Workers at Pilbara Minerals’ Pilgangoora operation in WA. Source: PLS/Twitter.
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  • Surging lithium prices drive record quarterly cashflow for Pilbara Minerals (PLS) despite impacts on production from plant commissioning, ramp-up delays and labour shortages
  • Production for the quarter was 83,476 dry metric tonnes (dmt) of spodumene concentrate, a slight drop from the September quarter’s 85,759 dmt
  • The company says the production fall was due to extended duration outages and delays at both the Ngungaju and Pilgan plants over the quarter, exacerbated by the WA border closure
  • Pilbara Minerals says it is now planning to revise its production guidance again for FY22
  • PLS shares up 1.24 per cent to $3.26 per share

Surging lithium prices have underpinned a record quarterly operating cashflow for Pilbara Minerals (PLS) despite the impacts on production from plant commissioning, ramp-up delays and labour shortages.

The company said that during the December quarter it continued to progress work programs designed to increase spodumene concentrate production at its Pilgangoora project in Western Australia’s Pilbara region.

Production for the quarter weighed in at 83,476 dry metric tonnes (dmt) of spodumene concentrate, compared with the output total for the September quarter of 85,759 dmt.

Pilbara Minerals said the lower production for the December period was due to extended duration outages and delays at both the Ngungaju and Pilgan plants.

The delays and shortfalls were exacerbated by the continued WA border closure, which the company said was hampering the ability of all mining companies in WA to hire key workers in construction, production and maintenance roles.

Pilbara Minerals had revised its FY22 annual concentrate production guidance to 400,000-450,000 dmt, down from 460,000-510,000 dmt. Further plant ramp-up delays and ongoing labour shortages have prompted the company to look at the guidance figures again.

Across the December quarter, Pilbara Minerals shipped 78,679 dmt of spodumene concentrate, which was down 14 per cent quarter on the preceding quarter.

Buoyant lithium prices helped soften the production impacts for the company, with a record three-month cashflow from operations of $115.5 million in the December quarter.

Average concentrate prices it received in the December quarter came in at about US$1,750-US$1,800/dmt.

Indicative pricing for the current quarter under existing offtake contracts was expected to be in the range of US$2,600-US$3,000/dmt.

“Prices for spodumene concentrate and lithium raw materials reached record highs in the
December quarter, fuelled by surging demand and concerns about supply shortages,” the $9.58 billion market-cap company said.

A key driver of current market conditions has been surging electric vehicle sales in Europe and the explosive growth of China’s New Energy Vehicle (NEV) market, Pilbara Minerals said.

NEV sales in China are likely to reach 3.4 million units in 2021 and five million units in 2022, according to data from the China Association of Automobile Manufacturers. These sales, if the figures are accurate, represent an increase of 300 per cent on what the country sold in 2020.

PLS shares were up 1.24 per cent at $3.26 per share at 11:14 pm AEDT.

PLS by the numbers
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