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Pilbara Minerals May Double Lithium Output From Australian Mine

(Bloomberg) -- Lithium pure-play Pilbara Minerals Ltd. is considering plans to double output of concentrate from its major Australian project, citing confidence that prices in the key battery metal have stabilized after 2023’s slump.

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The company is looking to expand concentrate production to about 2 million tons per annum over the coming years, pending a final investment decision on its A$1.2 billion ($800 million) plan, it said in a statement Friday. A smaller expansion to lift output to 1 million tons is already under construction.

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Approving another ramp-up would be a big bet by Pilbara Minerals that prices of lithium spodumene are over the worst, after China’s benchmark index slumped 81% last year amid a supply glut. While prices have stabilized in 2024 and long-term forecasts are bullish, the metal is still languishing near two-year lows as demand fails to keep pace with increased global production.

Pilbara Minerals shares fell as much as 3.9% on Friday after the announcement to the lowest since August 2022.

Lithium carbonate prices may recover over the longer term to about $1,500 per ton for spodumene concentrate, from about $1,300 now, Chief Executive Officer Dale Henderson said. The company would have a “disciplined approach” to the expansion plan and would aim to complete a feasibility study by 2025’s December quarter before making a final investment decision.

“The timing of the final investment decision will be considered in conjunction with the prevailing market conditions and only proceed when it makes sense to do so,” Henderson said.

The company’s output for the 12 months to June 30, 2024, is forecast to hit 690,000 tons. Should the expansion to 2 million tons per annum proceed, the mine’s output would rival that of the world’s largest hard-rock lithium mine — the Greenbushes project co-owned by Tianqi Lithium Corp., IGO Ltd. and Albemarle Corp. — in Western Australia’s southern region.

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