Pilbara sees marginal lithium price improvement
Australia’s biggest pure-play lithium miner, Pilbara Minerals, has reported a modest increase in lithium prices for the December quarter. However, CEO Dale Henderson cautions that it is too early to determine whether the market is undergoing a meaningful correction.
The company reported a 3% quarter-on-quarter increase in average realised prices to $700/t in the three months to December 31.
Speaking on a conference call with analysts on Wednesday, Henderson noted that while the price uptick from the previous quarter was encouraging, the company remained vigilant.
“It is great that we’ve seen a small price increase in the December quarter. However, it is a small increase and we are not long into it. Fundamentally, there is a level of uncertainty in the market, so it is too early to take any view of market correction,” he stated.
During the December quarter, Pilbara produced 188 000 t – a decrease of 14% from the prior quarter, reflecting the transition to its P850 model. Unit operating costs increased by 2% to A$621/t, owing to lower sales volumes of 204 000 t and ramp-up costs.
Revenue increased by 3% to A$216-million, reflecting higher prices.
Pilbara implemented its P850 operating model, which is expected to generate a cash flow improvement of about A$200-million in the 2025 financial year. As part of this initiative, the Ngungaju processing plant was placed into care and maintenance, a transition that Henderson said was executed smoothly.
Further Pilbara said its expansion projects continued to progress as planned. The P1000 project, designed to boost production capacity, was on schedule and within budget, with wet commissioning currently under way.
The P2000 feasibility study remained on track, with results expected by the end of the year.
BRINE COMPETITION
Meanwhile, with investment continuing to flow into lower-cost South American brine lithium projects, analysts questioned Pilbara’s ability to remain competitive in a potentially lower-price environment. Henderson said the company remained confident in its hard rock spodumene strategy, stressing that high-quality assets – both brine and hard rock – were crucial for long-term success.
“We have always taken the view that the left-hand side of the cost curve sits the best assets, which include both the best brine and best hard rock projects,” he said. “With our asset and processing capability, we’re comfortable with where we are heading.”
Henderson also highlighted that producing low-cost brine lithium was not without its challenges, suggesting that the cost curve for new brine projects still had room to evolve.
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