgangoora lithium mine in WA – the largest independent hard-rock lithium operation in the world.
Pilbara Minerals announced on Wednesday it would move ahead with adding another 320,000 tonnes to Pilgangoora’s lithium production capacity, bringing the mine to a one-million-tonne-per-annum operation.
The expansion – or the P1000 project – will leverage the company’s earlier investment in a new primary rejection-heavy media separation circuit and integrated crushing and ore-sorting facility.
The P1000 project has an estimated capital cost of $560 million, which is expected to be funded by the company’s strong balance sheet and ongoing cashflow from Pilgangoora.
“The P1000 project expansion is an important milestone for Pilbara Minerals,” Henderson said to the ASX.
“This expansion step facilitates a major lift in production capacity, capitalising on the substantial scale of this Tier-1 hard rock asset which underpins a ~25-year* mine life at this new expanded production level.”
Henderson said the Pilgangoora project was one of the few hard-rock lithium operations globally that had both the resource size and existing operating platform to enable such a rapid scale-up of production.
The P1000 project is targeting first ore in the March quarter of 2025 and full production following commissioning and ramp-up by the end of the September quarter of 2025.
Pilbara Minerals will consider various avenues to maximise value from the additional production capacity, including long-term spodumene offtakes with existing and new customers, as well as potential partnerships that further establish the company downstream.
After Albemarle’s Liontown bid was publicly announced this week, Liontown swiftly rejected the offer suggesting it was “opportunistically timed”.
The $2.50-per-share offer follows on from two prior Albemarle bids in October 2022 and earlier in March, where the company proposed $2.20 per share and $2.35 per share, respectively.
*~ represents ‘approximately’.