Altura Mining will expedite plans to double the capacity of its Pilgangoora lithium project 120km south of Port Hedland on the back of burgeoning demand for its product. 

The company today announced it would start a definitive feasibility study immediately to boost output from Pilgangoora from 220,000tpa to 440,000tpa of spodumene (6 per cent lithium oxide).

The James Brown-led miner envisages duplicating the size of its production plant, which is already 50 per cent complete.

The company has already begun mining at Pilgangoora with commissioning of its plant planned for the first quarter of next year and commercial production expected by the end of the second quarter.

It already has binding offtake agreements with major shareholder J&R Optimum Energy for 100,000tpa and Lion Energy, also for 100,000tpa, covering 90 per cent of planned production from stage one.

Altura hopes to complete the definitive feasibility study for stage two by April next year and estimates first production from its expanded project will come 17 months after a final investment decision or sooner with early ordering of long lead items.

The company believes Pilgangoora’s minelife will remain at 10 years-plus despite the doubling of production based on an upgraded mineral resource estimate of 44 million tonnes at 1 per cent for 441,000t of contained lithium oxide and a revised ore reserve estimate of 34.2 million tonnes at 1.04 per cent for 357,000t of contained lithium.

Altura will continue drilling next year to the south of its main pit to further shore-up its resource inventory and provide additional mine life for the project.

Managing director Mr Brown said the company continued to see strength in the lithium market and positive demand signals from offtakers.

“Using existing designs and other parameters this effective duplication should be relatively straightforward and result in no disruption for our stage one production,” he said.

News of the expansion is likely to provide a boost for NRW Holdings, which already has a $110 million, five-year contract with Altura for building mine infrastructure, developing haulage roads, drill and blast services and loading and haulage of ore and overburden.

Under the expansion plans, NRW would introduce a night shift and 24-hour operations compared to the existing day shift roster.

NRW estimates the proposed expansion would potentially generate about $20 million of additional revenue a year.

In October, Altura, which counts US investment giant BlackRock among its shareholders, squared away a $US110 million debt facility for stage one construction costs.

Mr Brown said the stage two expansion could be funded by either debt, equity or offtake prepayment or a combination of all.

Proving steady state operations during stage one would open up more fundraising options for the company on significantly improved terms, he said.

Last month, Altura’s Pilbara neighbour Pilbara Minerals announced a deal with Chinese car manufacturer Great Wall to underwrite the development of stage two of its Pilgangoora project to boost output from 330,000tpa to 800,000tpa.

 

Picture: Altura Mining Managing Director James Brown. The West Australian