Australian lithium miner Pilbara Minerals posted Thursday an 82% plunge in its net profit during the first half of financial year 2024, but its optimism in the lithium industry seems to be unchanged.

Net profit in the period collapsed to AUD 220 million ($144m), compared to AUD 1.24 billion in H1 FY23. The company attributed the decline to lower realised prices, which dropped 67% in the period, leading to a 65% fall in total revenues.

Pilbara’s spodumene concentrate sold for an average price of $1,645 per dry metric tonne (dmt) cif China, on a 5.3% lithia basis. A year earlier, the average price was $4,993/dmt.

On a 6% lithia equivalent basis, the average estimated sales price in H1 FY24 was $1,880/dmt cif China, down from $5,570/dmt in H1 FY23, Kallanish learns.

Despite lower prices, the miner managed to increase its spodumene concentrate sales volume by 7% to 306,300 t, with production rising 4% to 320,200 t.

“The first half of the financial year represents a strong set of operational outcomes and successful project milestones that continue to advance the company’s growth strategy as an emerging lithium materials leader,” comments ceo Dale Henderson. “Although pricing has reduced significantly from the prior year record highs, the company finds itself in a position of strength. Our balance sheet positions the business to navigate any period of softer pricing and provides a competitive advantage relative to many peers within the sector.”

Pilbara reported a balance sheet with AUD 2.1 billion in cash on 31 December 2023. To preserve that, the company says it has taken “prudent steps” including withholding any interim dividend payment.

Highlighting its low unit-cost structure, Henderson said the company is uniquely placed to better withstand periods of softer pricing whilst continuing to build-out the production base “to capitalise on improved pricing conditions.”

The miner projects a “strong growth” for lithium demand at a compound annual growth rate (CAGR) of 24% in 2023-2028 to 3 million tonnes of lithium carbonate equivalent. The forecast is supported by “global momentum” in government policy, the company says, citing the US, UK, Germany, India, China, South Korea and Japan.

Additionally, Pilbara notes the 31% annual growth in EV sales last year to 13.8m units. Citing third-party data, the company estimates global EV sales to increase to 36.1m units in 2028 and 59.1m units in 2033, which ultimately will boost demand for lithium products.