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Macquarie lifts lithium forecasts, Pilbara Mins preferred pick

Tom Richardson

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Macquarie has assessed the lithium mania and named Mineral Resources and Pilbara Minerals as its preferred lithium picks as the transition to electric vehicles accelerates.

The broker has an outperform rating and $83 price target on Mineral Resources. “The accelerated restart of Wodgina train 1&2 was ahead of our prior estimates. A combination of capital investment and product mix change increase Mt Marion production capacity to 900ktpa,” the broker said. “Higher spodumene production from Mt Marion has translated to double-digit upgrades to our medium-term earnings forecasts for MIN.”

Macquarie has a $4.30 price target on Pilbara Minerals and outperform rating. It also rates Allkem, Liontown, and Lynas as outperforms on the basis of rising demand for the raw materials for batteries.

On Argentina-based lithium brine miner Allkem, Macquarie said. “AKE recently lifted the Olaroz resource by 2.5x to 16.2mt, highlighting upside beyond stage 1 and 2 which produces a mere 1.5mt over the 40-year life. Sal de Vida stage 1 and stage 2 expected volumes were lifted to 15.0ktpa and 30.0ktpa, respectively, well above our prior forecasts. AKE’s production is expected to increase 125% from 50kt LCE in FY21 to over 120kt beyond FY26, leveraging the buoyant lithium pricing market.”