The cash build in the December quarter alone was $851.1 million to $2.22 billion. So its cash hoard could stand at something like $4 billion come June 30.
Lithium prices are off by about 15% on their 2022 highs but Pilbara’s spodumene production is rising, and its contract pricing has been reset to capture more of the still seriously elevated lithium chemical pricing.
So the rivers of lithium cash are set to continue to flow throughout the remainder of FY2023 year and more than likely, well beyond, given the prospect of continued elevated lithium pricing in response to long-term supply deficits in the key battery material.
What is Pilbara to do with rivers of lithium cash? First tax payments and dividends are around the corner which will soak up some of the flow.
And then there is the cash call from Pilbara’s organic growth projects which include two production expansions, and a move downstream into lithium hydroxide and (potentially), a game-changing mid-stream lithium salts (35% lithia) business.
It is a full book for sure. But such is the scale of cash coming Pilbara’s way for the foreseeable future, it needs and wants to do more. Enter the merger and acquisition growth option.
M&A has been hinted at by Pilbara in the past, most noticeably in its 2022 September quarterly when it said it was in recruitment mode for an expanded executive team, including a chief development officer.
The M&A growth option goes to Pilbara’s development of a four-leg strategy, the fourth leg of which is diversification beyond its Pilgangoora flagship spodumene (6% lithia) concentrate operation.
