Pilbara Minerals has adopted a moderation strategy at its Pilgangoora lithium-tantalum project in Western Australia in the midst of market challenges.
The company shipped 20,044 dry metric tonnes of spodumene concentrate for the September quarter, which was at the lower end of its revised guidance.
This comes at a time when the entire lithium raw materials industry is struggling against a weakened demand from China, due to changes to the country’s subsidy regime to support Chinese electric vehicle production.
Pilbara Minerals stated the entire lithium raw materials industry was being impacted by weaker Chinese demand conditions.
The company made 40 positions redundant in a bid to rationalise its operational team across the mine and processing areas, while moderating its production rate.
“Despite difficult decisions having to be made, the response of management and the board to the challenging market conditions ensures value is maintained in the Pilgangoora asset for the long term and we can respond as market demand improves from here,” Pilbara Minerals managing director and chief executive officer Ken Brinsden said.
“Production in the September quarter was moderated in response to soft market conditions and our offtake partners’ slower-than-expected ramp up of their facilities in China.”
Pilbara Minerals has curtailed both its mining and processing capacity at Pilgangoora, resulting in reduced mining activity, processed tonnes and shipped concentrate on prior quarters.
The company’s moderation strategy will continue into the December quarter, with half its sales supported by existing run-of-mine ore, crushed ore and final product stocks on hand.
Pilbara Minerals signed binding terms with POSCO for their joint venture in the September quarter. It also received a $55 million equity investment from Chinese electric vehicle company Contemporary Amperex Technology (CATL) during the same period.
Equity raising proceeds will go towards the Pilgangoora stage one process plant works, including installing low-intensity magnetic separation units, wet high-intensity magnetic system upgrades, valve replacements and classification process improvements.
“Both of these outcomes clearly demonstrate strong interest from major participants in the global lithium supply chain and a long life and high-quality project in a very safe mining jurisdiction like the Pilgangoora project,” Brinsden said.