In a mark of the soaring lithium market, Pilbara Minerals shifted lower and higher-grade variations of its spodumene concentrate product during the September quarter to satiate demand.
The company sold 45,041 dry metric tonnes (dmt) of a “middlings” product (1.2 per cent lithia), which was produced during commissioning of the Ngungaju plant at Pilbara’s Pilgangoora operation.
In response to rising customer demand and strong prices for lithium raw materials, Pilbara Minerals also lowered its targeted product grade to optimise product yield. The average grade of product sold during the September quarter was approximately 5.3 per cent lithia (compared to 5.4 per cent lithia in the June quarter).
Pilbara Minerals boosted its output by 20dmt quarter-on-quarter, producing 147,105dmt of spodumene concentrate in the three months to September 30.
The company was benefited by Ngungaju, which achieved nameplate capacity of 180–200,000 tonnes per annum (tpa) in the quarter. Pilbara has been ramping up Ngungaju since it produced first concentrate in October 2021.
Pilbara Minerals’ 5.3 per cent lithia product was shifted at $US4266/dmt, which equates to a price of $US4813/dmt on a 6 per cent lithia basis (CIF* China), which is the industry-accepted price. That was a 13 per cent increase on the June quarter ($US4267/dmt).
If Pilbara produces a product below 6 per cent graded lithia, the actual price is adjusted pro-rata to the 6 per cent reference price.
The boosted production and increased sales price enabled the lithium miner to add $783.7 million to its cash balance, which stood at $1.375 billion at the end of the quarter.
Pilbara Minerals made a final investment decision (FID) in late June to increase Pilgangoora’s production capacity from 580,000 to 680,000tpa of spodumene concentrate (P680 project).
P680 requires the construction of a primary rejection-heavy media separation circuit and an integrated crushing and ore-sorting facility. Pilbara commenced P680 in the September quarter, with bulk earthworks underway and contracts for long-lead items awarded.
Another FID planned in 2022 aims to add a further 100,000tpa of capacity, bringing the project to a 780,000tpa production profile.
The ultimate goal is to boost Pilgangoora’s production capacity to 1 million tonnes per annum (P1000).
*CIF represents ‘cost, insurance and freight’.