The Pilbara Minerals Ltd (ASX: PLS) share price is up more than 2% after the lithium miner announced funding from the government.
Pilbara Minerals is one of the largest lithium miners in Australia, but it has plans to become even bigger.
Funding of $250 million secured
The company announced it has secured a 10-year debt facility from the Australian government, through the Export Finance Australia and Northern Australia Infrastructure Facility agencies, to support the expansion of its Pilgangoora operation in Western Australia.
Each agency will provide $125 million, for a total of $250 million.
This funding has been earmarked to support construction of the P680 Project expansion.
The company said this funding provides “strong validation of the importance of the Pilgangoora operation and Pilbara Minerals’ business to Australia’s critical minerals supply.”
What is the funding for?
The P680 Project expansion to the Pilgan Plant will deliver an additional 100,000 tonnes per annum of spodumene concentrate (lithium) production at an estimated capital cost of $103 million.
It will also support the construction of a 5 million tonne per annum crushing facility and will facilitate future expansions that could ultimately deliver up to 1 million tonnes per annum of spodumene concentrate capacity across the entire Pilgangoora operation at a capital cost of $194 million.
Management commentary
The Pilbara Minerals Managing Director and CEO Dale Henderson said:
We look forward to continuing to work with the Australian Government as we pursue our growth and diversification strategy to further realise our ambition to become a fully integrated, sustainable battery materials supplier.
Final thoughts on the Pilbara Minerals share price
The business’ share price has done astonishingly well this year. It’s up by over 50%.
I think the company’s plans are very promising, with plans to participate in more of the lithium supply chain. But, the shorter-term will depend on how the lithium price performs. There is a lot of demand for lithium with more electric cars. We’ll just have to see how if anything reduces the lithium price in the shorter-term.
I’d be willing to wait for a cheaper entry point for Pilbara Minerals over the next year or two.
