Pilbara Minerals Ltd. (ASX:PLS) announced that it has signed a non-binding memorandum of understanding (MOU) with Polaris Shipping. Under the MOU, Pilbara, Polaris and LG Chem Ltd. (KRX:051910) will begin preliminary discussions regarding a potential joint venture for a downstream lithium chemical conversion facility servicing South Korea.
As quoted in the press release:
Polaris Shipping has recently announced that it has also signed a Memorandum of Understanding with the Saemangeum Development and Investment Agency (SDIA) in support of the Lithium Korea chemicals development. SDIA is the lead government agency for the Saemangeum Industrial Complex, the proposed location of the downstream Lithium Chemicals Facility.
While discussions are at an early stage, the Company looks forward to the opportunity of continuing further discussions with Polaris Shipping and LG Chem, which may lead to commercial terms being agreed and a formal joint venture being established for the downstream project.
Ken Brinsden, managing director of Pilbara, commented:
South Korea is a major global economic and industrial power with a very large and rapidly growing high-technology industrial complex and automotive industry. Discussions like these present an opportunity to work alongside two of South Korea’s leading conglomerates to participate in the development of a world-leading downstream lithium chemicals facility servicing the rapidly growing lithium-ion battery industry in South Korea.
This is consistent with our broader objective as a company to participate in downstream chemical facilities where this makes sense for us as an upstream supplier of spodumene concentrates, and to diversify our global sales arrangements. “Given the scale of the existing Resource and Reserve at Pilgangoora – and the potential to continue to grow it with ongoing drilling – we have plenty of capacity to support both our existing customers in China and new customers elsewhere. It’s fair to say that Korean lithium raw material demand is now well and truly on the radar.