Pilbara Minerals lifts quarterly output but will cut capex, dividend

The news: Lithium producer Pilbara Minerals has lifted production and sales in the December quarter but also flagged plans to cut capital expenditure in FY2024 and skip a first-half dividend amid a slide in prices.

The numbers: December quarter spodumene concentrate production was up 22% from the prior quarter to 176,000 tonnes, while sales were up 9% to 159,900 tonnes. However, the average realised price slid 50% to USD1,118 a tonne. Pilbara plans to cut its fiscal capex by up to 10% to a range of $820 million-$875 million, and warned it is unlikely to pay a dividend for the six months to December 2023. Pilbara shares were up 6% in early trading to $3.47 each.

The context: The capex decision comes at a time when lithium prices have slumped globally and led to a scaling back in operations for several rivals including Core Lithium and Liontown Resources. Pilbara said the reduction will not affect development at its key P680 and P1000 projects in WA, which remain on schedule. It reaffirmed all other FY24 guidance and said it remains optimistic about the long-term outlook for lithium despite pricing volatility.