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Pilbara Minerals delivers first profit, CEO steps down

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Pilbara Minerals has reported its first half-year profit as the sky-high lithium demand continues to drive up prices.

The ASX 200 miner delivered an interim profit after tax of $114 million for the second half of 2021, along with a record sales revenue of $291.7 million for the half-year.

Located within Pilbara Minerals’ Pilgangoora operation in Western Australia, the Pilgan plant was the star of the show, returning a gross operating margin of $172.1 million, a $158.9 million increase from the second half of 2020.

The miner shipped 170,228 dry metric tonnes (dmt) of spodumene concentrate across the six months and achieved an average selling price of $US1250/dmt ($1729/dmt).

The lithium supply squeeze has continued to intensify to start 2022 which is driving spot spodumene prices into the range of $US3750-4500/dmt territory, the company said.

Pilbara Minerals chief executive officer Ken Brinsden said one key contributing factor led to the company’s strong performance.

“Our financial performance for the period is a direct reflection of the incredible turnaround which has been experienced in the lithium raw materials supply chain over the past year or so,” he said.

“The combination of strong underlying demand growth and Pilbara Minerals’ ability to create a transparent spot price outcome via the Battery Material Exchange has driven very strong increases in prices for our product.”

Pilbara Minerals has not been immune to adversities. The company has been working towards the integration of the new Ngungaju plant at Pilgangoora, while the company cited labour issues and cost inflation as other difficulties.

Pilgangoora’s Pilgan plant also operated at an average runtime of 76 per cent for the December quarter of 2021, below the targeted 84 per cent, as it experienced unplanned equipment breakdowns and further shutdowns as part of planned plant refurbishments.

Despite the challenges, the outgoing Brinsden is buoyed by what the future holds.

“The outlook for Pilbara Minerals in the second half of FY2022 and beyond remains extremely bright,” he said.

“The current momentum in lithium markets continues to demonstrate higher price outcomes and we are very well placed to participate in this as production and sales volumes from the combined Pilgangoora operation continue to increase.”

Coinciding with Pilbara Minerals’ half-year results, the company announced Brinsden would be stepping down as CEO by the end of 2022 after approximately seven years at the helm.

The lithium miner said it had commenced the search process for the next CEO.

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