The Pilbara Minerals Ltd (ASX: PLS) share price is trading lower on Wednesday morning despite some big news.
At the time of writing, the lithium miner's shares are down 1% to $4.80.
What's going on with the Pilbara Minerals share price?
The Pilbara Minerals share price is falling on Wednesday after broad market weakness offset the release of an update on its mid-stream plans.
According to the release, a final investment decision (FID) has been made to progress the construction and operation of a Mid-Stream Demonstration Plant at the Pilgangoora Operation. This will be through a joint venture between Pilbara Minerals and Calix Limited (ASX: CXL).
The release notes that the project aims to demonstrate the benefits of producing a mid-stream lithium-enriched product using Calix's patented electric kiln technology. This technology has the potential to reduce hard-rock lithium processing carbon emission intensity if powered by renewable energy.
Pilbara Minerals highlights that independent life cycle assessment studies estimate that converting spodumene using electric calcination when using 100% renewable energy has the potential to reduce calcination carbon emissions intensity by >80%.
It notes that this would materially reduce carbon emissions in one of the most energy-intensive steps of the lithium battery materials production process.
What will it cost?
Management estimates that the construction costs of the Mid-Stream Demonstration Plant will be $104.9 million. This will be partially funded with a $20 million Australian Government grant, with Pilbara Minerals funding $67.4 million of the remaining budgeted construction expenditure.
But it could be worth the investment. As well as potentially reducing carbon emissions, the company will look to commercialise the technology should it be successful. It also has the right to a licence to use the electric calcination technology for its own mid-stream or downstream commercial scale plants in the future.
'Potential to be a game changer'
Pilbara Minerals' managing director and CEO, Dale Henderson, is very optimistic on the plans. He said:
Following further studies and pilot test work, we are delighted to be taking the next step in our mid-stream strategy with the construction and operation of a Mid-Stream Demonstration Plant with our JV partner Calix. The mid-stream strategy has potential to materially improve the battery materials supply chain for lithium through reduction in carbon energy intensity, reduction in transport volumes and creating more value at the mine site. It has the potential to be a game changer compared to the traditional spodumene to chemicals processing route.
