Australia’s Pilbara Mining sees continuing Li demand

Australian mining firm Pilbara Minerals' sees continuing lithium demand from its customers, while the firm continues to focus on cost optimisation.

Pilbara in March accepted a pre-auction offer of $1,106/dry metric tonne (dmt) for 5,000dmt of 5.5pc-grade lithium concentrate (spodumene) cif China. The price equates to approximately $1,200/dmt 6pc-grade lithium concentrate (spodumene) cif China, said Pilbara, which reflects the "ongoing demand and positive pricing for unallocated production volume".

"When you look at the past 60 days up to mid-April, the increases [in lithium prices] are fairly material," said the firm's managing director and chief executive Dale Henderson during the latest quarterly earnings call, adding that the recent uptick in lithium pricing is "comforting".

Argus-assessed prices for 6pc-grade lithium concentrate (spodumene) held stable at $1,100-1,200/t cif China on 16 April from a week earlier, rebounding from an all-time low of $850-1,050/t on 27 February. But a standoff has more recently formed between spodumene producers and lithium refineries, with the former maintaining their offer prices and consumers rejecting them.

Pilbara's spodumene realised price in January-March fell by 28pc on the quarter to $804/dry metric tonnes (dmt) cif China, despite the average grade of spodumene shipments rising by 0.1 percentage point to 5.3pc, which translates to $927/dmt for 6pc-grade lithium concentrate (spodumene). But the realised price during the quarter remained above its unit operating cost of $519/dmt cif China, which fell by 1pc on the quarter. Pilbara's ending cash balance came in at A$1.8bn ($1.15bn) as at 31 March, down from A$2.1bn a quarter earlier.

Output

Pilbara's output during January-March rose by 2pc on the quarter and by 21pc on the year to 179,000dmt. The output was propped up by a record monthly production of over 80,000dmt in March, partly because the P680 primary rejection facility reaching its nameplate production capacity in the second half of the quarter. But its chief operating officer Vince De Carolis said the peak performance should not be construed as an annualised run rate.

The firm said it is not stockpiling its production volume as it sees "ongoing customer demand". Pilbara's spodumene sales volumes rose by 3pc on the quarter and by 14pc on the year to 165,121dmt for an average 5.3pc grade.

Pilbara earlier in February defended its lithium downstream strategy and last month signed a binding agreement with Chinese refiner Ganfeng to carry out a joint feasibility study as they explore building a downstream conversion plant.

The two firms are exploring building a lithium hydroxide and/or lithium carbonate conversion plant with 32,000 t/yr of lithium carbonate equivalent capacity, alongside a potential intermediate lithium chemical facility in the country.

By Joseph Ho