Calix (ASX:CXL) and Pilbara Minerals (ASX:PLS) are deferring the construction of their Mid-Stream Demonstration Plant due to the current depressed lithium market.
Calix shares slid 27% to an intra-day low of $0.725 following the news.
At the same time, Pilbara Minerals is also suspending operations at one of the two processing plants at its Pilgangoora Mine in the Pilbara region of Western Australia.
The lower capacity Ngungaju plant will be placed on temporary care and maintenance from 1 December 2024.
Pilbara Minerals says current market prices for spodumene concentrate of US$750-800 ($1,144-$1,220) per tonne remain below the industry’s long term sustainable consensus price of US$1,400 per tonne.
The miner was selling its lithium during the September quarter for US$682 per tonne, down from US$840 per tonne in the previous quarter.
Calix and Pilbara Minerals entered into a joint venture agreement in November 2022 to build a demonstration plant at the Pilgangoora Project designed to produce lithium salts via a refining process using Calix’s patented calcination technology.
The technology delivers indirect heating of raw materials to enable efficient, precise, flexible and renewably powered mineral processing and capture of unavoidable industrial emissions.
Calix says the project remains on budget and is 60% complete to the end of September 2024.
CEO Phil Hodgson says the progress achieved so far means the project can rapidly restart and progress to the commissioning stage once conditions allow.
“We will update the market again on the status of the project at our upcoming annual general meeting on 22 November 2024,” he says.
“We stand ready with Pilbara Minerals to demonstrate the exciting potential of electric calcination for lower cost and lower carbon lithium processing for the global lithium industry.”
Pilbara Minerals CEO Dale Henderson says the pause in development enables the joint venture to time expenditure with improved market conditions.
“We remain fully supportive of the midstream strategy and our joint venture, recognising the project’s potential to transform the lithium supply chain through lower emissions and value-added processing,” he says.
“We will assess with Calix resuming the project as soon as market conditions improve or further government support is received.”
Construction works in progress will be completed after which the project will be paused.
Calix and Pilbara Minerals are working with government bodies in relation to further funding options.
The pair are also investigating the potential to scale and deploy the technology at other lithium projects around the world.
Write to Angela East at Mining.com.au
Images: Pilbara Minerals & Calix
