Pilbara Minerals boss Dale Henderson has one eye on another purchase as lithium price hits ‘bottom’

Pilbara Minerals chief Dale Henderson says further acquisitions are “not off the cards”, after the lithium miner seemingly weathered a market storm. Pilbara’s Pilgangoora mine near Port Hedland lost money during the December quarter but beat market expectations, while “underperforming” offtake arrangements for the mine’s product were shed. The company is also adopting its ASX ticker of PLS as its new brand identity after expanding into South America. Pilbara will shortly finalise its $560 million takeover of ASX-listed Latin Resources, which owns the early-stage Salinas lithium project in Brazil, a move that Mr Henderson has consistently labelled as “counter-cyclical”. Mr Henderson was asked if he was tempted to squeeze in one more counter-cyclical purchase, given Pilbara still holds $1.2 billion cash in the bank and the lithium price has been improving since the start of this year. “As to further inorganic growth, that is not off the cards, however we’ve got a full plate of growth options to keep us busy,” he told The West Australian. Mr Henderson shutdown rumours PLS is eyeing off Sigma Lithium, which owns a producing mine near Salinas. PLS produced 188,200 tonnes of spodumene concentrate from Pilgangoora for the December quarter — 14 per cent lower than the September quarter. Sales of 204,100t were 5 per cent lower than the three months prior. The trimmed production stemmed from switching off one of the Pilgangoora processing plants — Ngungaju — during the quarter in light of the weak lithium market. The miner is on the cusp of finishing its P1000 expansion project, which Mr Henderson said would improve processing efficiencies at Pilgangoora. The price PLS realised for its spodumene on a 6 per cent graded basis rose 3 per cent to $US796 a tonne, but operating costs of $621/t were 2 per cent higher than the September quarter, owing mainly to the re-calibration of processing after the shutdown of Ngungaju. PLS lost $8 million from its operations in the December quarter. “The benefits of lower operating costs from the P850 operating model late in the quarter (were) offset by lower sales volume from placing Ngungaju into care and maintenance and planned downtime for the integration and ramp up of P680 crushing and sorting,” the company stated in an ASX announcement. Mr Henderson said lithium prices have moved upwards “about 5 or 6 per cent” since the beginning of this year but he would want to see a sustained increase before bringing Ngungaju back online. “It appears the lithium price bottomed during the (December) quarter after a prolonged decline, however it’s fairly early in that upwards movement and I think it’s too early to be thinking about bringing capacity back into the market.” PLS is set to get another shot in the arm after a disadvantageous offtake deal came to an end. “One offtake agreement concluded in the December quarter, retiring a pricing mechanism that had recently been underperforming against the market average,” the company stated. “Additionally, another customer offtake pricing mechanism was renegotiated to better align with the market average, effective from the commencement of calendar year 2025. This combination of changes will ensure that the average realised price across the group’s offtake agreements will better align with the market.” Details about the size of the offtake deals, or who they were with, were not disclosed. RBC Capital Markets analyst Kaan Peker said the quarter overall was a “strong” result, with production, sales and pricing ahead of expectations. “To note, there has been changes to two offtake agreements to better align with market pricing, which we view as a positive,” he said. Shares in PLS were up 3.7 per cent in afternoon trade to $2.36. The Pilbara Minerals name looks likely to slowly fade away from the company’s promotional material, with the miner flagging a change in branding. “Upon completion of the Latin Resources acquisition on 4 February 2025, Pilbara Minerals will evolve its external facing brand to better support the future direction of the group and establish a naming approach that can accommodate future growth,” it stated. “Going forward, Pilbara Minerals’ external brand positioning and logo will transition to ‘PLS’ which aligns with the existing ASX code and established market use. The planned transition will be incremental and focused on digital changes to minimise cost.”