MELBOURNE: Australia’s Pilbara Minerals agreed to a study with Chinese customer Ganfeng Lithium on options to build a 32,000 tonne-per-year lithium conversion facility in a country yet to be decided, the companies say.

The feasibility study for the plant that could produce lithium carbonate or hydroxide is expected to be completed in the March quarter of 2025.

The parties are considering a number of locations for a plant, including Australia, to explore greater geographical diversification in the battery chemicals supply chain, the country’s biggest independent lithium miner said in an exchange filing.

Pilbara Minerals already has a joint stake with South Korea’s Posco in a lithium hydroxide plant and a tie-up with Calix Limited for the construction of a midstream lithium chemicals demonstration plant in Western Australia.

The feasibility study will also include in its assessment the potential production of a midstream lithium chemical product to help cut transportation volumes and the carbon footprint.

“Preliminary engagement with several countries has indicated strong interest in establishing lithium chemical production with potential economic, taxation and funding incentives on offer, together with access to land and offers of assistance with permitting and approvals,” the Pilbara Minerals filing said.

If the joint venture proceeds, the parties intend to own the project 50:50, but Ganfeng is open to selling down its stake, depending on potential benefits from the US Inflation Reduction Act subsidy scheme that has American sourcing requirements, the companies said.

Pilbara Minerals is expanding production to one million tonnes of spodumene a year. It has committed to supply 300,000 tonnes of spodumene a year for the project if it goes ahead.

It will decide in the June quarter whether to expand production capacity beyond one million tonnes a year, it said in the statement.

Pilbara Minerals is a lithium and tantalite mining company, with its headquarters in Perth, Western Australia.

The company was founded in January 2005 as Portland Internationaland in November 2007 it diversified into gold mining, buying two prospecting licences in the Goldfields-Esperance region of Western Australia.

 - Reuters