Australian Lithium Miners Post Positive Quarterly Results as Spodumene Prices Remain High

Lithium spodumene feedstock prices are not pulling back, and these high levels supported Australian lithium miners as they released their results for the second quarter of the financial year.

Perth-based Pilbara Minerals’ (ASX:PLS,OTC Pink:PILBF) production for the December quarter was 162,151 dry metric tonnes (dmt) of spodumene concentrate — a 10 percent increase from the previous three month period. During that time, the company’s average realised spodumene concentrate sales price increased 33 percent to US$5,668 per dmt.

“(There were) improved pricing outcomes following negotiated price reviews with major offtake customers,” the company said.

Pilbara Minerals, which owns the lithium-tantalum Pilgangoora operation, has partnerships with Ganfeng Lithium (OTC Pink:GNENF,SZSE:002460), General Lithium, Great Wall Motor Company (OTC Pink:GWLLF,HKEX:2333), POSCO (NYSE:PKX), CATL (SZSE:300750) and Yibin Tianyi. Its share price is up 31.77 percent year-to-date, closing at AU$4.77 on Wednesday (February 1).

Meanwhile, leading Australian lithium and iron ore miner Mineral Resources (ASX:MIN,OTC Pink:MALRF) saw its Mount Marion operation's production increase 12 percent compared to the previous quarter to reach 121,000 dmt. The average realised spodumene concentrate price at Mount Marion was US$4,151 per dmt.

“The timing of the Mt Marion expansion of production capacity to 900,000 tonnes per year has been pushed back slightly due to the delayed supply of processing equipment and labour shortages,” the company, which owns a 51 percent share in the asset, said. “The upgrade is now expected to commence during April and ramp up to the full run-rate from July 2023.”

Aside from Mount Marion, the company holds interests in Wodgina in partnership with top producer Albemarle (NYSE:ALB). The companies decided to restart Wodgina in 2021 as a result of soaring global demand. Over the quarter, 38,000 dmt of spodumene concentrate were shipped from Wodgina, a 45 percent increase quarter-on-quarter.

Mineral Resources’ share price is up just over 20 percent year-to-date, closing at AU$90.25 on Wednesday.

During the December quarter, Argentina-headquartered Allkem (ASX:AKE,OTC Pink:OROCF) saw lithium carbonate sales hit 3,131 tonnes, generating record quarterly revenue of about US$151 million with a gross cash margin of 90 percent. In Western Australia, the company owns the Mount Cattlin mine, which produced 16,404 dmt of spodumene and shipped 15,702 dmt.

“Customer demand in the spodumene market remains robust, driven by strong lithium hydroxide requirements, and pricing in the March quarter is expected to be 5 percent above the December quarter,” the company said in a statement.

In Argentina, Allkem operates the Salar de Olaroz, which achieved record production of 4,253 tonnes of lithium carbonate, up 17 percent compared to the previous quarter.

The company is also developing the Sal de Vida lithium brine, with construction of the first two strings of ponds reaching 82 percent completion. The first six ponds are completed and filled with brine.

Additionally, in partnership with Toyota Tsusho (TSE:8015), Allkem is building a 10,000 tonne per year lithium hydroxide plant in Naraha, Japan. Allkem also owns the James Bay lithium pegmatite project in Canada.

On February 1, shares of Allkem were changing hands for AU$13.12, up over 18.84 percent year-to-date.

Although its main focus is nickel, Independence Group (ASX:IGO) has been involved in lithium since it bought a stake in Tianqi Lithium’s Australian assets. The companies, in joint venture, now control most of Greenbushes, the world's biggest lithium mine.

At the Greenbushes mine, production reached 379,146 tonnes of spodumene concentrate, up 5 percent compared to the December 2022 quarter. As global demand for lithium continues to strengthen, Greenbushes is undertaking several capital expansion projects, which IGO expects will increase installed production capacity from the current 1.5 million tonnes per year to 2.5 million tonnes per year over the next four years.

“Greenbushes recorded another strong quarter of spodumene production, whilst also continuing to deliver on the many growth and optimisation projects which are underway,” acting CEO Matt Dusci said. “A new chemical grade spodumene pricing formula was approved which will be effective from 1 January 2023.”

During the quarter, commercial production was declared for train 1 at the Kwinana refinery, with 9 tonnes of battery-grade lithium hydroxide sold at market prices as part of the ongoing qualification process.

Year-to-date, IGO has seen its share price increase 11.52 percent, and was trading at AU$14.71 on the first day of February.

All stocks data was accurate as of February 1, 2023.

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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.