Join our daily newsletter At The Bell to receive exclusive market insights
- Pilbara Minerals (PLS) opens green on Friday morning after announcing a planned staged restart of production at its Ngungaju Plant
- Production will kick off during the December quarter this year and will be ramped up through to mid-2022
- The ASX 200 lister expects the restart to cost around $39 million, and PLS says it will likely fund the project from its existing cash reserves
- Meanwhile, Pilbara Minerals says it expects record spodumene concentrate shipments over the final quarter of the 2021 financial year
- Shares in Pilbara Minerals are up 2.27 per cent and trading at $1.58 each at 10:30 am AEST
WA lithium play Pilbara Minerals (PLS) has opened green on Friday morning after announcing a planned staged restart of production at its Ngungaju Plant.
The plant is part of Pilbara’s flagship Pilgangoora Project in Western Australia and lies near the Pilgan Plant in the area.
Pilbara Minerals told investors this morning its board has approved a staged restart of the Ngungaju Plant, which means it will start producing spodumene concentrate before the end of the year.
Under the staged restart, operations at Ngungaju will kick off during the December quarter of 2021, then be ramped up to produce between 180,000 and 200,000 dry metric tonnes (dmt) of concentrate by mid-2022.
Once ramped up, the Ngungaju Plant will see the annual production capacity of the wider Pilgangoora Project bolstered to between 560,000 and 580,000 dmt.
A “key milestone” for PLS
Pilbara Minerals management said the decision to restart Ngangaju operations comes as the company works to maximise the value of its recent Altura Lithium. purchase.
The restart will cost around $39 million and is expected to expand PLS’ production capacity and increase its scale of operations amid strong demand conditions in the lithium market.
The ASX 200 lister said it’s likely to fund the restart entirely from existing cash reserves, but it isn’t ruling out restructuring some debt to help with funding.
Company Managing Director and CEO Ken Brinsden said the company was “uniquely positioned” to benefit from the growing demand for spodumene.
“The well-timed acquisition of the Altura Lithium Operations provides Pilbara Minerals with available spodumene concentrate at the same time the market is expected to grow rapidly to deal with the mass global adoption of lithium-ion battery technology for use in clean energy applications,” Mr Brinsden said.
“While production costs will likely be slightly elevated during FY22, we remain confident in both Pilgangoora’s pre-eminent position as an important global lithium raw materials supply based and the trend towards lower cost in the coming years as the Ngungaju Plant restarts, normalises and production settles at a higher rate.”
PLS said its Pilgan Plant has a strong track record of recovery performance thanks to the company’s grind optimisation, process controls, free-iron removal, and other production processes. These same optimisations and processes will be incorporated into the Ngungaju Plant.
Record quarterly shipments
Alongside the news of the plant restart, Pilbara announced today it expects record spodumene concentrate shipments of 96,000 dmt over the final quarter of the 2021 financial year.
While full shipment details are slated for release with PLS’ next quarterly report before the end of July, the company said today sales are expected to be around 109,000 tonnes for the June quarter.
As far as spending goes, Pilbara Minerals said it’s predicting operating costs of between $525 and $575 per dry metric tonne over the 2022 financial year, though these costs are expected to trend lower from the 2023 calendar year.
Shares in Pilbara Minerals were up 2.27 per cent and trading at $1.58 each at 10:30 am AEST. The company has a $4.45 billion market cap.
