Australian lithium miners plot expansions after price surge

Australian hard rock lithium producers are gearing up to boost supply as spodumene prices have more than tripled since early December.

On Friday, Australian major PLS Group (ASX: PLS) reported a 57% increase in its average realized price to $1,161 per tonne on a 5.2% spodumene basis, or $1,336/t for 6% spodumene. Prices have continued to rise in January, reaching as high as $2,500/t this week, up from around $600/t in July 2025.

“A combination of factors are supporting this recovery, including constructive policy settings in China, particularly around energy storage deployment and EV adoption, as well as ongoing uncertainty on the supply side, including the timing and extent of potential restarts of high-cost sources,” PLS managing director Dale Henderson said during a conference call.

“Importantly, while we have long held the view that pricing needed to recover from the mid-25 lows, we’re not calling an end to volatility. The market remains sentiment driven, but pricing is continuing to respond sharply to policy signals and supply expectations.”

In mid-January, Australian investment bank Barrenjoey lifted its 2026 spodumene price forecast to $3,250/t, while noting it remained well ahead of consensus estimates.

Restarts under consideration 

PLS’ Pilgangoora operation in Western Australia has capacity to produce up to 1 million tonnes of spodumene, with 2026 financial year guidance of 820,000–870,000 tonnes. The operation’s 200,000t-a-year Ngungaju plant was placed on care and maintenance in December 2024 due to weak market conditions.

PLS confirmed it is considering a restart of Ngungaju amid strong inbound offtake interest and has completed early operational readiness work to enable a potential restart within four months. Henderson said at current prices Ngungaju would generate “very, very strong margins”, though the company would weigh the broader outlook before deciding.

“In terms of all of the indicators I’ve got access to, everything is looking very, very strong on a six- to nine-month basis,” he said. “The further you look out, it gets harder to take a view, but conversations across our customer base, including major chemicals groups, point to a very positive near-term outlook.”

This week, Mineral Resources (ASX: PLS) increased its 2026 financial year lithium guidance for the Wodgina and Mt Marion mines in WA to 450,000–490,000t from 380,000–420,000t and confirmed it is considering a restart of the Bald Hill mine, which was suspended in December 2024.

MinRes chief financial officer Mark Wilson told analysts the company needed to be comfortable with market conditions before proceeding, noting significant work would be required to mobilise the plant and that a restart could take up to four months from a final decision.

Copper producer Develop (ASX: DVP), which owns the Pioneer Dome lithium project in WA, said the re-emergence of the direct ship ore market had created an opportunity. Managing director Bill Beament said the fully permitted project could move into production within six months, with financing under way for the A$35–40 million ($25–28 million) development and offtake discussions progressing.

Longer dated supply

At the longer-dated end of the supply curve, the Greenbushes mine in WA, the world’s largest hard rock lithium operation, processed its first tonnes from the CGP3 expansion just before Christmas, adding 500,000tpa of capacity. IGO (ASX: IGO) managing director Ivan Vella said an optimisation review was under way, including consideration of a potential CGP4 expansion.

Meanwhile, Liontown (ASX: LTR) said it reached an “inflection point” in the ramp-up of its Kathleen Valley underground lithium mine during the December quarter and has begun a study to refresh the economics of a potential expansion to 4 million tonnes per annum, as outlined in its 2021 feasibility study.

Managing director Tony Ottaviano said the company would apply insights from 16 months of operating Kathleen Valley, describing the proposal as a brownfields expansion that would materially reduce execution risk and time to market. While he declined to comment on the sustainability of recent price gains, Ottaviano said customer interest was strong, with enquiries covering all potential expansion tonnes.

PLS is also studying a A$1.2 billion expansion of Pilgangoora to 2Mtpa and its Colina greenfields project in Brazil, with updates expected later this quarter. 

Henderson declined to comment on timing but said both developments were inevitable given projected demand growth.

“As you consider the expected growth rates of demand for the industry and project that forward, you need P2000, you need Colina, and you need more assets to come online to serve that growth demand,” he said.