Pilbara Minerals on the lookout for deals

PERTH: Pilbara Minerals Ltd, one of the world’s top lithium miners is on the hunt for acquisitions after producing a record quantity of the battery metal in the June quarter.

The company had “started to run the ruler” over potential acquisitions and was “in pretty good stead” to fund deals both from its balance sheet and through capital raising, managing director Dale Henderson said in an interview on Tuesday.

“There is opportunity for consolidation” in the sector, which is dominated by small and medium producers,” Henderson said. More mergers and acquisitions among the dominant medium-sized players – such as the proposed deal between Allkem Ltd and Livent Corp – were “more probable than not.”

The Perth-based company’s preference was for hard-rock rather than brine projects in stable jurisdictions like Australia, he said, adding Pilbara Minerals hadn’t itself been the subject of any takeover offers.

Lithium is one of the key metals used in electric-vehicle batteries, and demand has soared as carmakers rush to switch from petrol to battery-powered car production.

Few of the big, diversified miners are involved in the rapidly growing lithium sector, leaving it to smaller companies like Pilbara Minerals – which has a market capitalisation of A$14.5bil (US$9.8bil or RM44.69bil) – to boost supply.

Lithium rose to records last year, but this year prices have softened.

Pilbara Minerals reported late Monday average prices for its spodumene concentrate – the lithium-bearing product it produces in Western Australia – fell 33% in the three months to June 30 to A$3,256 (RM10,042) per tonne.

That was worse than the market expected, Henderson said.

Still, Pilbara Minerals’ spodumene production rose 10% from the previous quarter to 163,000 tonnes, and it said it’s on track to almost double annual production by 2025. — Bloomberg