A massive deposit of lithium, a high demand commodity and a key component in batteries for mobile computing, home energy storage and electric cars, has been confirmed in the Pilbara.
The Pilgangoora project in Western Australia is now one of the biggest lithium ore (spodumene) deposits in the world, according to its owner Pilbara Minerals.
The hard rock lithium-tantalum resource has the potential to support a high quality lithium mine to supply global markets.
Lithium is a critical component of the lithium-ion batteries made by Tesla used to power its high-performance electric cars and the Powerwall, its home power storage unit.
Lithium has been one of the few commodities for which prices have been sustained over recent months in the global commodities rout. Australian fund manager Paragon estimates that demand will continue to increase by around 10% a year.
Drilling and testing from October to December shows the area has 80.2 million tonnes of ore containing at least 1 million tonnes of lithium oxide, about 54% higher than previous estimates.
A short time ago, Pilbara Minerals shares were down 5.5% to $0.345.
“This resource upgrade cements Pilgangoora’s status as a significant new global lithium project, second only to the world-class Greenbushes spodumene deposit (also in Western Australia),” says Pilbara Executive Director Neil Biddle.
“Its scale, quality and grade — combined with its location, access to infrastructure and close proximity to key Asian markets has propelled it to the forefront of new lithium projects worldwide.”
Biddle says drilling will resume in March and is expected to result in further significant increases in the overall resource inventory.
“Pilgangoora clearly has the potential to transform Pilbara into a significant player in the global lithium market over the next few years, and we are all very focused on achieving our core objective of demonstrating the economic potential of the Pilgangoora resource and bringing the project into production as quickly as we can,” he says.
He says the Pilgangoora Project is a globally significant hard rock lithium-tantalum resource with the potential to underpin a world-class, long-life mine producing high quality lithium concentrates for global markets.
Currently most of the world’s supply of Spodumene, a hard rock mineral containing lithium, comes from Greenbushes in Western Australia. And another source in the US, Albemarle, mostly supplies its own needs.
Global average Lithium contract prices have risen to $US6,000 per tonne and more recently the domestic spot prices in China have hit $US14,000.