Australia's PLS greenlights $1.3 billion expansion to lift Pilgangoora lithium output

Oct 16 (Reuters) - Australia's PLS Group PLS.AX has approved a final investment decision for its A$1.9 billion ($1.31 billion) project at its hard rock lithium mine Pilgangoora Operation, betting on long-term growth in demand for the key battery-making ingredient.

The lithium producer said on Friday the P2000 project will lift the spodumene concentrate production at its flagship project in Western Australia to nearly 2 million tonnes per annum (mtpa) through the construction of a new Jimmagunya processing plant.

The investment comes as energy transition and growth in battery storage continue to support the long-term demand for lithium. Companies worldwide are racing to secure the metal, which is used in electric vehicles and batteries.

PLS, formerly known as Pilbara, said the project would lift average annual production to about 1.97 million tonnes of spodumene concentrate over the first 10 years of steady-state operations, while lowering average unit operating costs to around A$620 per tonne.

The company plans to invest a further A$600 million to A$650 million in supporting infrastructure, including a new accommodation village, road upgrades and maintenance facilities, while funding the development from its A$2.3 billion cash balance and operating cash flows.

The project is expected to begin production in the September quarter of 2029 and create more than 1,000 construction jobs.

The company also revised its FY27 capital expenditure forecast to be between A$1.11 billion and A$1.18 billion to incorporate the P2000 expansion and associated infrastructure spending.

($1 = 1.4449 Australian dollars)