Pilbara Minerals Faces $196M Loss as Lithium Prices Plunge, Yet Holds Strong Cash

Operational Resilience Amid Price Pressure

Pilbara Minerals Limited (ASX – PLS) has delivered a mixed FY25 financial report, showcasing operational growth alongside significant market headwinds. The company increased its spodumene concentrate production by 4% to 754.6 thousand tonnes and boosted sales volumes by 7% to 760.1 thousand tonnes. However, these gains were overshadowed by a steep 43% decline in average realised lithium prices, which drove revenue down 39% to $769 million.

Despite the challenging pricing environment, Pilbara Minerals maintained a positive underlying EBITDA of $97 million, albeit an 83% drop from the previous year. This resilience was underpinned by disciplined cost management and operational efficiencies introduced through the P850 operating model, which helped reduce unit operating costs and improve cash flow.

Financial Impact and Strategic Investments

The company reported a statutory loss after tax of $196 million, reflecting not only the lower lithium prices but also higher depreciation expenses from recent asset expansions, construction costs related to the Mid-Stream Demonstration Plant Project, and non-cash losses from its equity investment in the POSCO Pilbara Lithium Solution joint venture (P-PLS). The joint venture contributed a $47 million share of net loss, while a $40 million non-cash reduction in the carrying value of a call option further impacted finance costs.

Capital expenditure remained high at $653 million on a cash basis, primarily driven by the completion of the P680 and P1000 expansions at the Pilgangoora Operation, which now forms a leading processing platform with integrated ore sorting technology. The company also completed the acquisition of the Colina Lithium Project in Brazil, marking its first international asset and expanding its growth portfolio.

Balance Sheet Strength and Future Outlook

Despite the financial pressures, Pilbara Minerals closed FY25 with a strong balance sheet, holding approximately $1.0 billion in cash and $1.6 billion in total liquidity, including undrawn loan facilities of $625 million. The company’s focus on capital discipline and cost reduction programs has delivered an estimated net cash flow improvement of around $230 million during the year.

Managing Director and CEO Dale Henderson highlighted the company’s strategic agility and operational excellence as key to navigating the current market volatility. He emphasized that while lithium prices remain subdued, the long-term fundamentals for the sector are intact, with current prices unlikely to incentivize new supply, potentially leading to tighter markets ahead.

Looking forward, Pilbara Minerals plans to intensify its Cost Smart program in FY26, targeting further cost reductions and embedding continuous improvement across operations. The company also maintains flexibility with the Ngungaju Plant kept in a state of readiness for potential restart, positioning itself to respond swiftly to any market recovery.

Sustainability and Safety Progress

On the sustainability front, Pilbara Minerals reported a 7.1% absolute reduction in scope 1 and 2 greenhouse gas emissions, driven by the first stage of its Pilgangoora Power Strategy. Safety metrics improved with a Total Recordable Injury Frequency Rate (TRIFR) of 2.79, reflecting ongoing commitment to workplace safety. The company also increased community investment, particularly supporting Aboriginal and Torres Strait Islander businesses.

Notably, the Board did not declare a final dividend for FY25, prioritizing balance sheet strength amid the volatile market environment.