Pilbara Minerals Sees Lithium Demand Recovery Despite Reporting Loss

Australia’s largest pure-play lithium producer, Pilbara Minerals, expects demand recovery amid the restart of a major lithium mine and refinery in China, despite posting a net loss for the half-year ending December 31.

The company reported a net loss of A$69 million ($44 million) as lithium carbonate prices fell approximately 87% from their 2022 peak and declined over 22% compared to the same period last year. Shares remained largely unchanged at A$2.01 following the announcement.

Pilbara Minerals CEO Dale Henderson attributed the anticipated demand recovery to the restart of Contemporary Amperex Technology Co. Ltd. (CATL)’s lithium project in China. CATL, the world’s largest EV battery producer, is resuming operations in response to supply chain constraints.

“The restart of that particular mine, I frankly see as a positive,” Henderson said in an interview with Bloomberg TV. “Over the past 18 months, the steady decline in prices has led to several production curtailments, but we believe prices will inevitably rise.”

Pilbara Minerals, which extracts lithium from its Pilgangoora mine in northern Australia, is ramping up production despite recent challenges. The company temporarily shut down one of its processing plants in the past six months due to declining prices impacting margins.

In addition to increasing sales from its existing operations, Pilbara Minerals has expanded its portfolio by acquiring Latin Resources Ltd., which holds undeveloped lithium projects in Brazil. While the company currently focuses on spodumene, a mineral source of lithium, Henderson did not rule out potential expansion into lithium brine extraction in the future.

“It’s certainly on the cards,” he said, noting that any move into lithium brine would likely be limited initially as it is outside the company’s core expertise.