Australian lithium producer Pilbara Minerals is set to invest around A$297.5m ($205.51m) to enhance the production capacity of its Pilgangoora operation, located in Western Australia.

The investment is part of the company’s Final Investment Decision (FID).

With the investment, Pilbara Minerals aims to increase the project’s production capacity from 580,000 tonnes per annum (tpa) to 680,000tpa of spodumene concentrate (P680 Project).

The company will build a primary rejection heavy media separation circuit (Primary Rejection).

It is expected to enable rejection of low-grade waste material and provide an additional 100,000tpa spodumene concentrate production capacity at an estimated cost of A$103m.

Through the new Primary Rejection circuit, P680 Project is expected to touch higher production volumes at reduced unit operating costs, using existing infrastructure.

Pilbara Minerals incoming managing director and CEO Dale Henderson said: “Following the Board’s Final Investment Decision, we are now able to commence construction of the P680 Project in the coming months and expect commissioning of the primary rejection facility during the second half of next year with the crushing and ore sorting facility to follow shortly thereafter.

“This increase in production capacity will enable the Company to continue to capitalise on the opportunities in the lithium chemicals market, being driven by rapid transition to decarbonisation through technologies such as electric vehicles and battery storage.

“The increase in production from the Pilgangoora Project will coincide with the expected commissioning and ramp-up in production from the downstream chemical conversion plant being constructed under our Joint Venture with POSCO, which will see Pilbara Minerals become a fully integrated lithium raw materials company.”

The P680 Project includes the installation of an additional Heavy Media Separation (HMS) circuit, adjacent to the plant’s existing HMS circuit.

In addition, it includes new ore sorting technology, which is designed to reject basalt and other non-lithium hosting materials earlier in the production process.

Pilbara Minerals intends to self-manage the P680 Project to better control the cost and schedules, with plans to complete the procurement prior to awarding construction contracts.

The investment in P680 Project also includes around A$50m of pre-investment capital to support the next phase of expansion that targets achieving up to 1Mtpa production (P1000 Project).

The P1000 Project is subject to a separate final investment decision (FID) and includes the construction of integrated crushing and ore sorting facility.

The FID for the P1000 Project is expected in late December this year.