Australia to propose tax incentives for critical minerals
The proposed law will set up a tax incentive worth 10% of relevant processing and refining costs for 31 critical minerals.
Australian lithium producer Pilbara Minerals (ASX: PLS) has increased its sales contract with Ganfeng over the next three years and has the option to further boost the spodumene concentrate tonnage sold to the major Chinese lithium firm.
The updated agreement, originally inked in 2017, spans 2024, 2025 and 2026 with a total allocation of up to 310,000 tonnes per annum (ktpa) from the company’s flagship Pilgangoora operation in Western Australia.
“We are delighted to be expanding our valued relationship with Ganfeng, who has extensive capability in the production of battery grade lithium products with over 20 years of industry experience and rapidly expanding global footprint as a major global supplier,” managing director and chief financial officer Dale Henderson said in the statement.
All concentrate sold will be based on the prevailing market price, Pilbara said. It noted the increased supply to Ganfeng is separate from the company’s strategic partnership process, which continues to progress in parallel and is expected to conclude in the March quarter 2024.
The tie-up seeks to explore opportunities joint opportunities in downstream lithium conversion, Pilbara said.
The company, Australia’s largest independent lithium miner, has been investigating how it can add value to its hard rock spodumene ore as it aims to grow its business. As part of this plan, it is building a demonstration plant to process lithium from Pilgangoora.
The technology, if powered by renewable energy, could cut carbon emissions by more than 80% in one of the most high energy steps of the lithium battery materials production process.
The plant is expected to allow Pilbara Minerals to produce one million tonnes of spodumene concentrate next year.
