Lithium revival energises Pilbara Minerals

Pilbara Minerals

Pilbara Minerals’ Pilgangoora lithium-tantalum operation in Western Australia.

Emerging from the lithium crunch of recent years, Pilbara Minerals has the infrastructure and ambitions to become a global leader in the marketplace.

Australian lithium miner Pilbara Minerals has been one of the success stories of the global mining industry in 2021, with its share price ballooning over the past 12 months.

As the motorised world continues its transition away from fuel and towards electrification, and big electric vehicle (EV) players such as Tesla and Renault keep expanding their capabilities, lithium is increasingly becoming a more sought-after resource.

Pilbara Minerals is represented by its Pilgangoora lithium-tantalum operation, 120 kilometres from Port Hedland in Western Australia.

While the company’s acquisition of the neighbouring Altura Mining in January 2021, which included the addition of the Ngungaju processing plant, created fanfare, it was the work Pilbara Minerals was doing years before that solidified its foundations.

“I’m really proud of what the team has achieved, not necessarily because of the last 12 months, actually the bit that was formative was the two years before that,” Pilbara Minerals chief executive officer Ken Brinsden tells Australian Mining.

“It was a really tough time in the industry and in fact, a couple of our peers went broke – that’s an indication of how difficult the conditions were in spodumene concentrate.”

Altura Mining went into voluntary administration in October 2020, after attempts to refinance more than $250 million of debt failed, while Alita Resources folded in 2019 following troubles at its Bald Hill lithium-tantalum mine in Western Australia.

Pilbara Minerals witnessed the lithium slide firsthand, but the company never lost hope.

“The (Pilbara Minerals) team stuck together, everybody worked really hard to improve our plant performance, to minimise our cash spend, and that hard work has translated now to really good operating performance,” Brinsden says.

“That’s meant that now that market conditions have improved, we’ve been able to ramp up our activity, maintain a low-cost base, but also now of course, start to enjoy healthy margins.”

Pilbara Minerals expects to increase production in 2022.

Since acquiring Altura, Pilbara Minerals has steadily worked towards restarting the Ngungaju plant, which, combined with its existing Pilgan plant, will significantly uplift the company’s production potential.

“We took the risk in a terrible time in the market buying the asset (Ngungaju) out of receivership. We’ve been working on the plant, we’ve been bringing it back to a reasonable operating state and we’re now going through the process of ramping up its capacity,” Brinsden says.

“In total, that will take us about nine months, so through to about June next year, and in that period of time, we should have realised an additional 200,000 tonnes of spodumene concentrate capacity from the Ngungaju plant.”

Pilbara Minerals is also working on improvements at Pilgan, which will see the plant go from producing approximately 330,000 dry metric tonnes per annum (dmtpa) to 380,000dmtpa of spodumene concentrate, resulting in a company total of 580,000dmtpa by the middle of 2022.

Other 2021 developments included the launch of Pilbara Minerals’ spot market sales platform, the Battery Material Exchange, while the company also executed a significant partnership with Contract Power to build a six-megawatt solar farm at Pilgangoora.

In late October, Pilbara Minerals finalised a joint venture agreement with steelmaker POSCO, paving the way for the development of a downstream lithium hydroxide chemical processing facility in South Korea.

Under amended offtake terms, Pilbara Minerals will provide 315,000 tonnes per annum of chemical grade spodumene concentrate when the plant is up and running by the second half of 2023.

With Pilgangoora’s significant potential, Pilbara Minerals is content with maximising its immediate capabilities before it starts contemplating another expansion through mergers and acquisitions (M&As).

“There’s nothing burning a hole in our pocket. We have so much organic growth ahead of us at Pilgangoora – such a massive resource, massive reserve – there’s so much that can be done there,” Brinsden says.

This, however, doesn’t mean Pilbara Minerals isn’t keeping a close eye on global developments.

“So, all we do, is we watch with interest – what’s happening around the world. A couple of key themes are well worth paying attention to,” Brinsden continues.

“One of which is that the localisation of some supply chains is going to become very important, so I can see logic and merit in a North American or even an American supply chain spanning South America as well, supporting the growth of battery-making capacity there.

“Similarly in Europe, albeit Europe’s a little bit more challenged because they don’t have quite as much raw material, but anyway, the idea that the raw material is closer to the battery, I think is an important theme.”

As the appetite for battery metals grows and Pilbara Minerals eyes full operating capacity at Pilgangoora, there’s enough to suggest the company’s stock will continue to increase into 2022 and beyond.

Needless to say, every Pilbara Minerals development will be observed with vested interest in Australia and beyond going forward. 

This article appears in the December issue of Australian Mining. 

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