Lithium

Pilbara Minerals secures near record US$6,188/t lithium spodumene sale

Thu 14 Jul 22, 10:31am (AEST)
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Key Points

  • Pilbara Minerals' latest spodumene auction received a winning bid of US$6,188/dmt
  • This is the first time an auction has come in lower than the last
  • Pilbara Minerals expects June quarter production costs to be in the range of $650-680/dmt

This is the first time a Pilbara Minerals (ASX: PLS) lithium spodumene auction has come in lower than the last, but not by much. The company's stock opened -1.5% lower as the market opened,

Pilbara Minerals intends to accept the highest bid of US$6,188/dmt for a cargo of 5,000 tonnes. Delivery is expected to take place from late August 2022.

Battery Material Exchange auction history (US$, % vs. previous auction): 

  • July, 2021: $1,250

  • Sep 2021: $2,240 (+79%)

  • Oct 2021: $2,350 (+5%)

  • Apr 2022: $5,650 (+140%)

  • May 2022: $,5,955 (+5.4%)

  • June: $6,350 (+6.6%)

  • July: $6,188 (-2.55%)

In a June quarter production update, Pilbara Minerals said it expects unit costs to be in the range of $650 to $680/dmt, up from $632/dmt in the March quarter.

The uptick in costs includes the substantial investment in mining activities and workforce to support the planned expansion of the Ngungaju and broader Pilgangoora Projects.

Net diesel fuel prices had also increased 40% compared to the March quarter.

Still, the uptick in costs seems rather immaterial given the surge in spodumene prices.

Its worth noting that these spot auction sales represent only a fraction of overall spodumene production (estimated shipments for the June quarter of 127-132,000 dmt).

The June quarter update said the company expects to close FY22 with an outsized cash balance of $850 to $855m, up from $285m in the March quarter.

It will be interesting to see where this cash goes - whether that be further growth oriented initiatives or maybe even a maiden dividend.

Pilbara Minerals Ltd (ASX PLS) Share Price - Market Index
Pilbara Minerals 12-month price chart

 

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Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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