Pilbara reports quarterly negative cash flow and adjusts production target

On 29 October, Pilbara Minerals reported a 3% dip in lithium production and a 31% revenue decline for the September quarter. The company produced 220,100 dmt of spodumene concentrate, down from 226,200 dmt in the previous quarter, while sales dropped 9% to 214,500 dmt at an average price of US$682 per tonne, compared to US$840 in June. Pilbara's cash balance decreased by 17% to A$1.4 billion as of September 30, 2024.

To navigate low lithium prices, Pilbara is shifting to a “P850” model, focusing production at the Pilgan plant and placing the higher-cost Ngungaju plant on standby from December. This operational adjustment will reduce FY2025 production by about 100,000 tonnes.

Management explained that the P850 model targets 75% recovery with stable grades and projects A$200 million in savings at a US$700 per tonne price basis. Despite placing Ngungaju on care and maintenance, customer offtakes remain unaffected as Pilbara focuses on meeting base agreements and optimizing production at Pilgan. The Ngungaju pause provides flexibility to scale up quickly if lithium prices rise.