Pilbara Minerals hopeful of lithium market turnaround, secures new financing

Sydney — Australia's Pilbara Minerals said July 30 it thinks lithium prices are nearing the bottom and that it has secured new financing to help see it through the current market headwinds which have been exacerbated by the coronavirus pandemic.

The miner has secured a new $110-million debt facility from BNP Paribas and Australia's Clean Energy Finance Corporation to replace its existing $100-million Nordic Bond which was used to support the financing of stage 1 of the company's flagship Pilgangoora Lithium-Tantalum project in 2017.

"The new facilities are offered on very competitive terms, putting us in a very strong position to ride out the current soft market conditions and capitalize on the rebound in the lithium market, when that inevitably occurs," managing director and CEO Ken Brinsden said.

The company moderated production from its 100%-owned Pilgangoora mine in the April-June quarter as it weathered low prices.

Spodumene concentrate production for the period was 34,484 mt, up from 20,251 mt in January-March, but well below April-June's 63,782 mt.

"Market signaling indicates lithium pricing may be approaching the bottom," the company said, pointing to forecasts of a demand surge and price turnaround in 2021.

Lithium producers are hopeful of post-coronavirus stimulus packages and incentives from various governments for electric vehicles in the medium term.

The company's new financing comes with an extended grace period before quarterly principal repayments commence in September 2022.

Pilbara Minerals said, given the market conditions, it is not rushing to finalize further feasibility studies on the stage 2, 5 million mt a year phase of the Pilgangoora project. If supported by customer demand, the first phase of the stage 2 expansion could be delivered within nine months of the final investment decision, the company said.