PLS Group Limited has signed a 20-year power purchase agreement with Fortescue’s Clean Energy subsidiary to supply a committed minimum of 325 GWh per annum to its Pilgangoora operation, with supply targeted to commence in calendar year 2029. The agreement represents a significant reorientation of how PLS will power its world-class lithium mine and carries material implications for both near-term project economics and long-term operational resilience.
The core benefit centres on cost reduction. PLS management expects unit operating costs at Pilgangoora to fall by approximately $15 to $20 per tonne compared to the unit costs outlined at final investment decision for the P2000 expansion. In a commodity business where margin compression is a persistent concern, this improvement should strengthen returns on the P2000 project and provide support during lithium price downturns. The cost benefit arrives without sacrificing supply security, as Fortescue commits to a minimum annual volume under a two-decade contract structured to meet Pilgangoora’s growing power demand.
Beyond cost, the agreement streamlines PLS’s capital expenditure path. The company previously outlined an interim Stage 2 emissions-reduction pathway that would have involved on-site solar expansion and further infrastructure development. That interim step is now bypassed. PLS transitions directly to Stage 3 of its power strategy through the Fortescue connection, eliminating a layer of planned capital spend while delivering equivalent long-term emissions outcomes. Capital for the new arrangement totals approximately $150 million across three years, phased from FY27 through FY29, and management indicates it will sit within the company’s existing “Enhancing Infrastructure” guidance and add nothing to reported capex.
The infrastructure underlying the agreement reveals deliberate overbuilding. The new transmission connection is sized to exceed 100 megawatts, substantially above P2000 requirements. This capacity headroom creates options for future growth, including potential underground mining operations and fleet electrification, without requiring additional transmission investment. PLS will fund and own approximately 20 kilometres of the ~25-kilometre transmission line connecting Pilgangoora to Fortescue’s Turner River solar farm and related infrastructure.
On emissions reduction, the agreement supports PLS’s stated pathway to net zero. The company forecasts power-related emissions intensity at Pilgangoora will decline approximately 80 percent from the FY23 baseline of 0.69 tCO2-e per megawatt-hour to approximately 0.13 tCO2-e per megawatt-hour by the FY30 timeframe. The company’s estimates assume realisation of Fortescue’s projected Green Grid configuration and its associated emissions profile.
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Become an AR or CARThe agreement is subject to conditions precedent. Regulatory approvals, construction agreement finalisation, and engineering completion are required before the PPA becomes effective. The targeted 2029 supply commencement depends on successful completion of these approvals, construction activities, and commissioning. Investors should monitor progress on regulatory approvals and construction scheduling over the next two years, as delays could affect P2000 ramp-up timing and the realisation of cost assumptions outlined in the announcement. The announcement is price sensitive and flagged as material by the ASX.
View the full ASX announcement (PDF)
About PLS Group Limited (ASX: PLS)
PLS Group Limited is a global producer of lithium materials that explores, develops, and operates mineral resources with a focus on lithium extraction. The company owns and operates the Pilgangoora lithium mine in Western Australia’s Pilbara region and the Colina Project in Brazil, with spodumene concentrate primarily exported to lithium chemical converters in China. The company is also integrated into the lithium value chain through a joint venture with POSCO in South Korea for battery-grade lithium hydroxide production.
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