17/06/2019 - 15:41

Pilgangoora sales limited on construction delays

17/06/2019 - 15:41

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Shares in Pilbara Minerals have fallen up to 10 per cent today after June quarter sales from its Pilgangoora project are expected to be lower than originally anticipated, due to construction delays by its offtake partners.

Pilgangoora sales limited on construction delays
Ken Brinsden says it's no secret that the spodumene supply market is experiencing some short-term challenges.

Shares in Pilbara Minerals have fallen up to 10 per cent today after June quarter sales from its Pilgangoora project are expected to be lower than originally anticipated, due to construction delays from its offtake partners.

The company said it achieved record production of 22,375 dry metric tonnes of spodumene concentrate during the month of May, representing around 85 per cent of planned stage one plant capacity.

However, Pilbara said sales for the June quarter had so far lagged behind expectations.

“While underlying demand for battery-ready lithium chemicals remains strong, delays in the construction, commissioning and build-out of the company’s offtake customer chemical conversion capacity in China has resulted in June quarter sales of spodumene concentrate being constrained,” it said.

Pilbara said current spodumene market conditions in China are being tempered by delays in the construction, commissioning and ramp-up of chemical conversion facilities that handle spodumene concentrate supply.

“This industry-wide situation is also true for Pilbara Mineral’s stage one offtake customer group, where both General Lithium and Ganfeng have been constructing, commissioning and ramping-up substantial new chemical conversion capacity in the last 6 to 9 months. In each case, this has taken longer than expected,” it said.

The company said it would work with its offtake customers to accommodate their revised ramp-up timelines and arrange sales to other strategic customers.

“In response, production at Pilgangoora will be moderated during June and July with the company utilising this opportunity to undertake continued rectification of RCR defects, complete further plant improvement works, and draw-down final product stocks.”

Pilbara Minerals managing director Ken Brinsden said it was no secret that the spodumene supply market was experiencing some short-term challenges.

“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 EV production and energy storage market targets,” he said.

Shares in Pilbara were down 5.7 per cent to trade at 66 cents each at 2.30pm AEST.

 

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