Under a mine gate sales deal, Atlas Iron (ASX:AGO) has shipped the first 85,000 wet metric tonnes of direct-shipping ore (DSO) from Pilbara Minerals’ (ASX:PLS) Pilgangoora project.

The two companies are set to ship close to 100,000 wet metric tonnes of DSO per month from the Western Australia-based lithium-tantalum project for a total of up to 1.5 million wet metric tonnes.

The first shipment, which left Port Hedland on Saturday (June 16), went to China after having been acquired by Sinosteel through an offtake agreement between Atlas and the Chinese steelmaker.

“This marks another exciting step in the emergence of Pilgangoora on the world stage as a major new supplier of lithium raw materials,” Managing Director and CEO of Pilbara Ken Brinsden said.

“This first DSO shipment represents the first product sold from our new world-class mine that has left Australian shores bound for customers in China,” added Brinsden.

Brinsden also highlighted Pilbara’s recent commissioning of the concentrator at Pilgangoora, while saying the ongoing DSO shipments will help create more income for the company.

“The DSO operation will generate valuable early revenue and cash-flow for the company while we progress the commissioning and ramp-up of the main long-term concentrate operation,” he explained.

Pilgangoora boasts current life-of-mine revenue of AU$9.23 billion and life-of-mine project EBITDA of AU$4.22 billion, over an estimated 36-year mine life.

According to Pilbara, over 100 percent of projected lithium oxide production from the project has already been claimed in binding offtake agreements or memorandums of understanding with major partners in China, Japan, Europe and the Americas.

One of the binding offtake agreements Pilbara is locked into is with General Lithium, a Chinese supplier of lithium products and materials, for the supply of 140,000 tonnes per year of 6 percent chemical-grade spodumene (lithium ore) concentrate from Q1 2018 for a six-year period.

Atlas has been in the news recently due to a three-way battle for the company between Hancock Prospecting, Fortescue Metals Group (ASX:FMG) and Mineral Resources (ASX:MIN). A subsidiary of Hancock Prospecting recently made a AU$390-million takeover bid for the company.

The firm’s access to Port Hedland is reportedly the reason it’s receiving so much attention.

At close of day Monday (June 18), Pilbara was sitting at AU$0.90, up 1.12 percent. Its share price is down 23.73 percent year-to-date, but is up 143.24 percent in the last year.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.