Pilbara eyes low-cost lithium with Latin Resources project in Brazil

Latin Resources

11/09/2024 21:20

By Marta Nogueira
       BELO HORIZONTE, Brazil, Sep 11 (Reuters) - Australian
lithium miner Pilbara Minerals  PLS.AX  expects the planned
Salinas Lithium Project in Brazil, which it is taking over
through its acquisition of Latin Resources, to become a low cost
operation able to withstand low price cycles, CEO Dale Henderson
said on Wednesday.
    Pilbara said last month it would acquire smaller peer Latin
Resources  LRS.AX  in an all-share deal for an implied value of
A$559.9 million ($373 million). The deal is expected to close
around the end of the year.
    Latin Resources had set out plans to start production at
Salinas, in the southeastern state of Minas Gerais, in 2026.
    Henderson said for the moment, those plans were not being
adjusted, with Pilbara still focused on finishing the
acquisition. 
    "Could there be changes? It's possible, but right now that's
not the focus," he told a press conference at a mining industry
conference.
    He added that the company took lower lithium prices into
account, but saw other important factors in the Latin Resources
acquisition.
    "The quality of the Salinas project that Latin Resources has
developed is very high quality and we think it will be a very
low cost operation once fully developed," he said. 
    "Inevitable price cycles, it will be able to navigate those,
we think with ease."
    Henderson said he expects prices for spodumene concentrate,
a type of lithium from hard rock, to more than double in the
long-term to about $1,500 per metric ton from about $700
currently.
    Asked if the company would consider more acquisitions in
Brazil, Henderson said Pilbara is focused on the current deal,
but did not rule out future transactions.
    "We think in time there will be opportunity (for
acquisitions)," he said.
    Salinas has the potential to become one of the 10 largest
hard rock lithium projects in the world in terms of production,
according to Henderson.    
    "Part of the attraction to come to Brazil and the region is
... because we think it's the start of what could be a fantastic
and potentially leading region in lithium," Henderson said.
    
($1 = 1.5011 Australian dollars)

 (Reporting by Marta Nogueira in Belo Horizonte; Writing by
Andre Romani and Daina Beth Solomon
Editing by Marguerita Choy)
 ((Marta.Nogueira@thomsonreuters.com;))