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Ground Breakers: Pilbara Minerals lifted its gross margin by more than 1800% last year
Mining
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- Pilbara Minerals announces a $561.8m full year net profit after tax
- Lithium deficit by 2040 equivalent to 18 Pilgangooras, PLS says
- Alumina posting a 128% net profit increase to $168m for the half year, announces 4.2c per share dividend
The important large cap ASX mining news for Tuesday, August 23.
The poster child for lithium super profits, Pilbara Minerals (ASX:PLS), has today announced a $561.8m full year NPAT.
Manic demand for Aussie spodumene saw selling prices increase to an average of $US2,382/t in FY22, PLS says.
(Spot prices are even higher, with the company’s latest Battery Materials Exchange auction pulling US$6,350/t for a 5.5% Li2O spodumene concentrate.)
That’s a gross margin of $853.5m from the sale of 361,035t, up from just $46.2m in FY21 (281,440t) and $11.9m (116,256t) in FY20.
It finished the year with a net cash position of $714.3m.
Insane. How quickly things change in lithium land.
The former Altura operation, now called Ngungaju, is on-track to achieve nameplate production capacity of ~180,000-200,000tpa during the September Quarter.
This will boost combined annual production capacity across the Pilgangoora operation from both plants to ~540,000-580,000tpa of spodumene concentrate, the company says.
PLS recent approved an expansion to 640,000t-680,000t, ahead of a potential move to 1 million tonnes per annum.
“The business is in an enviable position, supplying product into a burgeoning growth market with a clear pathway for further production growth off a performing operating base,” MD Dale Henderson says.
“Further, chemicals participation with our downstream JV with POSCO and our midstream project provides another extension of value creation for our shareholders.
“A very exciting future lies ahead for our business and our shareholders.”
Exciting indeed.
The $9.75 billion stock was up ~3.5% in early trade.
READ: Demand destruction for lithium? Not until people stop buying EVs, Pilbara Minerals says
Alumina boosts interim divvy by 24% as profits go sky high
Alumina (ASX:AWC) share price is flat today, despite the company posting a 128% net profit increase to $168m for the half year.
Healthy alumina prices more than accounted for global cost pressures, says the company, will which distribute a higher interim dividend of 4.2c per share (up 24% on last year).
Rising aluminium prices and supply disruptions are putting a rocket up alumina in 2022.
In the first half alumina production outside China decreased, reflecting the supply disruptions in Europe and Australia.
With on-going high energy costs in Europe, more curtailment is possible in the second half of 2022, AWC says.
Major project developments and restarts have also been delayed.
Outside China, metallurgical alumina production is expected to drop by 3% in 2022 compared to 2021.
The extra 11Mt of Chinese production won’t be much help to the ROW either, with its capacity “expected to only produce alumina to meet its internal demand and export demand to Russia”, AWC says.
The medium-term outlook is also positive, the company says, as aluminium becomes even more critical in the transition to a lower carbon economy.
Over the next five years, the expected and potential increase in primary aluminium production is 5.9 million tonnes per annum, outside China, due to industrial growth and a decarbonising world.
This would require around 11 million tonnes per annum of extra alumina, AWC says.
Only 3 million tpa of additional alumina production is currently committed outside China in the next few years.
“As a significant participant in the aluminium supply chain, AWAC and Alumina are well placed to benefit from this growth,” it says.
READ: Why alumina supplies will struggle to meet demand from decarbonisation
The $4.35bn market cap stock is down 23% year to date.
