Pilbara Minerals trims for lithium

Pilbara Minerals says it will push ahead with plans to expand its Pilgangoora lithium project to a million tonne a year export rate, banking on cutting its average production costs to maintain a profit margin, despite crumbling lithium prices almost halving the company’s revenue in the December quarter.

The company released its December quarter production report on Wednesday, saying it had booked $265m in revenue in the quarter, down from $493m in the September period, with slightly higher export volumes partially offsetting a halving of the price it received for its lithium concentrate.

Pilbara Minerals exported almost 160,000 tonnes of lithium concentrate in the quarter and said it was paid an average $US1,113 a dry metric tonne for concentrate grading an average 5.2 per cent lithium. That is the equivalent to $US1280 a tonne for concentrate grading 6 per cent lithium.

It was badly hit by delays getting its concentrate out from Port Hedland, but said the bulk of its exports took place in December, as the lithium price rout was in full swing.

The company said it was currently seeing pricing of $US800 to $US900 in the market, and about 73,000 tonnes of its December exports were still subject to provisional pricing.

Pilbara Minerals warned on Wednesday the company was unlikely to pay an interim dividend when delivering its halfyear financial results in February, preferring to hold on to cash to ride out the lithium price crash.

Pilbara Minerals said it would push on with its project to lift production at Pilgangoora to 1 million tonnes a year, which builds on a current expansion targeting around 680,000 tonnes a year.

Pilbara Minerals said it still expected first ore from its P1000 project by March 2025.

But the company said it will be cutting aspects of its capital spending program and now planned to spend $820m to $875 on capital projects, from $875m to $975m on capital projects – a cut of up to $100m.

Shares in the company were up 6.5 per cent at $3.48 in a soft market at lunchtime.