Pilbara Minerals’ spodumene output rises three-fold at Pilgangoora mine

By Martim Facada
Published: Tuesday, 26 February 2019

The miner's Pilgangoora mine is now operating at 85% capacity.

Australian lithium miner Pilbara Minerals produced 47,859 tonnes of lithium spodumene, min 6%, at its Pilgangoora lithium-tantalum mine in Western Australia in the final quarter of last year, up from 11,015 tonnes in the third quarter.

Pilbara Minerals sold 46,682 tonnes of lithium spodumene with an average grade of 6.11% in the December quarter, at an average selling price of $742 per tonne cfr. The buyers were General Lithium and Ganfeng Lithium, its Chinese partners for offtake from the first phase of operations.

Fastmarkets assessed the price of lithium spodumene, min 5-6%, cif China, at $600-750 per tonne on on December 26, down by $50 per tonne month on month.

Pilbara Minerals started the commissioning and production of lithium spodumene in June 2018, shipping the first 8,800 tonnes of lithium spodumene, min 6.1%, in October.

Pilgangoora is currently producing at 85% of first-phase design capacity. It has a production target of 330,000 tonnes per year of lithium spodumene, min 6%, the equivalent of nearly 43,000 tpy of lithium carbonate equivalent (LCE).

The first phase is anticipated to run from June 2018 to 2020. The second-phase expansion is set to start commissioning in the first quarter of 2020, with the intention of increasing the company’s total output by as much as 850,000 tpy of lithium spodumene, min 6% - or close to 110,000 tpy of LCE.

Direct shipping ore program suspended

Pilbara Minerals has suspended its direct shipping ore (DSO) program with customers Atlas Iron and Sinosteel, currently pending final evaluation.

The company said that the strong performance of first-phase spodumene production, alongside softer markets conditions in China, had forced the company to reassess the benefits of shipping DSO.

The shipping of DSO was a strategy employed by Pilbara Minerals in the early stages of phase one to generate cash flow during construction, when peak cash outflow was forecast.

Pilbara Minerals is now in talks with Atlas Iron and Sinosteel since the phase-one construction period has concluded, and now that the benefits of keeping a separate DSO operation are no longer material, the producer added.

Pilbara Minerals sold 205,766 tonnes of DSO in the September quarter and 145,974 tonnes in the June quarter of 2018.