Pilbara Minerals (PLS.AX), Australia’s largest pure-play lithium miner, reported an 86% decline in annual profit, attributing the drop to lower lithium prices, which are crucial for electric vehicle (EV) battery production. The average realized price for lithium spodumene concentrate fell by 74% to $1,176 per tonne in fiscal 2024.
The company’s underlying profit after tax plummeted to A$318 million ($215.83 million) for the year ending June 30, down from A$2.28 billion the previous year. This decline is largely due to oversupply from China and a slowdown in EV adoption rates, which have pressured lithium prices.
In response to these challenges, Pilbara is advancing its P1000 expansion project in Pilgangoora, Western Australia, aimed at increasing production capacity by 47% to 1 million tonnes, expected to commence next year. CEO Dale Henderson mentioned that the company is also assessing a further expansion project, P2000, but will monitor market signals before proceeding.
Additionally, Pilbara has secured commitments for a new A$1 billion debt facility to refinance existing project debt and bolster its balance sheet. CFO Luke Bartoli clarified that while this facility could fund growth initiatives, it is not exclusively for that purpose.
Despite the challenges, Pilbara’s shares fell only 0.3% in early trading, following an agreement to acquire smaller rival Latin Resources (LRS.AX) earlier this month.