PLS Group Ltd. has signed a 20-year power purchase agreement (PPA) with Fortescue’s subsidiary, FMG Clean Energy, securing a clean electricity supply for its Pilgangoora lithium operation in Western Australia’s Pilbara region.
Under the agreement, Fortescue will supply a committed minimum of 325 gigawatt-hours per annum of electricity to support Pilgangoora’s expanding power needs under its P2000 operating model, with supply targeted to commence in calendar year 2029.
The deal establishes PLS as the inaugural external customer for Fortescue’s regional ‘Green Grid’ network.
By tapping into Fortescue’s Turner River solar farm and substation via a new 25-kilometre transmission connection, PLS expects to drive down unit operating costs by approximately $15 to $20 per tonne.
This operational saving will significantly enhance Pilgangoora’s long-term cost competitiveness through volatile lithium market cycles.
PLS will invest roughly AU$150 million between fiscal 2027 and fiscal 2029 to construct and own the transmission link and upgrade on-site infrastructure.
The new 100-plus megawatt line provides ample capacity beyond P2000 requirements, allowing for future growth opportunities such as underground mining and fleet electrification.
PLS CEO Dale Henderson, praised Fortescue’s leadership in developing shared regional infrastructure.
“This agreement further strengthens our low-cost position at Pilgangoora, improving our competitiveness and resilience through lithium market cycles,” he added.
“Access to lower-cost, lower-emissions power will deliver further improvements to the economics of our recently approved P2000 Project expansion.”
Fortescue CEO Dino Otranto said the agreement cements Fortescue’s emerging role as a commercial energy supplier while opening a long-term revenue stream for the company.
“We started building the Green Grid for our own operations, but we could see strong demand for cheap, green, reliable power across the Pilbara and an opportunity to supply other customers too,” Otranto said.
The agreement also delivers a major environmental boost, advancing PLS’s updated power approach.
By integrating grid renewables alongside its existing gas and battery storage assets, PLS expects to slash its site power-related emissions intensity by up to 80 per cent from FY23 baseline levels, keeping the company firmly on track for its target of net zero Scope 1 and 2 emissions by 2040.