Piedmont Lithium (ASX:NASDAQ:PLL, OTC:PLLTL) Inc. set quarterly production records in the second quarter of 2024, the leading North American supplier today revealed in its quarterly report.
Piedmont shipped around 14,000 dry metric tons (dmt) of spodumene concentrate (~5.5% lithium oxide) associated with long-term customer contracts during the June quarter.
Its realised price per ton over the period was $945, compared to $865 per ton in the first quarter of the year. The company notes that downward provisional pricing adjustments associated with spot shipments were included in the realised price per ton in the first quarter, and to a lesser extent in the second quarter.
During the quarter, the North American Lithium (NAL) project in Quebec — North America’s largest operating spodumene mine, jointly owned by Piedmont (25%) and Sayona Mining Ltd (ASX:SYA) (75%) — continued to achieve quarterly production records as the operation reached steady-state production in June 2024.
Positive outlook ahead
For the half year, ending December 31, 2024, Piedmont expects to ship approximately 96,500 dmt of spodumene concentrate, bringing total shipments in 2024 to around 126,000 dmt. The company says the majority of second half 2024 shipments are expected to be long-term customer shipments or spot shipments structured to minimise downside risk.
Piedmont’s achievement of steady-state production at NAL supports the second half shipment guidance.
During the June quarter, NAL produced around 49,700 dmt of spodumene concentrate, up 23% from the prior quarter. Lithium recovery and mill utilisation achieved new quarterly highs of 68% and 83%, respectively.
The crushed ore dome was commissioned in the June quarter and steady-state production is expected to continue during the second half.
Piedmont finished the quarter with $59 million in cash, and expects its capital expenditures and investments to significantly decrease in the current half year.
Consolidated US project development strategy
Piedmont has decided to consolidate its US project development strategy, to deploy capital and technical resources more efficiently and leverage its Carolina Lithium project in North Carolina.
This follows the receipt of a Carolina Lithium state mining permit during the second quarter, and comes in response to changing market conditions.
Under this strategy, Piedmont plans to shift the proposed Tennessee Lithium conversion capacity to Carolina Lithium to include two lithium hydroxide trains constructed in a phased approach. The timing of the phased development will depend on several factors, including prevailing market conditions.
The bulk of previously completed front-end engineering work for the Tennessee Lithium facility will be transferred to Carolina Lithium. The company now has an air permit application under review with North Carolina’s Division of Air Quality that will allow for up to 60,000 tons per year of lithium hydroxide production.
At the company’s Ewoyaa Lithium Project in Ghana, Piedmont has mandated a financial advisor to help secure the company’s share of construction capital. Several funding alternatives are being considered, but its preference is for an offtake-partnering process using a portion of the company’s life-of-mine rights to 50% of Ewoyaa’s spodumene concentrate production. Piedmont is working to complete this process before Ewoyaa’s construction begins, which is awaiting government and regulatory approvals, along with appropriate prevailing market conditions.
Working to ensure a long-term competitive position
Piedmont Lithium (ASX:PLL, OTC:PLLTL) President and CEO Keith Phillips said, “NAL continues to demonstrate its potential as an excellent asset, achieving steady-state production and exhibiting future promise with new, high-grade drill results and the completion of the crushed ore dome.
“In H2’24, we expect to sell the majority of our 2024 NAL offtake, prioritising contract customers and structuring spot shipments to limit our downside exposure. Capital allocations and investments in affiliates are anticipated to be modest given the completion of the NAL ramp-up and expected timing of Ewoyaa development.
“Given the prevailing market realities, we have taken steps to help ensure our long-term competitive position and the preservation of the upside of our assets. These steps include the decision to consolidate our US lithium hydroxide development strategy by moving our planned Tennessee Lithium conversion capacity to Carolina Lithium.
“The receipt of the mining permit in Q2 has made Carolina Lithium the focus of our U.S. development and allowed us to actively engage with potential strategic partners interested in a project-level investment. These conversations, as well as those related to the Ewoyaa offtake-partnering process, have been positive, and we look forward to their continuation.
“However, we are progressing our development of Carolina Lithium on a conservative timeline, monitoring dynamic market conditions, and focusing on strategic partnerships and our funding strategy.
“While lithium prices have remained depressed, we are encouraged by the growth across the electrification sector and the long-term potential of the lithium market. The world continues to move toward electrification, which will require exponentially more lithium than is produced today in the US and globally. Piedmont is well positioned with active production offtake, an effective cost management plan, and a prudent project development and funding strategy, all in alignment with the goal of maintaining long-term shareholder value.”