Pilbara Minerals CEO: Beware the short squeeze, prices can turn quickly

The massive fall in lithium prices is one of the biggest market stories over the last 18 months. The year-and-a-half prior was all about the massive rise in the commodity’s price – so goes the commodity price cycle.

Pilbara Minerals has fared far better than many through this “doldrums” stage of the cycle. It continues to ramp up production at its flagship Pilgangoora project, so far delivering its P680 and P1000 initiatives on schedule - and incredibly in the current inflationary environment, on budget. They remain profitable at current lithium prices, albeit at a fraction of the peak. They’re holding a handy $1.8 billion net cash buffer.

If I could summarise CEO Dale Henderson’s attitude to the current environment, it would be: We’re going to be the best at the stuff we can control and not get distracted by the stuff we can’t.

Henderson appears intent on driving forward the company’s expansion plans, despite the current low-price environment, in the most efficient manner possible. The aim is to be in a strong position when the lithium price cycle eventually turns. 

"We have the playbook, it's not our first rodeo," he notes.

Henderson also addresses the issue of short sellers, for the first time in any interview I’ve seen him give, musing about a possible “short squeeze” in Pilbara shares. 

“Prices can turn very quickly...don't bet against Pilbara,” he warns.

He also discusses Pilbara’s strategy on acquisitions, how he intends to manage the company through the current lithium price volatility and delves into the controversial issue of unconventional lithium supply, particularly what’s coming from low-cost producers in China.

Time codes

• 0:00 - Intro
• 0:20 - First-half results overview
• 1:30 - Current lithium price environment, how will Pilbara manage volatility?
• 3:00 - Pilbara Minerals' diversification strategy
• 4:30 - Is Pilbara Minerals looking to make any acquisitions?
• 6:00 - What is Mr. Henderson's position on short sellers?
• 7:50 - Top questions from the Pilbara Fanatics! 1. When is the dividend returning?
• 10:00 - What lithium price would negatively impact the ramp-up of Pilgangoora?
• 12:15 - What's Pilbara's view on low-cost Chinese lepidolite production and alternative battery chemistries?