Pilbara Minerals (ASX:PLS) is set to significantly reduce processing costs and carbon emissions with a new three-stage energy strategy unveiled on Thursday.
Pilbara aims to achieve an 80% reduction in emissions intensity by 2030 compared to 2023, contingent on the mix of energy sources adopted in the crucial third stage.
"This initiative aligns with Pilbara Minerals’ strategic ambition to become a sustainable battery materials producer, while also driving ongoing operational cost savings," the company stated on the ASX on Thursday.
To implement the Power Strategy, Pilbara Minerals has inked two agreements, expanding on-site power generation at its Pilgangoora lithium mine and processing operation in Western Australia's Pilbara region, and facilitating the shift from diesel to natural gas.
These agreements involve replacing diesel with LNG from Woodside and installing a lithium-ion Battery Energy Storage System (BESS). This transformation will convert the Pikgan power station at the mine from diesel/solar to gas/diesel with a battery.
"These agreements mark the initial step in supporting Stage 1 of the Company’s Power Strategy to reduce emissions intensity and costs, set to be operational in the second half of FY25," Pilbara stated.
Stage 1 will build upon the savings generated by the 6-megawatt solar array that came online in 2022 at the mine. After Stage 1 transitions thermal generation from predominantly diesel to natural gas and BESS, Pilbara’s second stage aims to boost existing solar generation on-site, while Stage 3 plans to add emerging wind power generation if it becomes available through grid connection by 2030.
The company anticipates emissions intensity reductions of approximately 20% following the completion of Stage 1, around 48% following Stage 2, and potentially up to 80% upon the completion of Stage 3 if deployed, all relative to FY23.
Pilbara revealed that the first two stages are expected to deliver substantial reductions in power unit costs for the Pilgangoora Operation. However, the cost profile of Stage 3, including potential savings, depends on the development and availability of emerging regional wind solutions and infrastructure for Pilgangoora Operations in the future.
"The Power Strategy supports Pilbara Minerals' commitment to achieving net-zero scope 1 and scope 2 emissions in the decade commencing 2040 and positions the Company for a sustainable, cost-effective future," Pilbara concluded in the statement.
