Australian spodumene concentrate producer Pilbara Minerals reported on Thursday a 989% surge in its net profit during the first half of financial year 2023, boosted by higher prices and volumes.

Ceo Dale Henderson said the “exceptional financial result” reflects a record operational performance in the Pilgangoora project, in Western Australia, along with the positive supply and demand dynamics in the lithium market.

Net profit rose to AUD 1.24 billion ($845.38 million) in the period (July-December 2022), which enabled the board to approve Pilbara’s first dividend payment at AUD 0.11/share. Revenue jumped 647% to AUD 2.18 billion, thanks to a 305% boost in the average realised price of its spodumene concentrate.

Pilbara yielded an average of $4,933/dry metric tonne for SC5.4, on a cif China basis, compared to $1,232/dmt in H1 FY22. In terms of volumes, production increased 83% to 309,255 dmt of spodumene concentrate, and shipments rose 68% to 288,876 dmt.

The company said again that by deliberately targeting a lower product grade, it’s been able to optimise product yield and maximise concentrate production. The strategy, coupled with the successful ramp-up of the Ngungaju plant to full capacity, has driven operational growth and higher sales, Kallanish notes.

Henderson says the strong cash generation from the Pilgangoora project has further strengthened the company’s balance sheet, putting it in an “enviable position” with AUD 2.23 billion in the bank as of 31 December. That’s an AUD 1.63 billion increase on the prior corresponding period, he notes.

“The stage is set for Pilbara Minerals to take massive growth steps in the months and years ahead. This is just the beginning,” the ceo concludes.

The Pilgangoora project is one of the few major hard-rock lithium producers globally, operating roughly 580,000 t/y of processing capacity. With a mine life of over 26 years, the Tier-1 asset currently runs two plants and has strong growth potential. Pilbara is already working on different expansion projects to consolidate its position as a leading lithium player.

Production guidance for full FY2023, which ends on 30 June, now stands at 600,000-620,000 dmt at a unit operating cost of $405-430/dmt excluding royalties.