Pilbara Minerals drops the hammer onlithium
A rebound in lithium prices hasn’tbeen enough to save Pilbara Minerals from reporting another full-year loss, butthe company remains bullish about future demand from car and battery makers.
PilbaraMinerals recorded a $51.4 million loss, but it marked a big improvement on lastyear when it finished $99.3 million in the red.
The company more than doubled spodumene concentrateexports from its operations in Western Australia to 281,440 tonnes and noted abig jump in customer demand in the second half of 2020-21.
Theincrease in shipments and price recovery took revenue to $175.82 million, upfrom $84.14 million last year.
PilbaraMinerals grabbed the attention of the lithium world in late July when it sold a single cargo at auction for$US1250 per tonne, with the number of bidders indicating the many more customers in the market than during the last lithium boom in 2017.
Managingdirector Ken Brinsden said the company had emerged “stronger than ever” fromthe downturn that ultimately led to its acquisition of lithium mining neighbourAltura and other industry consolidation.
What an incredible turnaround wehave seen during the second half,” he said.
“Globaldemand growth for lithium raw materials has now really kicked in, and it isresulting in substantial increases in the price received for our products.”
Pilbara Minerals, which slashed productionduring the downturn, is looking to produce spodumene concentrate at550,000-580,000 tonnes a year by June 2022.
“Wenow own two processing plants and have the ability to rapidly ramp upproduction from the second plant into a market that is low in spodumeneconcentrate supply,” Mr Brinsden said.
“Importantly,production from this second plant (the plant acquired in Altura transaction) iscompletely uncommitted.”
PilbaraMinerals has existing off-take agreements but will look to sell additionalvolumes through newly established BMX auction platform.
“Byutilising the BMX platform, we will have an additional sales channel to helprealise more of the available margin available between the value of spodumeneconcentrate and lithium hydroxide in this buoyant market,” Mr Brinsden said.
Macquarieanalysts expect spodumene prices to average $US1283 per tonne in the 2022calendar year and be above $US1000 in 2023 and 2024.
Inan indicator of the strength of the price rebound, spodumene concentrate soldfrom Orocobre’s Mt Cattlin mine in WA was fetching $US480 per tonne in January,but contracts for the same product were struck at $US800 per tonne in June andmore than $US1000 per tonne in July.
USbattery metals giant Albemarle, which owns the Wodgina lithium mine in WA inpartnership with Chris Ellison’s Mineral Resources, has said the higherspodumene prices won’t tempt it to re-start operations.
Albemarleintends to keep Wodgina, close to the Pilbara Minerals operations in WA’sPilbara, in care and maintenance until it secures downstream processingcapacity in China.
(20min delay)