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'Generating massive amounts of cash flow' - Piedmont Lithium's Keith Phillips on critical metals M&A

Kitco News

(Kitco News) - With lithium producers sitting on massive cash piles due to the run up in metal prices, the major industry players have an interesting set of choices, noted Piedmont Lithium's CEO Keith Phillips.

On Monday Phillips spoke to Kitco Mining.

Piedmont Lithium is advancing two lithium projects. In 2021, Piedmont Lithium acquired equity interests in Sayona Mining and a 25% interest in Sayona Quebec, a joint venture between Piedmont and Sayona Mining.

Before mid-decade the company is also expecting production from Africa. Atlantic plans to license and permit Ewoyaa Lithium project this year. Construction should follow. Production of spodumene concentrate is planned to start by the end of 2024.

Piedmont also has added refining capacity coming online in the latter half of the decade with its Tennessee and Carolina projects, which will turn the company from a producer of spodumene concentrate into lithium hydroxide, which commands a higher premium.

"Our whole philosophy is that we want to be a very large producer of lithium hydroxide in North America," said Phillips. "We want to produce it all from spodumene concentrate that we own."

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Phillips said that spodumene concentrate from Quebec and Ghana mines will help fund the construction of refining operations.

With lithium prices up nearly 10-fold since the start of the decades according to the Benchmark Minerals Index, producers are thriving. In a recent production update, Pilbara Minerals said it had a cash balance of $2.22 billion. This week Albemarle said it expects net sales to jump 2.5 times by 2027.

Phillips said current producers are generating massive amounts of cash flow and "...we hope to be a producer very soon."

"Those folks are in a pretty interesting position to decide what to do. They may not have the growth opportunities internally to use that capital. Dividends and share repurchase are interesting, but ultimately driving growth and consolidation would be great for the industry."

EDIT: Piedmont Lithuium's ownership stake with Sayanoa Mining was corrected.

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