[SMM Weekly Review] Capacity Realignment Underway, Price Uptrend Slowing Down

Australia's PLS Group is bullish on the lithium price outlook and is nearing a Final Investment Decision on doubling capacity at its Pilgangoora spodumene operation in Western Australia. CEO Dale Henderson said the P2000 expansion study will be released in the quarter ending December, targeting a doubling of output to 2.0 million tons per year. PLS posted a full-year net profit of A$526 million (US$377 million) for the 12 months to June 30, reversing a prior-year loss, though the result fell short of expectations. Henderson described the current environment as "the next part of the cycle," citing strong demand against constrained supply. Shares rose as much as 8.1% in Sydney on the results. The company said organic expansion remains the priority over dealmaking for now. SMM View: A confirmed FID on P2000 would mark one of the clearest supply-side signals of this cycle, and its downstream effect on grade differentials is the part the earnings release doesn't cover. As SC6 volumes potentially double out of Western Australia, the pricing relationship between Australian and African concentrate SC5.5 and SC5.0 grades moving CIF into China is where the real adjustment will show up first, likely well ahead of any public data catching up. SMM continues to track how offtake counterparties are positioning ahead of this decision and welcomes perspective from traders and converters active in these corridors.

Zimbabwe's lithium concentrate export ban takes effect 1 January 2027, and only one of the country's sulphate plants is complete Prospect Lithium Zimbabwe's $400 million facility at Arcadia. Sinomine's $500 million facility at Bikita and Yahua's plant at Kamativi remain under construction, while a state-owned project at Sandawana is still at feasibility stage. Producers have requested a deadline extension to mid-2027; government has not confirmed either way. Zimbabwe and Zambia meet in Livingstone in November, six weeks before the deadline. SMM View: Whether the extension is granted is the question every producer in the country is now pricing and it's not one the public record will answer first. Reliable CIF pricing and construction-progress detail out of Bikita and Kamativi remain hard to come by outside direct market contact.

SMM August 24: Lithium Argentina AG (TSX/NYSE: LAR) and Ganfeng Lithium Group Co., Ltd. have finalized agreements to consolidate their Pozuelos-Pastos Grandes ("PPG") projects in Salta Province, Argentina, into a single joint venture, alongside a $180 million strategic investment by Ganfeng into Lithium Argentina. The PPG JV combines Ganfeng's Pozuelos-Pastos Grandes project with Lithium Argentina's Pastos Grandes and Sal de la Puna projects, targeting 150,000 tpa of lithium carbonate equivalent capacity across three phases. Ganfeng holds 67% and will operate the JV; Lithium Argentina holds 33%. Combined historical investment stands at $1.8 billion, with completion expected in September 2026 under new Dutch holding entity Millennial Lithium B.V. Separately, Ganfeng will subscribe to a $180 million unsecured convertible note, carrying a 4.0% coupon, six-year term, and $12.50 conversion price a roughly 96% premium to Lithium Argentina's five-day VWAP through August 21. Proceeds will retire the company's $259 million convertible debt due January 2027. Upon full conversion, Ganfeng's stake in Lithium Argentina would rise from 9.6% to approximately 16.1%. The deal deepens a partnership already anchoring Cauchari-Olaroz, Argentina's largest lithium brine operation, where Lithium Argentina holds 44.8% and Ganfeng 46.7%. SMM View: The transaction extends Chinese capital's growing footprint in South American brine assets, echoing the consolidation already seen across African spodumene supply. It de-risks Lithium Argentina's near-term maturities while adding fresh LCE capacity to global project pipelines, with implications for offtake competition and CIF China pricing across both brine and hard-rock lithium chains.