Pilbara Minerals looks for deals after record lithium output
Pilbara Minerals Ltd., one of the world’s top lithium miners, said it is on the hunt for acquisitions after producing a record quantity of the battery metal in the June quarter.
The company had “started to run the ruler” over potential acquisitions and was “in pretty good stead” to fund deals both from its balance sheet and through capital raising, said managing director Dale Henderson, according to a Bloomberg News report.
“There is opportunity for consolidation” in the sector, which is dominated by small and mid-sized producers, Henderson said. More mergers and acquisitions among the dominant mid-sized players — such as the proposed deal between Allkem Ltd. and Livent Corp. — were “more probable than not.”
The Perth-based company’s preference was for hard-rock rather than brine projects in stable jurisdictions like Australia, he said, adding Pilbara Minerals hadn’t itself been the subject of any takeover offers.
Lithium is one of the key metals used in electric-vehicle batteries, and demand has soared as carmakers rush to switch from gasoline- to battery-powered car production. Few of the big, diversified miners are involved in the rapidly growing lithium sector, leaving it to smaller companies like Pilbara Minerals — which has a market capitalization of A$14.5 billion ($9.8 billion) — to boost supply.
Lithium rose to records last year, but this year prices have softened. Pilbara Minerals recently reported average prices for its spodumene concentrate — the lithium-bearing product it produces in Western Australia — fell 33 percent in the three months to June 30 to A$3,256 per ton. That was worse than the market expected, Henderson said.
Still, Pilbara Minerals’ spodumene production rose 10 percent from the previous quarter to 163,000 tons, and it said it is on track to almost double annual production by 2025.
Image description: Pilbara Minerals 2 million tonne per annum (Mtpa) mining and processing operation produces ~360,000 to 380,000 tpa of spodumene concentrate. The Pilgan Plant also produces a tantalite concentrate as a by-product of this process. The processing facility consists of a heavy/dense media separation (DMS) circuit to produce a coarse concentrate and a flotation and gravity circuit to produce fines concentrate. Both the fines and coarse concentrate are blended to deliver a high quality, spodumene concentrate product to customers.
Work is underway to expand production by 100,000 dmt per annum at the Pilgan Plant (P680 Project). Once complete, this will increase the Pilgangoora Project’s combined annual nameplate production capacity to ~640,000 – 680,000 tpa of spodumene concentrate.
This expansion includes the construction of a primary rejection heavy media separation circuit and an integrated crushing and ore sorting facility capable of processing up to 5 Mtpa of ore throughput. Importantly, the crushing and ore sorting facility will support the proposed future expansion to up to 1 Mtpa of spodumene concentrate production (P1000 Project). A final investment decision on the P1000 project was made in March 2023 to proceed with the expansion.
Image courtesy of Pilbara Minerals