By Martim Facada / June 19, 2018 / www.metalbulletin.com /
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Pilbara Minerals has made the first shipment of direct shipping ore (DSO) from its wholly owned Pilgangoora lithium-tantalum project in Australia.
Via minor and iron ore explorer Atlas Iron, with which it has an offtake deal, Pilbara Minerals miner shipped 85,000 tonnes of DRO from Port Hedland to China on June 16.
Pilbara Minerals has agreed to deliver at least 1 million tonnes of unprocessed lithium-tantalum material from Pilgangoora to Atlas Iron, which will crush the material and sell this DSO under a separate offtake agreement with Sinosteel Australia on a fixed-price basis.
Pilbara and Atlas want to sell up to 1.5 million tonnes of DSO - they aim to sell around 100,000 tonnes per month of DSO to Sinosteel and other customers.
In April, Atlas advanced $3 million to Pilbara Minerals to cover development costs at Pilgangoora as part of this arrangement. The price it paid for this first shipment of DSO was not disclosed, however.
"The start of DSO shipments under our DSO sale agreements with Atlas comes just days after Pilbara Minerals started commissioning the Pilgangoora concentrator and prepare to produce our first-ever batch of spodumene concentrate," managing director and chief executive officer Ken Brinsden said in a statement.
"The DSO operation will generate valuable early revenue and cash-flow for the company while we progress the commissioning and ramp-up of the main long-term concentrate operation,"he added.
The shipments also give customers access to lithium units that "might not otherwise have been available," which in turn facilitates further investment in downstream facilities in China, Brinsden told Industrial Minerals.
This comes at a time when spodumene prices remain at historic highs. Lithium spodumene min 5-6% Li2O on a fob Australia basis* has risen by around 56% in the past two years to $855-925 per tonne, according to Industrial Minerals' latest monthly assessment on May 30, from $540-600 per tonne in June 2016.
*All lithium carbonate, hydroxide and spodumene prices are available in Industrial Minerals Battery Raw Materials Market Tracker.