Good News & Bad News, page-544

Mining
Ryan Long

19:23 Thu 22 Apr 2021
viewPilbara Minerals Ltd
Lithium - 2020 a year to forget but 2021 panning out to be a year to remember
Proactive's mining maven, Ryan Long, runs his eye over the lithium miners' progress in the first quarter of 2021
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2020 was a real struggle for lithium miners and chemical producers despite a strong start to the year in the first quarter. Lower prices in the second quarter (Q220) and Q320 made it difficult for some producers to survive the year and one didn’t!
Altura Mining Limited didn’t manage to see the year out, as lower spodumene concentrate prices meant the company couldn’t meet its debt repayments and it went into receivership in late October 2020, despite raising A$11.2mln in equity just six months earlier.
At the time it went under Altura had over A$190mln of debt on its balance sheet, which it had used to contribute to constructing the Pilgangoora Lithium operation, which has a nameplate capacity of 193 dry metric tons per hour (DMT/hr).
But one company’s loss is another company’s gain and Altura’s longstanding Western Australian spodumene producing rival, Pilbara Minerals Ltd (ASXLS), acquired Altura’s Pilgangoora Lithium Project, for just US$175mln, which could prove to be a great deal for Pilbara in the mid-term as Altura invested over A$290mln (US$221mln) to build the lithium mine just a few years earlier.
Through the Altura acquisition, Pilbara now has a controlling position in Western Australia. Both mines operate on different parts of the same orebody and the combination of the two projects gives Pilbara a total resource base of c. 276.5 million tonnes at a grade of around 1.2% Li2O, making it the second-largest spodumene deposit globally.
But despite a difficult year SC6.0 spodumene concentrate prices ended 2020 in the range of US$400-430/tonne, with improved spodumene concentrate demand following a material uplift in lithium chemicals pricing within China towards the end of December 2020 and into early 2021. China domestic battery-grade lithium (Li) carbonate pricing is up 120% in April 2021 from its lows in July-October 2020 (Figure 1) and battery-grade lithium hydroxide up 100% since its January 2021 lows.
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Figure 1: Lithium Pricing

Source: https://www.fastmarkets.com/commodities/industrial-minerals/lithium-price-spotlight​

Stronger energy vehicle sales are being forecast in both the EU and China during 2021, driving demand for both lithium carbonate and hydroxide, which should increase prices for lithium chemicals and spodumene concentrates over the course of the year.