\u201cPilgangoora sits right at the heart of it. You couldn\u2019t ask for a better place to be constructing a mine. It is so close to key infrastructure \u2013 the port of Port Hedland, power supply and the road networks.\u201d<\/p>\n
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Energising China<\/strong><\/p>\n Another parallel between lithium and iron ore in the Pilbara is the role of China, which is currently demanding lithium raw materials in record quantities in the same way it pursued iron ore.<\/p>\n Brinsden said while some sceptics may still view this surge in demand as a \u2018flash-in-the-pan\u2019, he believes this opinion could not be further from reality.<\/p>\n \u201cIt\u2019s really phenomenal what is going on, especially in China. The speed with which they are building out their lithium ion supply chain and at the higher quality end is phenomenal,\u201d Brinsden said.<\/p>\n \u201cThe evidence is not just in the growth of battery-making capacity but it is also the price they are paying for the raw material. The reason they are paying the high prices is because there is a fundamental shortage.<\/p>\n Brinsden added: \u201cThe phenomenon about the resources industry is that when it is put under pressure to grow, the supply will introduce new tonnes which are at higher costs than what was developed historically. As a result, the cost base shifts which means the price must also shift.\u201d<\/p>\n Project progress<\/strong><\/p>\n In 2016, Pilbara Minerals focused on de-risking the Pilgangoora project by securing several key milestones, including the native title agreement and mining lease.<\/p>\n These milestones led to another important achievement in January when it awarded the engineering, procurement and construction (EPC) contract to Australian services company, RCR Tomlinson.<\/p>\n The contract, which is worth a maximum $148 million, involves the EPC of Pilgangoora\u2019s two million tonnes per annum lithium-tantalum processing plant, including wet-and-dry circuit with concentrator, associated plant and commissioning of the mine.<\/p>\n RCR selected sub-contractors \u2013 Primero and Minnovo \u2013 to provide it with technical and engineering support during the contract. Both subcontractors have previous experience in the lithium sector.<\/p>\n \u201cWe were very lucky, we had a competitive tender process and some tough decisions to make in how we would do it. The consortiums that were put together were very capable and cost effective\u2026it was an embarrassment of riches really,\u201d Brinsden said.<\/p>\n \u201cThe RCR consortium (of companies) are very capable operators and have a proven track record, even to the point where they are already operating in the lithium industry, which is very rare in WA.\u201d<\/p>\n Brinsden said the company was working towards awarding additional services contracts for the development of Pilgangoora and beyond.<\/p>\n \u201cThat is all happening in parallel. There will be lots of minor contracts that relate to the balance of the construction on site \u2013 things like installation, road construction, road upgrades and rail crossings,\u201d Brinsden said.<\/p>\n \u201cThen, in addition, the one we have to work through is for the actual mining enterprise, including the mining contract.\u201d<\/p>\n Post-boom Pilbara<\/strong><\/p>\n Pilbara Minerals is also finding cost-friendly opportunities in the aftermath of the mining investment boom in the region.<\/p>\n Brinsden said Pilgangoora\u2019s development process was being aided by the remnants of the wide-spread construction of mines during the past decade.<\/p>\n \u201cIt translates into some good opportunities for Pilbara in terms of pricing, the availability of the resources and even out-of-the-box opportunities like buying things second hand,\u201d Brinsden explained.<\/p>\n \u201cThere are lots of things that are now available or redundant to previous activities that we are able to pick up very cheaply. We have bought a 300-man camp from the Roy Hill project and we have done that very cost effectively in comparison with buying new.\u201d<\/p>\n Brinsden described the past decade in the Pilbara as an \u2018extreme scenario\u2019, which had left many redundant camps, building shed and even processing plants behind.<\/p>\n \u201cSome of those things are a big advantage to the likes of Pilbara (Minerals) who are constructing. Having said that I think it is true that the whole industry has turned the corner and things are getting busier again,\u201d he said.<\/p>\n \u201cYou would have to expect then that things will get a little bit more competitive, but perhaps nothing like that hyperinflation environment that existed in the Pilbara as recently as four years ago.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"