By Nick Toscano
Australia’s largest independent lithium miner is preparing to boost output of the electric battery metal over the next year, even as prices languish around three-year lows amid a global oversupply and slower growth in electric car sales.
While other lithium miners are reining in supplies, Pilbara Minerals, a producer of hard-rock lithium known as spodumene from its Pilgangoora operations in Western Australia, told investors on Wednesday it was targeting a ramp-up of up to 15 per cent, from 725,000 tonnes to as much as 840,000 tonnes, in the 2025 financial year.
Pilbara Minerals’ Pilgangoora project in Western Australia.Credit: Carla Gottgens
The company on Wednesday posted stronger production volumes for the June quarter and a 58 per cent increase in revenue from the prior three months.
However, gains were partly offset by weaker-than-expected prices for its shipments of lithium-rich spodumene concentrate, which missed market forecasts, Barrenjoey analyst Glyn Lawcock said.
Pilbara Minerals chief executive Dale Henderson flagged that 2025 would be a unique year for the business as it expanded mining activities and pursued continued efficiency upgrades.
He said the company continued to face strong demand from its major customers and suggested the plunge in global lithium prices may have bottomed out due to the closure of some higher-cost mines this year.
“Obviously, it is incredibly hard to predict what is the bottom of the market,” Henderson said.
“However, I do take a lot of comfort from the fact that we have seen other supply sources come out of the market during the March quarter.”
While there remained a risk prices may not improve immediately, Henderson said the company did not see “any reason for it to go lower”.
“At the end of the day, this is a young growth market – it’s been volatile historically, incredibly hard to predict,” he said.
“But Pilbara is a low-cost operator [with a] strong balance sheet … we feel we’re incredibly well positioned to carry on building on our strengths.”
Australia is home to some of the world’s biggest known reserves of lithium, a metal often called “white gold” due to its silvery-white colour and the fact that it is a material the world needs in vastly greater quantities to build lithium-ion batteries for electric cars and renewable energy storage.
Automakers across the globe have been scrambling to lock in supplies of lithium and have been striking long-term contracts with producers across Western Australia and the Northern Territory.
Prices for the commodity have fallen sharply amid a slowdown in electric vehicle sales, which analysts have attributed to softer consumer demand in China and a combination of policy changes and higher interest rates in Europe and the United States, which have raised the cost of electric cars compared to internal combustion-engine vehicles.
The downturn has been increasing pressure on Australian producers, forcing some to rethink expansion plans. ASX-listed Core Lithium this year temporarily suspended mining at its Finniss lithium mine near Darwin and has switched to solely processing stockpiled ore.
Australian lithium spodumene export earnings tumbled 84 per cent year-on-year in the March quarter to $1 billion. Federal government forecasts suggest Australia’s annual lithium export earnings could be more than halved from $20 billion in 2022-23 to $9.1 billion by 2025.
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