ASX lithium share Pilbara Minerals Ltd (ASX: PLS) has been raking in a lot of cash over the last couple of years thanks to strong prices for lithium (spodumene). It's the company's plans to expand in other ways in the lithium sector that could help drive shareholder value further.
Earlier this week, Pilbara Minerals told investors about its approval of the demonstration plant.
Final investment decision approval
Pilbara Minerals said that a final investment decision (approval) had been made to progress the construction and operation of a mid-stream demonstration plant at the Pilgangoora operation in a joint venture between the ASX lithium share and Calix Ltd (ASX: CXL).
This project aims to demonstrate the benefits of producing a mid-stream lithium-enriched product using Calix's patented kiln technology which has the potential to reduce hard-rock lithium processing carbon emission intensity.
Pilbara Minerals pointed to studies that estimate that converting spodumene using electric calcination when using 100% renewable energy has the potential to reduce calcination carbon emissions intensity by more than 80%. This would "materially reduce carbon emissions in one of the most energy intensive steps of the lithium battery materials production process."
The ASX lithium share said that being able to deliver a more lithium-enriched mid-stream product has the potential for "industry-wide benefits including reduced transport of waste, greater value creation and utilisation of the mineral resource and unlocking future assets with limited transport infrastructure."
Why Pilbara Minerals is pursuing this new lithium
As reported by the Australian Financial Review, the Pilbara Minerals CEO is excited by the potential to produce a battery ingredient that has seven times more lithium than the spodumene concentrate that Pilbara Minerals and other miners export from the country.
The Pilbara Minerals CEO Dale Henderson said:
We think it has potential to be a fantastic step forward for the industry.
It's a big step up in the lithium, a drop out of the waste, so it is a much more concentrated, compact form which helps with transport volumes which again adds to the carbon reduction
Henderson said that the Calix-powered processing system would use a phosphate-based reagent to "produce a product with closer to 38% lithium." All of the waste is removed, while the lithium would be bonded to phosphorus.
This new lithium product isn't necessarily targeted at manufacturers of lithium iron phosphate batteries. Henderson said:
As it relates to the LFP cathode makers, they are chasing all three [lithium, ferrous elements and phosphates] and this is a two-for-one deal, they are getting the lithium and the phosphate. We've got the potential here to actually access a larger customer base which is pretty neat.
That's not all
Henderson pointed out that this isn't the only way that Pilbara Minerals is looking to expand in the lithium value chain. He said:
There are other potential intermediate products, lithium sulfate, technical grade lithium carbonate to name but a few, and we are continuing to explore those.
Pilbara Minerals share price snapshot
Since the start of 2023, the ASX lithium share has risen by around 35%, as we can see on the chart below.
