Pilbara Minerals has reported that production optimisation continues at the Pilgangoora Lithium-Tantalum Project, with record production of 22,375 dry metric tonnes of spodumene concentrate achieved during the month of May, representing ~85 per cent of planned Stage 1 plant capacity.
Plant throughput and utilisation have been in line with expectations, resulting in consistent production growth month-on-month in the year to date. Product recovery rates have been largely in line with previous results and the Company remains on target to achieve design lithia recovery (of approximately 75%) by the end of the calendar year following completion of plant improvement works and optimisations have been progressed.
While underlying demand for battery-ready lithium chemicals remains strong, delays in the construction, commissioning and build-out of the Company’s offtake customer chemical conversion capacity in China has resulted in June quarter sales of spodumene concentrate being constrained.
Consistent with the current trading conditions for lithium raw materials in China, spodumene concentrate pricing has also continued to soften and is currently in a range of approximately USD$600-640/dmt CFR China.
“Pilbara Minerals is responding proactively to this market dynamic by working with its offtake customers to accommodate their revised ramp-up timelines plus arranging sales to other strategic customers,” said the Company in a release.
The Company expects its offtake partners will be able to comply with their full offtake commitments once they are sufficiently advanced in the ramp-up of their respective chemical conversion capacity. Further, the Company has and will continue to engage with its other partners and additional industry participants with a view to growing its sales portfolio in the near term.
“In response, production at Pilgangoora will be moderated during June and July with the Company utilising this opportunity to undertake continued rectification of RCR defects, complete further plant improvement works, and draw-down final product stocks.”
Pilbara Minerals believes this decision to moderate production in the short-term is prudent in order to responsibly manage cash flows and working capital, whilst the additional conversion capacity of Ganfeng, General Lithium and other industry participants come online.
Pilbara Minerals’ Managing Director and CEO, Ken Brinsden, agreed that it was no secret that the spodumene supply market was experiencing some short-term challenges as the big players, including Pilbara Minerals’ cornerstone customers, worked to commission and ramp-up their chemical conversion plants in China.
“As a business, we have decided to proactively respond to this by working with our long-term partners to assist them where possible during this period.
“We remain confident that the underlying fundamentals of the lithium market remain strong – as evidenced by the growing number of agreements being made by major car manufacturers further down the supply chain in both Chinese and global markets, to shore up lithium supply to meet their long-term EV production and energy storage market targets,” said Mr Brinsden.
Pilbara Minerals and POSCO have also continued to progress due diligence and negotiations for the proposed joint venture chemical conversion plant in South Korea during the June quarter.
Pilbara Mineral’s due diligence is now complete on the proposed 40kt LCE facility in Gwanyang, South Korea. The final joint venture and technology licencing terms are now close to being finalised, with a target to complete both the detailed joint venture shareholders agreement and POSLX licencing agreement by the end of June. A final investment decision and board approvals by both parties are expected during the September quarter.