Shares were inching up for Pilbara Minerals [ASX:PLS] earlier this morning (28/11/2022) after the major lithium miner explained its latest joint venture (JV) with Calix [ASX:CXL], a batteries, renewables, and agricultural solutions developer with key innovative technology.
The two are joining forces to develop a mid-stream demonstration plant at Pilbara’s Pilgangoora Project in order to optimise lithium salts production and its potential commercialisation.
Pilbara’s shares rose 1.5% in value, even as Calix shares dropped by the same degree.
The PLS share price has risen 40% in the year so far and is performing better than several of its lithium-minded peers. Yet comapared to Global Lithium [ASX:GL1], Core Lithium [ASX:CXO], and Anson Resources [ASX:ASN], not so much — these are up 141%, 119%, and 67% in the year, respectively:
Source: Tradingview.com
The demo plant JV
The lithium developer presented an outline of its latest JV with Calix. The deal was for both parties to collaboratively develop a mid-stream demonstration plant at PLS’s existing Pilgangoora Project — which is based 120km south of Port Hedland, WA, around 55kms from the flagship Tabba Tabba Project.
The mid-stream demo plant is expected to produce superior-value lithium from salts to be refined using Calix’s patented 100% renewable energy calcination technology.
This lower-cost production method, which has been found to reduce carbon energy intensity simultaneously with less waste production, could also lead to future commercialisation.
Pilbara will have a 55% interest in the project and Calix 45%, each company intending to fund its own share of both operating and capital expenses.
Calix will also have a 10% ‘in-kind contribution,’ which will be presented in budget estimations and construction costs, an arrangement made as a returned favour for Calix footing necessary worldwide licensing royalty fees.
CXL will be undertaking licensing processes in readiness to use its patented technology for the project, as well as calcination information needed to optimise the JV, while Pilbara will be managing the running of the demo plant, including supervision of constriction and operations.
PLS’s CEO Dale Henderson stated:
‘It’s a great privilege to enter this JV partnership with Calix. The Mid-stream project has the potential to be a game changer for our industry. If successful, we will be able to deliver a superior chemical intermediary product to market compared to spodumene concentrate. This is world-first Australian technology, being developed by two great Australian companies on Australian soil, with the support of the Australian Government — this is an exceptional opportunity for all of us.’
Calix’s CEO Phil Hodgson added:
‘We are excited to join forces with Pilbara Minerals and formalise our close working relationship built over the past 18 months. We will apply our combined capabilities to generate a more sustainable and valuable Australian lithium product.’
Globally commercialised aspirations
If the calcination technologies used at the demo plant prove a success, the companies expect to progress the project as a commercialised strategy.
This will be the next logical step, with the companies using the existing JV licensing and Calix’s specialised technology to promote the project to the worldwide spodumene processing sector.
A Final Investment Decision (FID) is slated for the demo plant at the end of the June Quarter next year, before which both PLS and CXL intend to step up engineering design work and feasibility studies.
Both parties have also already begun a market engagement program, which they expect to complete next October.
A grant of $20 million, to be issued by the Australian Government under the Modern Manufacturing Initiative, is also in the pipeline for the mid-stream project, anticipated before the FID.
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Regards,
Mahlia Stewart,
For The Daily Reckoning Australia
