PLS Group reported a robust December quarter with higher sales and revenue, while evaluating a potential restart of its Ngungaju processing plant. The company reaffirmed FY26 guidance amid improving lithium market conditions.
- December quarter spodumene sales up 8% to 232kt at US$1,161/t
- Revenue surged 49% to A$373 million driven by pricing and volume
- Unit operating costs rose 8% FOB to A$585/t due to lower production
- Ngungaju plant restart under review with Board decision expected March
- Downstream JV with POSCO idled amid Korean battery market disruption
Solid Operational Performance
PLS Group delivered a solid operational quarter ending December 2025, producing 208,000 tonnes of spodumene concentrate and achieving sales of 232,000 tonnes, an 8% increase from the prior quarter. The average realised price for the concentrate rose sharply to US$1,161 per tonne on a ~SC5.2 basis, reflecting a 59% increase on an SC6 equivalent basis. This pricing strength, combined with higher sales volumes, propelled revenue up 49% to A$373 million.
Despite these gains, unit operating costs on a free-on-board (FOB) basis increased by 8% to A$585 per tonne, primarily due to lower production volumes and inventory drawdown as sales outpaced output. The company maintained lithium recovery rates at a healthy 76%, even while increasing contact ore throughput to optimise ore sorter performance.
Strategic Growth and Plant Restart Considerations
PLS is actively assessing the potential restart of its Ngungaju processing plant, which has a capacity of approximately 200,000 tonnes per annum. Early operational readiness works, including a crusher upgrade, have been completed, positioning the plant for a possible restart within four months of a Board decision expected in the March quarter. This move is driven by the recent surge in spodumene prices and improving market fundamentals.
Alongside Ngungaju, feasibility studies for the P2000 expansion project; aimed at doubling Pilgangoora’s production capacity; and the Colina lithium project in Brazil continue to progress. Updates on these studies are also anticipated in the coming quarter, underscoring PLS’s cautious but opportunistic approach to growth amid volatile market conditions.
Downstream Challenges and Financial Strength
PLS’s downstream joint venture with POSCO in South Korea, which produces battery-grade lithium hydroxide, faced significant market disruption during the quarter. Changes in US electric vehicle subsidy policies led to order deferrals and cancellations, prompting the JV to idle its facility temporarily. Despite this, PLS retains strategic optionality with call and put options to adjust its ownership stake, reflecting prudent capital management.
Financially, PLS remains robust with a cash balance of A$954 million, up 12% quarter-on-quarter, supported by strong operational cash flow and a positive provisional pricing adjustment of around A$85 million expected in the next quarter. The company reaffirmed its FY26 guidance, signalling confidence in its cost control measures and market positioning.
Outlook and Market Positioning
PLS’s deliberate strategy through the lithium market downcycle; focusing on operational efficiency, cost discipline, and balance sheet strength; has positioned it well to capitalise on improving market conditions. The company’s portfolio flexibility, including potential plant restarts and expansion projects, alongside its exposure to downstream lithium chemicals markets, offers multiple avenues for growth as global demand for battery materials evolves.
Bottom Line?
PLS’s upcoming decisions on plant restarts and expansion studies will be pivotal as it navigates a recovering lithium market and downstream uncertainties.
Questions in the middle?
- Will PLS proceed with the Ngungaju plant restart in the March quarter?
- How will ongoing Korean battery market disruptions impact PLS’s downstream JV performance?
- What are the updated timelines and capital requirements for the P2000 and Colina projects?