Pilbara Minerals to turn off one of two lithium processing plants and slash output as prices plummet further

Pilbara Minerals will mothball part of its processing operations, curtail output and halt work on a proposed mid-stream processing plant as it bunkers down for another lithium winter. WA’s biggest pure play lithium miner will put the Ngungaju plant — one of two processing plants at its Pilgangoora mining operations in the Pilbara — on care and maintenance by December 1. The miner will also scale back planned production under a newly-dubbed P850 project, a move that ultimately cuts output by about 100,000 tonnes per annum and reduces its workforce. Works to scale up of capacity to 1 million tonnes per annum looks set to continue, however. The scale of the job losses, and how many will be redeployed, is not yet known. Guidance for the year has been pulled back from a 800kdmt –840kdmt band to between 700kdmt to 740kdmt. Chief executive Dale Henderson told the market the company had been focusing on prudent cost reduction initiatives in response to lithium market conditions”. The quarterly update issued on Wednesday revealed a tonne of its spodumene concentrate had plummeted 19 per cent since June, from $US840 to $US682, and shaving 31 per cent off revenues. “The Pilgangoora Operation will be managed to optimise the higher performing, lower cost Pilgan plant, while also temporarily placing the Ngungaju plant into care and maintenance, to reduce costs and further strengthen the company’s financial position,” Mr Henderson said. “For FY25, the optimised P850 model will reduce mining activity from seven budgeted mine fleets to four, require a smaller workforce and has the benefit of retaining key employees by redeploying personnel from the Ngungaju plant to the expanded Pilgan plant.” The calls to scale down operations are hoped to free up about $200 million in cash flow. Further construction works into a mid-stream demonstration plant project being built alongside Calix will also be deferred. The plant is backed by the Federal Government, which will put $20 million towards the project as part of its manufacturing initiatives. More to come.