Australian lithium developer, Pilbara Minerals announced that the first step in its broad-based strategic relationship with leading South Korean industrial conglomerate POSCO has completed, with the Company welcoming POSCO as a 4.75% shareholder in the Company following receipt of funds totalling A$79.6M.
The equity funds received will support the planned A$207M expansion of Stage 2 of the Pilgangoora Project to 5Mtpa, when combined with expected funding co-commitments to access additional Stage 2 concentrate tonnes from existing strategic customers, Ganfeng (A$65M) and Great Wall Motor Company ($US50M). The previously announced landmark agreements with POSCO (28 February, 2018), encompass Stage 2 offtake, additional funding on attractive terms for the Company’s downstream joint venture participation in the form of a convertible bond facility and the proposed near-term joint development of a chemical conversion facility in South Korea.
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 which manufactures very highgrade lithium hydroxide (or lithium carbonate) for the battery industry from hard rock spodumene concentrate.
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.
“We welcome POSCO as a strategic investor in Pilbara Minerals and look forward to a mutually beneficial relationship over many decades to come. Like many of the more important players in the lithium raw materials industry, POSCO has recognised the important part that hard rock spodumene has to play as a feedstock to the battery materials industry for its continuous quality, stability of supply, low jurisdictional risk and ultimately lowcost of production, especially to Battery Grade hydroxide products,” said Ken Brinsden, Pilbara Minerals Managing Director and CEO.
For further information about the strategic relationship and the transactions entered into with POSCO – including the Stage 2 offtake agreement, a $79.6 million convertible bond facility and the key commercial principles of the proposed downstream joint venture for a lithium hydroxide/lithium carbonate conversion facility, please refer to the Company’s ASX release dated 28 February 2018.
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