Pilbara Minerals believes it is in good stead for a market recovery after the Pilgangoora lithium project in Western Australia faced no material operational impact from coronavirus in the March quarter.
The implementation of a moderate production strategy last year, along with a range of recent coronavirus health and safety measures, allowed the company to continue delivering positive sales, credit and shipping results during the quarter.
Pilbara Minerals produced 20,251 dry metric tonnes of spodumene concentrate, which was up from 14,711 dry metric tonnes in the December quarter.
Spodumene concentrate shipments saw a slight increase over the December quarter’s results, moving up from 33,171 dry metric tonnes to 33,729 dry metric tonnes.
The company secured a 75,000 tonne per annum offtake agreement with Yibin Tianyi, who is involved in CATL’s lithium supply chain, with the first shipment of 20,0000 of spodumene concentrate completed in March 2020.
With campaign mining and processing continuing in the March quarter, Pilbara Minerals managing director and chief executive officer Ken Brinsden said the company responded to nine months of soft market conditions and the coronavirus pandemic in a way that saw them deliver a strong performance.
“The March quarter was a reasonably positive and productive period for our business. Operationally and financially, we achieved exactly what we set out to do, with the moderated production strategy deployed last year continuing to deliver pleasing results,” he said.
“The rapid escalation in the COVID-19 pandemic has been the dominant theme for the first few months of 2020.
“As a business we have responded rapidly and in line with government directives to this unfolding situation.”
Brinsden said the company’s Pilgangoora project will help see them through into ramping up production when the market begins to bounce back.
“Having taken prudent measures over the past nine months in response to soft market conditions, Pilbara Minerals is well placed having maintained a strong balance sheet,” he said.
“With the lifting of COVID-19 restrictions in China, coupled with the extension of China’s EV subsidy program, the Company is hopeful of an improvement in market conditions as economic activity resumes in China.
“Underpinned by a world-class asset in the Pilgangoora project and our ability to ramp up production once market conditions improve, this puts us in a strong position to capitalise on the recovery in the market and resume our longer-term growth pathway.
“The benefits of the plant improvement works were reflected in our ability to continue to achieve improved lithia recovery, even in a moderated production environment, and therefore reduce unit costs to preserve cash-flow and strengthen our balance sheet by quarter-end.”