The Pilbara Minerals Ltd (ASX: PLS) share price is under the spotlight today on a joint venture announcement with Calix Ltd (ASX: CXL).
Pilbara is a major lithium business, with one of the world’s largest hard rock lithium operations.
Calix provides technology that aims to deliver a “positive global impact” by providing “environmentally friendly solutions” for water treatment, CO2 mitigation, biotechnology, advanced batteries, and more sustainable mineral and chemical processing.
Pilbara Minerals joint venture
The two businesses have executed a joint venture agreement for the development of a demonstration plant at the Pilgangoora project with the aim of producing lithium salts through an “innovative midstream ‘value added’ refining process utilising Calix’s calcination technology, as well as for the potential for commercialisation of the process.”
Pilbara Minerals explained that the objective of the mid-stream demonstration plant project is to deliver a “superior value-added lithium product enabling lower product cost, reduced carbon energy intensity, and reduction of waste product logistics.”
Calix will have 45% of this joint venture, while Pilbara Minerals will own 55%. Each party will fund their share of operating and capital costs, and Calix licensing their patented technology and “calcination knowhow” into the JV.
Pilbara Minerals will manage the demonstration plant at the Pilgangoora project, overseeing both the construction and operational phases.
Calix will have a 10% “in-kind” contribution recognised on the budgeted estimated construction costs of the demonstration plant in return for Calix providing an exclusive, worldwide royalty free licence for its calciner technology to the JV for lithium processing applications.
What happens next?
Pilbara Minerals said that a successful demonstration of the calcination technology through the demonstration plant may then lead to its commercialisation with the JV licensing the technology to the global spodumene processing industry.
To support a final investment decision in relation to the development of the demontration plant, which is now targeted by the June quarter 2023, the two businesses have continued to progress engineering design work and feasibility studies for the demonstration plant and commenced a market engagement program following generation of market samples via a pilot test work programme completed in October.
Final thoughts
I don’t know much about Calix, but Pilbara Minerals seems motivated to do the joint venture. If it works out then it could be good news for both businesses. The Pilbara Minerals share price hasn’t done much in response to this update, though it has gone up significantly over the last few months.
