Solid@PilbaraMinerals management through difficult market conditions. The strong survive and will thrive again in 2025 & beyond.
so says lithium hodler Joe Lowry
Howard Klein uses the word 'discipline'.
Lithium hodlers the best positive spinning stale bulls there are in the market.
Only demonstrates how deeply involved they were. The deeper they got involved, i.e the more vested their interests are, the louder they must to re-ignite exuberance.
Their undying faith in lithium blinds them away from a view that lithium prices can and will remain lower for longer to favour EV's growth predicated on achieving price parity with ICE vehicles.
EVs gain is lithium's loss.
As I've stated before, the only way out for lithium producers is to produce more albeit at lower margins, but unfortunately PLS can't even do that for next year. It is not that they are practising discipline to lower supply, they had to lower output based on optimisation. It is about lowering costs.
Lithium hodlers would need to settle for a protracted winter hibernation, all while stock markets are making new highs.
As I mentioned previously, they would have been better being in the precious metals space, and come back and revisit lithium again perhaps in 18 months. Pilbara Minerals cuts lithium output, suspends plant Elouise FowlerReporter
Oct 30, 2024 – 12.07pm
Pilbara Minerals is sandbagging operations to weather the lithium price rout by cutting annual lithium production and suspending its Ngungaju processing plant.
Australia’s largest pure-play lithium miner said it will mothball its Ngungaju processing plant at its Pilgangoora lithium mine site in Western Australia from December 1.
Pilbara’s decision to cut output from its flagship mine and put the Ngungaju facility on ice was triggered by the supply glut that continues to drag down lithium prices.
Lithium prices have collapsed almost 20 per cent over the quarter. AFR
Pilbara fetched $US682 ($1039) per tonne for its lithium-rich spodumene concentrate in the September quarter, a 19 per cent dip from the $US840 a tonne it received in the prior quarter. This, along with lower sales, dragged down revenue by 31 per cent to $210 million over the quarter.
The price rout over the year has torn through the lithium sector. New York-listed Albemarle, the world’s largest lithium producer, has shed 300 jobs as part of a radical downsizing of its Kemerton lithium hydroxide refinery in WA. Related Quotes PLSPilbara Minerals
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Rio Tinto’s $9.9 billion takeover target, Arcadium Lithium, has wound up its Mt Cattlin lithium mine; Mineral Resources has reduced output at its Mt Marion mine; and junior miner Core Lithium has suspended mining at its Northern Territory-based Finniss project.
Pilbara chief executive Dale Henderson said the Ngungaju plant was put on ice in response to current lithium market conditions, near-term outlook and the ramp-up of its newly expanded processing facility, the Pilgan plant, at the Pilgangoora mine.
But he expects the Ngungaju plant – which operates at a higher cost and lower capacity than the Pilgan plant – to come back online in four months, once it was clear the lithium price had recovered.
The lithium price needs further market rebalancing, through either increased demand or supply curtailments, to catalyse a near-term price improvement, he said.
“The Ngungaju plant will remain in care and maintenance, ready to be fully ramped up in approximately four months when market conditions improve, allowing the company to quickly capitalise and capture value in a rising price environment,” Mr Henderson said on Wednesday.
According to CRU Group, a London-based mining consultancy, supply has far outpaced demand over the year. Supply is up almost 30 per cent compared to the same point last year, while demand is just 20 per cent.
“That’s not weak demand growth by any stretch of the imagination, but EV sales have been weaker than expected outside of China due to affordability and miners have continued to chase dwindling profits to pay back their investments,” said Martin Jackson, the lead lithium analyst at CRU.
“In absolute terms, China and Zimbabwe have brought 2½ times more additional annual supply on in 2024 than Australia and Chile combined.”
Over the 2025 financial year, Pilbara now expects to produce less spodumene – between 700,000 and 740,000 tonnes – compared to previous guidance of 800,000 to 840,000 tonnes.
Unit operating costs are expected to be between $620 to $640 a tonne, down from $650 to $700 a tonne, reflecting lower costs at the Pilgan plant, which was recently expanded and ramped up.
Capital expenditure will also be lower – between $565 million and $610 million, compared to previous guidance of $615 million to $685 million.
Over the quarter, unit costs were 2.5 per cent higher at $606 per tonne, and production was 2.7 per cent lower at 220,100 per tonne.
Spodumene concentrate sales were 9 per cent lower at 214,500 tonnes over the quarter.
Pilbara’s share price lifted 5 per cent to $3 in midday trade. The stock is down 25 per cent since the start of the year.
