Pilbara Minerals Ltd (ASX:PLS) has executed a deal with Great Wall Motors, one of China’s largest automotive manufacturers, to further underpin the Stage 2 expansion of its Pilgangoora Lithium Project in Western Australia.
Under the deal, Great Wall will take a $28 million placement in Pilbara, which will give it a stake of around 3% in the company and will also provide up to $US50 million in debt funding.
At current prices, the 150,000 tonne per annum of offtake to Great Wall has a market value of circa $US135 million a year.
The Great Wall offtake will help underpin Pilbara’s plans to lift the output of Pilgangoora from its initial 2 million tonnes per annum processing capacity to 5 million tonnes.
Great Wall is already one of China’s biggest car makers, producing more than 1 million cars a year mostly for the Chinese market, and has released its first electric and hybrid vehicles in the past year.
The company is aiming to produce around 500,000 electric and hybrid cars a year by the early 2020s.
Recent reports from China say the country is planning to eventually have only electric vehicles on its roads as part of its long-term plans to address pollution.