a good , enthusiastic summary:
Pilbara Minerals’ 4th quarter and early 2021-22 figures confirm that lithium is a high-margin business after the company revealed that it held over $A874 million in cash at June 30 thanks to higher tonnages of spodumene sales and higher prices.
The company’s financial year report won’t be issued until late this month but from the preliminary data, there are clear signs that the earnings figure will be huge.
A back-of-the-envelope figuring from data for income and outgoings disclosed in the report suggests EBITDA for the quarter could be as much as $550 million. That’s a gross profit margin of more than 76%.
Pilbara reported that it had produced 127,236 dry metric tonnes (dmt) of lithium spodumene concentrate over the June quarter.
That was up 56% from the 81,431 tonnes the company reported for the March quarter and significantly higher than the 77,142 dmt produced in the final quarter of 2020-21.
The 2022 production included the first concentrate from the company’s Ngungaju Plant in WA.
For the June 30 year, Pilbara produced 377,902 dry metric tonnes of spodumene concentrate, a 35% increase over the 284,00 tonnes the company recorded for 2020.
Spodumene shipments also rose over the quarter, increasing 127% from the 58,383 tonnes for the March quarter to the 132,424 tonnes recorded for the June quarter.
Total shipments for 2021-22 were 361,025 tonnes, up 28% from 281,440 tonnes the year before.
Pilbara recorded an average sales price of $US4,267 per dry metric tonne over the June quarter, another rise over the previous quarter, in which Pilbara was only able to achieve an average of $US2,650 per tonne. Pilbara received less than $US1,000 a tonne for spodumene in 2020-21.
In terms of outlook, Pilbara had this to say:
“Market demand for battery raw materials remained strong, with Chinese lithium prices stabilising close to all-time highs…During the June Quarter 2022… Pilbara Minerals… continued to progress work programs and activities to increase spodumene concentrate production at the Pilgangoora Project, in response to surging global demand for lithium raw materials…”
The Pilgangoora operation is WA world’s largest independent hard-rock lithium mine. Two processing plants on-site — Pilgan and Ngungaju — produce spodumene and tantalite concentrate.
But the big story is to be found in the dollars in the report.
Pilbara Minerals closed the June quarter with a cash balance of $A874.2 million, which included $A282.4 million in irrevocable bank letters of credit for shipments completed within the Quarter.
This was an increase of $A589.3 million over the March 31 balance of $A284.9 million “and was achieved on the back of increased production and higher selling prices,” according to Pilbara.
As a guide to earnings, that cash balance at June 30 nearly 8 times the $A115 million on hand at June 30, 2021.
During the Quarter, Pilbara Minerals said it was paid $A561.8 million from customer sales associated with the sale of 98,122 dmt of Pilgan Plant spodumene concentrate (“which included of $8.5 million in receipts following finalisation of final pricing adjustments for March Quarter cargoes that were provisionally priced”).
Australia’s still rapidly growing lithium industry is also maturing with equal speed as it becomes a major export success and source of growing revenues and earnings for investors. And then there's Albemarle...