Expansion plan weighs on Pilbara Minerals shares
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More news: Shares in Pilbara Minerals dropped more than 2% to $3.13 after the lithium producer outlined plans for a potential doubling of capacity to 2 million tonnes per annum by 2028 at a cost of $1.2 billion.
The stock is down 35% over the last 12 months as the sector deals with a slump in lithium prices globally.
Pilbara Minerals plan to double capacity to cost $1.2 billion
The news: Lithium producer Pilbara Minerals says a pre-feasibility study has found that production at its flagship Pilgangoora mine in Western Australia could be doubled by 2028.
The numbers: The pre-feasibility study for the P2000 project found capacity could be expanded to an annual production volume of 2 million tonnes of spodumene concentrate.
This had an estimated capital expenditure of $1.2 billion for a new whole of ore flotation plant at Pilgangoora to complement the existing operations.
The context: Pilbara said the next stage is a feasibility study for the P2000 project which will be completed in the last quarter of 2025. A potential financial investment decision will then be taken based on project approvals, market outlook and funding options.
The company is on track to deliver nameplate production rate of 1 million tonnes per annum under its current P1000 project by the September quarter of 2025 but has been otherwise cutting back on capex at a time when lithium prices have slumped globally.
Its Pilgangoora mine is the world’s largest, independent hard-rock lithium operation.
The source: ASX announcement
