https://thewest.com.au/business/mining/pilbara-minerals-busts-lithium-production-forecast-and-improves-prices-c-15458991

Pilbara Minerals busts lithium productionforecast and improves prices, as CEO desires shared infrastructure

Daniel Newell and Adrian RausoThe WestAustralian

Wed, 24 July 2024 1:36AM

Pilbara Minerals' Pilgangoora plantCredit: csfoto/Photo credit & copyright ©: 'Cs

Pilbara Minerals has smashed its full-year lithium production forecast as it celebrates a small uptick in prices for the critical battery ingredient.

The miner’s chief executive, Dale Henderson, meanwhile has lauded Federal Labor’s production tax credit scheme but stopped short of saying it will drastically improve Australia’s attractiveness for downstream processing.

Pilbara on Wednesday reported it had turned out 725,000 tonnes of spodumene concentrate over the 12 months thanks to a stellar fourth quarter that lifted production 26 per cent compared to the previous three-month period.

Full-year production from its Pilgangoora operations south of Port Hedland was up 17 per cent from 2022/23 and was well above guidance of between 660,000 and 690,000t.

The miner also recorded a 4 per cent bump in prices in the final three months of the financial year to $US840/t despite the global market remaining stuck in the mire. Realised prices across the full year were $US1176/t tonne — down a spectacular 74 per cent from a year earlier.

The price of the material that’s vital to the energy transitionhas plunged by around 80 per cent since late 2022, and some expertssee the current glut deepening through 2027. Some smaller miners —including Northern Territory play Core Lithium — have already beenforced to shutter projects as prices squeeze margins.

Mr Henderson told The West Australian that over the long-term he’santicipating the spodumene price to nearly double from currentlevels.

“There seems to be a strong consensus that a number around$US1500 (per tonne) or above is probably sort of the long runaverage,” he said.

“What we’ve been observing is supply curtailments, which sortof suggests that at these price levels it’s pretty tough for a lotof supply —that’s a positive thing given our cost position.”

Pilbara is currently weighing up building a lithium processingplant somewhere outside of China in partnership with Ganfeng.

Mr Henderson said the 10 per cent production tax credit fordownstream critical minerals projects was a “good step forward”,but indicated it did not necessarily make Australia a significantlymore attractive jurisdiction for Pilbara to build its plant.

“We will consider Australia and those tax credits will be partof the sum equation . . . but it’s not a straightforwardevaluation,” he said.

“I think there’s opportunity to do more, of course I’d saythat. The government can continue to support other things which helpdrive costs lower — shared infrastructure like Lumsden Point is agreat initiative, so more of that.

“But also things like power, Australia’s got this incrediblerenewable position potential, so leveraging strengths and thegovernment playing a role to help reduce things like power cost makesindividual businesses more competitive. We are advocates for thoseadditional steps.”

Higher production and improved prices helped Pilbara lift Junequarterly revenue 58 per cent compared to the previous quarter to$305 million.

It offered its investors hope that an improved pricing environmentwould stretch into the new financial year, saying it had completedprice reviews with two major offtake customers that would result inpricing outcomes relative to the current pricing formula. Thebenefits should start to flow through from this quarter.

Pilbara also said its P1000 project to achieve annual productionof one million tonnes of spodumene concentrate was now 60 per centcomplete. Construction remained on track and all major equipment wasalready on site and ready to install as it plots a September 2025quarter ramp-up.

The company last month put a $1.2 billion price tag on ambitiousplans to double production beyond that 1mtpa target.

A pre-feasibility study examined the potential additional of awhole-of-ore flotation plant that would take production to an averageof 1.9mtpa in the first 10 years, with more than 2mtpa over the firstsix years after ramp up.

A feasibility study has been commissioned and is expected to becompleted later next year. If the project gets the green light,production towards the 2mpta target could begin in 2028.

Pilbara finished the financial year with $1.6 billion cash in thebank.