Pilbara Minerals in very early stages of considering M&A

Pilbara Minerals’ Pilgangoora lithium tantalum mine. Credit: Pilbara Minerals

Australia’s Pilbara Minerals is in the very early stages of considering what acquisitions it may make as part of its growth strategy, its chief executive Dale Henderson said on Thursday.

The country’s biggest independent lithium producer has its hands full boosting output of spodumene, or lithium ore, this year, while its lithium hydroxide plant with South Korea’s Posco in Gwangyang ramps up.

But it has recently hired banker John Stanning, formerly of Macquarie, as chief development officer to help it decide what comes next in terms of potential acquisitions. That could include overseas firms in battery metals beyond lithium, Henderson told reporters.

Since lithium is a key auto battery component, the industry has boomed as demand has surged from the rapidly expanding global electric vehicle sector. A worldwide shortage of the metal is set to worsen over the coming decade, with Western countries racing to bring on mines to compete with China.

Speculation has grown that Canada’s Patriot Battery Metals may be an acquisition target since the Australian Financial Review reported Australian lithium producer Min Res was building a stake in the lithium explorer.

Patriot, which did not immediately respond to a request for comment, appointed former Pilbara Minerals Chief Executive Ken Brinsden as non executive chairman and director in August.

“We are very early on in our thinking on any non-organic growth. There are no decisions in that regard as it relates to PMET,” Henderson said.

“My assessment from a long way away is, ‘Gee, looks like there could be potential in their asset’,” he said.

In the meantime, Pilbara is set to decide in the quarter through June whether it will move ahead with plans to build a processing plant to turn its lithium ore into a lithium phosphate salt using renewable energy.

That would bring lithium content to 35%-36%, up from 6%, allowing the miner to get better prices as well as cutting freight costs and carbon emissions.

It would be a nice fit for lithium iron phosphate battery (LFP) producers, which is becoming a more popular type of electric vehicle chemistry, but could equally be used in other battery chemistries with a phosphate by-product, Henderson said.

This year, Pilbara may have a small volume of spodumene that has not already been promised to other customers available for sale.

Tonnage from operations formerly run by Altura, which it took over in 2020, could be sold to a single buyer as a “mini offtake”, or it could be sold via the company’s Battery Material Exchange.

“There’s something less than 200,000 tonnes over the next 12 months and less than that moving forward,” Henderson said.

The tonnage is in addition to shipments that Australia’s largest independent lithium miner has already contracted to customers that include China’s Ganfeng Lithium, General Lithium Corp and Great Wall Motor Co.

“There’s any number of interested parties ranging from car companies, battery companies, established chemical converters, new chemical converters in new domiciles,” Henderson said, listing potential buyers of any available lithium ore.

(By Melanie Burton; Editing by Tom Hogue and Kenneth Maxwell)


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