Pilbara Minerals Posts 755kt Production, Cuts Unit Costs to $619/t FOB

Robust FY25 Performance Completes Major Expansions

Pilbara Minerals Limited (ASX – PLS) has reported a strong finish to FY25, marked by the completion of its P680 and P1000 expansions at the Pilgangoora lithium operation. The June quarter saw production surge 77% quarter-on-quarter to 221.3kt, driving full-year production to 755kt, comfortably above the top end of market guidance. This volume growth was complemented by a 10% reduction in unit operating costs (FOB) to $619 per tonne in the quarter, reflecting operational efficiencies and the benefits of the new P850 operating model.

Despite a challenging lithium pricing environment, with average realised prices down 43% year-on-year, Pilbara Minerals maintained a solid financial footing. The company ended FY25 with approximately $1.0 billion in cash and an undrawn $625 million credit facility, underscoring a resilient balance sheet even after investing $653 million in capital expenditure primarily related to the expansions.

Strategic Diversification and Growth Optionality

Beyond Pilgangoora, Pilbara Minerals continues to diversify its portfolio and build optionality. The company holds an 18% stake in the POSCO Pilbara Lithium Solution (P-PLS) joint venture in South Korea, which produced certified battery-grade lithium hydroxide during the quarter. Pilbara Minerals contributed around $40 million in equity to the JV in FY25, signaling commitment to midstream processing capabilities outside China.

Exploration and development at the 100%-owned Colina Project in Brazil also progressed, with targeted drilling and studies underway to expand the mineral resource. While development timing remains contingent on market conditions and study outcomes expected in mid-2026, this project adds a valuable growth avenue aligned with Pilbara’s strategy to strengthen ex-China supply chains.

FY26 Guidance Focuses on Efficiency and Cost Control

Looking ahead, Pilbara Minerals has set FY26 production guidance between 820kt and 870kt, with unit operating costs forecast to fall further to between $560 and $600 per tonne FOB. Capital expenditure is expected to moderate significantly to $300–330 million, reflecting a disciplined approach following the completion of major expansions.

The company plans to leverage its ore sorting technology to increase the use of lower-grade contact ore, aiming to reduce mining costs and improve mineral resource utilisation. While this approach may slightly reduce lithium recovery rates, ongoing optimisation efforts seek to offset this impact.

Navigating a Volatile Lithium Market

Market conditions remain volatile, with lithium prices experiencing sharp fluctuations driven by supply chain dynamics and regulatory reviews in China. Pilbara Minerals acknowledges the pricing pressures but remains confident in the long-term structural growth of lithium demand, underpinned by the global energy transition and electric vehicle adoption.

Cost reduction initiatives, including the Cost Smart program launched in FY25, are embedded in the company’s operations to sustain competitiveness. Pilbara Minerals’ strong balance sheet and strategic positioning in established and emerging lithium supply chains provide a solid platform to navigate ongoing market uncertainties.