Green mining: CEFC takes $51m stake in lithium producer

The Clean Energy Finance Corporation is now looking at playing a key role in the transformation of Australia’s mining sector towards a greener future after boosting its stake in a ‘sustainable’ lithium producer by $51 million.

The CEFC made the additional $51 million investment in Western Australian lithium producer Pilbara Minerals, which it says will help boost Australia’s supplies of the key material used in battery manufacture, as well as supporting the mining company to green its operations.

The investment will be used to expand operations at the company’s Lithium-Tantalum project, known as the Pilgangoora project, located around 120km from Port Hedland in Western Australia and which holds one of the world’s largest resources of raw lithium material.

The investment follows an initial investment in Pilbara Minerals by the CEFC of $21 million made in 2017 and forms part of a larger, $153 million investment facility that has been created for Pilbara Minerals in partnership with BNP Paribas.

“The CEFC is proud to strengthen our commitment to a company forging a new path for our resource sector while helping Australia transition to a low carbon economy,” CEFC CEO Ian Learmonth said.

“The development of a renewable supply chain is critical to our clean energy future. Pilbara Minerals is helping build Australia’s capacity to supply much-needed resources for the clean energy technologies that will play a vital role in increasing the use of renewables in our future energy mix.”

“CEFC finance enables this important work to continue when it steps up during times of economic uncertainty and we hope that this syndicated facility will allow the opportunity for other banks to participate shortly,” Learmonth added.

Through the investment, Pilbara Minerals has agreed to undertake a range of sustainability measures at the Pilgangoora project, including the installation of renewable energy systems on-site, emissions measurement and monitoring, and the development of a plan to achieve zero net emissions at the project in the future.

“In recognising the importance of minimising our impact on climate change, we are now embarking on a pathway to achieve net-zero emissions at our operations, an objective that goes to the heart of who we are and our purpose,” Pilbara Minerals CEO Ken Brinsden said.

Pilbara Minerals has also committed to undertaking financial reporting in line with the recommendations of the Task Force on Climate-related Financial Disclosures, which will require the company to assess and disclose the risks posed to the company and its operations by climate change.

The CEFC sees investments in the extraction of lithium as a key step in establishing adequate supplies of the materials needed to produce lithium-ion batteries that will have flow-on benefits for the emergence of energy storage systems and electric vehicles.

“The increasing uptake of electric vehicles that use lithium-ion batteries, and the growth in energy storage solutions requiring lithium supplies is driving worldwide growth in demand for lithium,” the CEFC’s head of Western Australia and resources Rob Wilson said.

“Lithium is also an important component of Australia’s future energy mix. Residential and commercial-scale battery storage systems are helping increase the penetration of renewable energy, while electric vehicles will be critical to the decarbonisation of our transport sector.”

In addition to federal government support, the Western Australian state government is also heavily backing the state’s resources sector to pivot towards supplying materials to the rapidly growing battery sector, having identified that the state holds deposits of virtually all the raw materials needed to produce lithium-ion batteries.