The Pilbara Minerals Ltd (ASX: PLS) share price is pushing higher on Monday.
In afternoon trade the lithium miner's shares are up 1.5% to $1.06.
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Why is the Pilbara Minerals share price pushing higher?
Investors have been buying Pilbara Minerals shares today following the release of a positive announcement.
According to the release, Yibin Tianyi Lithium Industry Co will provide a US$15 million unsecured prepayment to Pilbara Minerals' operating subsidiary, Pilgangoora Operations. This will be used to fund the A$22 million improvement works underway on Plant 1 at the operation.
The release explains that the prepayment is in support of Pilgangoora Operations providing up to a further 40,000tpa of spodumene concentrate product to Yibin Tianyi Lithium Industry Co following the successful commissioning of the Stage 1 improvement works.
These are expected to occur in the September quarter and will increase its production capacity by ~30,000 to 50,000tpa at Plant 1.
Management notes that this increased offtake is in addition to the existing 75,000tpa, five-year offtake agreement with Yibin Tianyi announced last year. This will mean its offtake agreement increases to a total of up to 115ktpa of spodumene concentrate.
Management commentary
Pilbara Minerals Managing Director and CEO, Ken Brinsden, commented: "Our relationship continues to grow with Yibin Tianyi as we work together in support of both our businesses' growth ambitions. For Yibin Tianyi, to become one of the biggest lithium chemical suppliers in China with the support of our major shareholder, CATL and for us to become one of the largest, lowest cost lithium raw material suppliers in the world."
"We are also extremely proud to welcome SIMPEC and IronMerge to Pilgangoora to execute these improvement works. This joint venture is a demonstration of companies working together to support Aboriginal business enterprises to grow and create opportunities for local people," he concluded.
