Pilbara Minerals shares rise as it cuts 50 jobs by turning off one of two lithium processing plants

About 50 jobs will be lost, but 50 others saved, as Pilbara Minerals places part of its processing operations on ice to bunker down for another lithium winter. WA’s biggest pure play lithium miner will put the Ngungaju plant — one of two processing plants at its Pilgangoora mining operations in the Pilbara — into care and maintenance by December 1. The miner will also scale back planned production under a newly-dubbed P850 project, a move that ultimately cuts output by about 100,000 tonnes per annum and reduces its workforce. Works to boost capacity to 1 million tonnes per annum looks set to continue, however. Chief executive Dale Henderson told The West Australian the move to shut Ngungaju will impact approximately 100 roles, but roughly half of those affected will be redeployed to the larger plant — Pilgan. These workers will be tasked with optimising Pilgan, which is already Pilbara’s better performing and lower cost plant. Production guidance for the fiscal year has been pulled back from a 800,000 and 840,000 dry metric tonnes band to between 700kdmt and 740kdmt. The market gave the belt tightening initiatives a thumbs up — shares rose 3.5 per cent by 10.45am — as Pilbara tries to shield itself from the effects of a plummeting lithium price. The quarterly update issued on Wednesday revealed a tonne of its spodumene concentrate had dropped 19 per cent since June, from $US840 to $US682, and shaved 31 per cent off revenue. “The Pilgangoora operation will be managed to optimise the higher performing, lower cost Pilgan plant, while also temporarily placing the Ngungaju plant into care and maintenance, to reduce costs and further strengthen the company’s financial position,” Mr Henderson said in the ASX announcement. “For FY2025, the optimised P850 model will reduce mining activity from seven budgeted mine fleets to four, require a smaller workforce and has the benefit of retaining key employees by redeploying personnel from the Ngungaju plant to the expanded Pilgan plant.” The calls to scale down operations are hoped to free up about $200 million in cash flow. Further construction works into a mid-stream demonstration plant project being built alongside Calix will also be deferred. The plant is backed by the Federal Government, which will put $20 million towards the project as part of its manufacturing initiatives. Mr Henderson said Pilbara was well placed to survive the latest “lithium winter” and had been through worse. “The 2019 lithium winter was like a deep frost or a blizzard, this winter is so far just a bit chilly,” he told The West. In 2019 benchmark spodumene prices plunged below $US500 per tonne, they are currently at about $US750/t.