PERTH (miningweekly.com) – Lithium miner Pilbara Minerals on Monday said that it would cut back on production form its Pilgangoora project, in Western Australia, during June and July this year, on the back of constrained sales during the June quarter.
Pilbara told shareholders that the Pilgangoora lithium/tantalum project had delivered a record 22 375 t of spodumene concentrate during the month of May, representing some 85% of the planned Stage 1 plant capacity.
The miner noted that while the underlying demand for battery-ready lithium chemicals remained strong, delays in the construction, commissioning and build-out of Pilbara’s offtake customer chemical conversion capacity in China has resulted in spodumene concentrate sales in the June quarter being constrained.
“Its no secret that spodumene supply market is experiencing some short-term challenges as the big players, including our cornerstone customers, work to commission and ramp-up their chemical conversion plants in China,” said Pilbara MD and CEO Ken Brinsden.
“As a business, we have decided to proactively respond to this by working with our long-term partners to assist them where possible during this period. This means that over the coming months we will be moderating production levels to better align our business with expected spodumene demand conditions and use this time to deliver key improvements in the plant.”
Spodumene concentrate production is forecast to be in the range of 20 000 t to 24 000 t during June, with final production levels for the month subject to a nominal six-day planned shut-down of the concentrator and production performance thereafter.
Pilbara will use this plant shut-down to continue to rectify prior work performance by the engineering, procurement and construction contractor, while also continuing further plant improvement works with the focus of achieving design recovery by the end of 2019.
A further planned shut-down of the concentrator in the second half of July is also planned which will facilitate ongoing plant improvement works, RCR defect rectification and will support the draw-down of existing product stocks to meet ongoing sales requirements.
“We remain confident that the underlying fundamentals of the lithium market remain strong, as evidenced by the growing number of agreements being made by major car manufacturers further down the supply chain in both Chinese and global markets, to shore up lithium supply to meet their long-term electric vehicle production and energy storage market targets,” said Brinsden.
“Our strategy remains unchanged, and we will continue to work to expand the project as planned and diversify our supply chain to become a fully integrated participant in the lithium raw material and chemical supply chain, which we believe is the best way to deliver value to the company and our shareholders in the future.”