Australian lithium producer PLS says the strong demand for battery storage for data centres and AI has helped spark a turnaround in the lithium price, and its own fortunes.
Formerly known as Pilbara Minerals, the company made a half-year net profit of $33 million up 147 per cent on the $69 million loss the same time a year ago.
The recovery has given it confidence to restart its Ngungaju mine in WA, mothballed in December 2024 when prices crashed. Chief executive Dale Henderson says the decision to restart Ngungaju was influenced by its recent offtake deal with China's Canmax that included a m...
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0:27Now, there's been a big turnaround in the results today. Are prices the main driver?
7:50PLS has reported cash of about 954 million on the book, and you're back in profit, but investors didn't get a dividend this time. Will they get one soon?
For lithium, as demand is deepening and spreading. And so at the highest level, we're seeing this broad electrification shift occurring as the world looks to move from pipes to wires. Now, yes, renewables is supporting that, but it's not just renewables.
Six months ago, you were announcing a full-year loss and tumbling lithium prices were at play. Now, there's been a big turnaround in the results today. Are prices the main driver?
Look, it was one of the main drivers. Yeah, we saw a 40% improvement from the prior half, but it wasn't the only change. Pleasingly, strong production performance, strong sales performance, and a reduction in cost. So all of that played through to the very strong EBITDA that we had at 253 million and the strong EBITDA margin of sort of circa 40-odd percent. So yeah, really happy with the half's results.
It appears the recovery in prices has given you enough confidence to restart the Nangadu mine in WA, mothballed when prices crashed. How optimistic are you about the outlook?
Look, in the short term, there's a number of very positive indicators. We've had a lot of strong inbound interest seeking supply. We announced an offtake just last week on very strong terms. So there's those types of points, and then outside of that, well, we're seeing sustained strong pricing, and in terms of demand signals, there's a lot we can see that supports that continued demand at least in the near term. But of course, beyond that, well, look, we think the long-term drivers for the industry are incredibly positive, and of course, you know, that's why we're a scale producer, and that's why we've set ourselves up to grow with the market in time.
As far as we're aware, this is a first of its kind for the industry in terms of the combination of terms, in terms of the price floor that you mentioned, the 100 million US prepaid unsecured provided, plus the volume. So this combination is significant, and of course it speaks to Canmax's confidence around the outlook for the market, but it also speaks to the value they place on PLS as a supplier and the want to secure the supply from PLS. So delighted to have awarded that to Canmax, and delighted to be furthering our relationship with them because we've worked with them for quite a few years now.
Recently, US company Albemarle said it was immediately shutting down its processing facility, saying lithium price gains aren't enough to support local processing. Where are you at with your joint venture? And do you see Australia as just a raw spodumene exporter, or could we have processing onshore?
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