- Expected reduction in unit operating costs (FOB) of approximately $15–20/t
- 20-year PPA with Fortescue provides minimum of 325 GWh per annum of electricity
- Pilgangoora’s power-related emissions intensity expected to decrease
- New transmission connection with capacity exceeding 100 MW
PLS Group (ASX: PLS) has executed a 20 year power purchase agreement (PPA) with Fortescue for the supply of a minimum of 325 GWh per annum of electricity to the Pilgangoora lithium operation in WA.
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MD and CEO, Dale Henderson, said the deal supports Pilgangoora’s growing forecast power demand under the P2000 operating model and underpins the company’s power strategy, delivering a materially lower cost of power, enhanced long-term energy security, capacity for future growth and a substantially higher share of renewable energy in the Pilgangoora power mix.
“We are pleased to partner with Fortescue and become their first external Green Grid customer. We commend Fortescue’s leadership in bringing its vision for large-scale, lower-emissions power infrastructure across the Pilbara to life, and strongly support the opportunity for shared infrastructure to benefit industry across the region,” Mr Henderson said.
“This agreement further strengthens our low-cost position at Pilgangoora, improving our competitiveness and resilience through lithium market cycles. Access to lower-cost, lower-emissions power will deliver further improvements to the economics of our recently approved P2000 Project expansion, beyond those announced at FID, while providing capacity to support future growth.”
The PPA will connect Pilgangoora to Fortescue’s Turner River solar farm and 220kV substation via a new 25km, 220kV transmission line. PLS will fund and own 20km of this line, which follows the existing mine access road to a new 220/33kV receiving substation at Pilgangoora.
On-site powerlines will be upgraded to 33kV to distribute power to all key Pilgangoora facilities. The connection is sized above 100 MW, well beyond P2000 requirements, positioning Pilgangoora to accommodate future growth optionality including potential underground mining and fleet electrification without further transmission investment.
The processing plant and other power needs will be provided by a mix of the Fortescue Green Grid, and Pilgangoora’s existing power generation (a combination of LNG-fuelled gas engines, solar and diesel across the Pilgan and Ngungaju power stations) and battery energy storage systems (BESS).
Mr Henderson said the agreement is expected to strengthen Pilgangoora’s ability to remain competitive through lithium market cycles, consistent with PLS’ focus on operating efficiency and disciplined capital investment.
PLS was up 6.42% to 4.8¢. Mkt cap of $39.82M.
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