Profit and loss in the Pilbara

This solid miner is up against strong offshore headwinds.

- STORY GAURAV SODHI

Everyone knows gold, defence and AI stocks have all been soaring this year. To that list of tearaways, add Pilbara Minerals, whose stock price is up 42% so far this year as lithium prices staged a modest recovery.

Spodumene concentrate prices are up about 10% this year, which sounds modest but it’s enough to coax lithium miners back to life. Mineral Resources has more than doubled off its lows and Pilbara - now officially known as PLS - has about tripled. That takes the share price back to where it was when we cautiously upgraded the stock back in November 2023 when the price was $3.47.

The case was easy to make. Pilbara had used luck, skill and story to build one of the best lithium mines in the world. Early production struggled with low recoveries, grinding problems, iron incursions and plant stability issues. These problems impacted output, costs and required frustrating technical fixes and additional capital. Pilbara diligently did the work of fixing problems as they were found, aided by decent commodity prices.

It mastered operating complexities, fortified its balance sheet and showed patience and aggression when required. The business had all the hallmarks of a high-quality miner sitting atop an outstanding asset.