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Whether it's brine or hard rock, lithium production is challenging - Pilbara Minerals' Dale Henderson

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(Kitco News) - In February, the company’s Managing Director and CEO Dale Henderson was interviewed by mining audiences manager Michael McCrae at the BMO Global Metals, Mining & Critical Minerals Conference.

Pilbara Minerals (ASX: PLS) is a remarkable growth story. The company started building production late last decade, and it has ridden the battery metals boom. The market cap of Pilbara sits between $14 to $15 billion. Pilbara Minerals is an ASX 50 company.

Guidance for 2023 is between 600,000-620,000 dmt of spodumene concentrate. With expansion plans, the company has its eyes on 1 million tonnes per year.

"We're a big producer," said Henderson. "We're approximately nine percent of the lithium supply globally. Strong volume and strong pricing are equal to a really strong balance sheet."

The company has seen significant cash generated from operating activities: $1.8 billion from last year's operations alone, a 1,447% increase over the prior corresponding period.

The company is planning to add more chemical conversion.

"We've always looked to involve ourselves downstream. We think it's a smart thing to do to create more value and extract more margin," said Henderson.

Pilbara Minerals joint ventured with POSCO to build a chemical facility. Commissioning is expected in the latter half of the year. Pilbara's other push is its Mid-Stream joint venture with Calix. Pilbara wants to do more refining at the mine site.

"It upgrades the lithium from 6% to 35%. It drops out the alumina silicate waste. A lot of what we ship to our customers—there's a big component that they don't need."

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A demonstration plant is expected this year.

Henderson expects lithium prices to stay high.

"It's hard not to be positive," said Henderson. "Of course, I would say that, but it's the birth of a new industry, and ultimately the demand it's serving is growing massively."

Henderson said the market will be supplied constrained.

"A lot of supplies got to come online and what we know about lithium supplies, it's very, very hard," said Henderson. "It doesn't matter whether you're doing a hard rock mine like our operation or a brine operation. They're technically very challenging."

Coverage of BMO Global Metals, Mining & Critical Minerals Conference was sponsored by First Majestic Silver.

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