Pilbara Minerals declares commercial levels of lithium production

Pilbara Minerals declares commercial levels of production of lithium spodumene concentrate effective from April 1, with production ramping up in the January-March quarter although sales were down due to the effects of Cyclone Veronica.

Production from Australian lithium miner Pilbara Minerals was up by 9.06% in the January-March quarter of 2019 to 52,196 tonnes of lithium spodumene concentrate, it said in a quarterly activities report published on Monday April 29.

Output in the first three months, which was the third quarter of the company’s financial year, was up from 47,859 tonnes of lithium spodumene produced in October-December 2018, and was achieved despite the disruption caused by Cyclone Veronica.

According to the company, Cyclone Veronica affected access to the central stage 1 of its Pilgangoora project mining area between late March and early April, delaying the mining of fresh ore.

Pilbara produced 11,015 tonnes of lithium spodumene in the July-September quarter last year, the company’s first quarter of production.

But in the March quarter, sales of lithium spodumene concentrate were down by 17.24% due to the adverse weather conditions. The company sold 38,562 tonnes of spodumene concentrate in those three months, compared with 46,598 tonnes in the December quarter.

Cyclone Veronica delayed the shipment of 10,000 tonnes of lithium spodumene concentrate, Pilbara said.

The company sold its lithium spodumene concentrate at $675 per tonne on a cif China basis, and according to the price model agreed with customers, which establishes a price reference weighted toward Chinese domestic battery-grade lithium prices and the import prices of selected cathode materials buyers.

Fastmarkets’ latest assessment the contract price of lithium spodumene (min 5-6% Li2O) was $600-700 per tonne cif China on April 24, down from $900-970 per tonne on May 30 last year.

Despite the lower prices, market participants spoken to by Fastmarkets agreed that production of lithium spodumene from Western Australia will continue to have support from Chinese demand.

"Chinese converters maintain a healthy level of spodumene consumption, supporting the production of this mineral in Australia, particularly due to Chinese exports of lithium hydroxide for the battery industries in Japan and South Korea," Ken Brinsden, Pilbara Minerals’ managing director and chief executive officer, told Fastmarkets.

Pilbara achieved a steady and sustained performance in the production of lithium spodumene concentrate that met, and was expected to continue to meet, customers’ required specifications, with an average minimum lithia content of approximately 6%. As a result, Pilbara has successfully completed its development phase and declared commercial production effective from April 1.

Pilbara expected to continue to improve and optimize its process plant, seeking to improve the average in lithia recovery to 75% by the end of 2019, from 63-65% recovery achieved in April. Pilbara’s flotation circuit was designed to achieve a lithia recovery rate of 75%.

"The March quarter was another busy period for Pilbara Minerals," Brinsden said in the quarterly results announcement, "as we continued to make further operational progress at the Pilgangoora Project, while maintaining momentum with our long-term growth initiatives – including the stage 2 and 3 expansions, and our strategy to diversify operations into the downstream chemical conversion industry."

Pilgangoora’s stage 1 production has a production target of 330,000 tonnes per year of lithium spodumene, the equivalent of nearly 43,000 tpy of lithium carbonate equivalent (LCE), in the period from June 2018 to 2020.

Stage 2 of the expansion process will be delayed by six months, and was now set to commence in the September quarter of 2020, with the intention to increase the company’s total output by as much as 850,000 tpy of lithium spodumene, or close to 110,000 tpy of LCE.

The scoping study for Pilgangoora’s stage 3 expansion anticipated production of as much as 1.2 million tpy of lithium spodumene.

Martim Facada

martim.facada@fastmarkets.com

Published

Martim Facada

May 01, 2019

10:15 GMT

London