Insights

Is the Pilbara Minerals value-add lithium strategy worth its salt?

Pilbara Minerals updated investors on Friday on its progress in developing new lithium products for the future.
The post Is the Pilbara Minerals value-add lithium strategy worth its salt? appeared first on The Motley Fool Australia. –

Pilbara Minerals Ltd (ASX: PLS) outlined its strategy to profit from the entire lithium supply chain in an on-site presentation at its 100%-owned Pilgangoora Project in Western Australia on Friday.

In its presentation, Pilbara Minerals said it was “positioning to capture value throughout the entire lithium raw material and chemical supply chain”.

The company has a strategic plan to become a “fully integrated battery grade lithium hydroxide producer”.

Tesla Inc (NASDAQ: TSLA) CEO and electric vehicles pioneer Elon Musk recently described lithium processing as “a licence to print money” with “software margins”.

At market close, the Pilbara Minerals share price finished up 1.47% to $2.77 today.

What’s the plan?

Pilbara Minerals told investors today that it saw three components to the lithium supply chain.

The upstream component refers to the spodumene concentrate Pilbara already extracts from the ground. The current process is “carbon intensive”, with only 5% to 6% lithium oxide in the raw course material dug out of the dirt. More than 90% of the export mass shipped to customers contains aluminosilicates.

The proposed midstream component would reduce the carbon intensity and completely remove the aluminosilicates. The refining process would create lithium salts with 35%-plus lithium oxide. The aluminosilicates would remain on-site at the mine.

The proposed downstream component involves further refining to create lithium fine chemicals.

Developments send share price higher

Investors appear to be excited about Pilbara Minerals plans for expansion along the full lithium supply chain.

In the June quarter, Pilbara signed a binding memorandum of understanding with Australian technology company Calix Ltd (ASX: CXL) for a joint venture relating to the midstream process.

The JV involves the development of a demonstration plant and potential future commercialisation of Calix refining technology at Pilgangoora.

The Federal Government awarded a $20 million Modern Manufacturing Initiative Grant to help fund the project. Investors gave the Pilbara Minerals share price a 5% boost on the day of the announcement.

Pilbara Minerals is working on the downstream component through a joint venture with South Korean company POSCO.

In the June quarter, detailed engineering, procurement, site preparation and road works began on constructing a 43,000tpa LHM primary lithium hydroxide chemical processing facility in Gwangyang.

Investors reacted positively to the JV announcement on 26 October 2021. They sent Pilbara Minerals shares 8% northwards on the day.

In addition, the Pilbara Minerals share price surged 6% yesterday. This was on the back of a 50% boost to production, as outlined in the company’s June quarterly activities report.

Pilbara Minerals share price snapshot

Pilbara Minerals is a leading ASX lithium share whose share price has exploded 736% over two years.

Its Pilgangoora operation is the world’s largest independent hard-rock lithium mine. Two processing plants on-site — Pilgan and Ngungaju — produce spodumene and tantalite concentrate.

The post Is the Pilbara Minerals value-add lithium strategy worth its salt? appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.* Scott just revealed what he believes could be the “five best ASX stocks” for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now

See The 5 Stocks
*Returns as of July 7 2022

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

Here are the 3 most heavily traded ASX 200 shares on Friday
Pilbara Minerals share price lifts amid 50% quarterly production boost
Here are the 3 most traded ASX 200 shares on Thursday
Broker gives its verdict on the Pilbara Minerals share price
Here are the 3 most heavily traded ASX 200 shares on Tuesday

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Rebate Rewards

Level 2 Rebate

Deposit $2,000 and get $200 Rebate
$ 200 Rebate
  • 3 Simple Steps
  • 1. Register Using The Link Below (Promo-Code: WEBREBATE)
  • 2. Deposit $2,000 and place one trade at any non-Austalian market within 30 calendar days
  • 3. Receive Your $200 Rebate
Popular

Level 1 Rebate

Deposit $1,000 and get $100 Rebate
$ 100 Rebate
  • 3 Simple Steps
  • 1. Register Using The Link Below (Promo-Code: WEBREBATE)
  • 2. Deposit $1,000 and place one trade at any non-Austalian market within 30 calendar days
  • 3. Receive Your $100 Rebate

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex Securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

EASY QUALIFICATION & LOW ENTRY
NEW CLIENT REBATE OFFER
EARN UP TO $200 CASH REBATE
Act Fast - Promotion Ends In
Click Here To Get Started
EASY QUALIFICATION & LOW ENTRY
NEW CLIENT REBATE OFFER
EARN UP TO $200 CASH REBATE
Act Fast - Promotion Ends In
Click Here For More Info