Australian lithium miner Pilbara Minerals on Wednesday lowered its production guidance for the 2025 financial year, citing current market conditions.

The ASX-listed miner lowered its production guidance to between 700 000 t and 740 000 t at an operating cost of A$620/t to A$640/t.

This compares with the previously guided 800 000 t to 840 000 t at a cost of A$650/t to A$700/t.

The new production outlook follows a decision to place the Ngungaju plant into care and maintenance, as part of the optimisation of the Pilgangoora operation into a single processing plant.

Following the ramp-up of the P1000 project, the Pilgan plant will have a standalone production capacity of 850 000 t/y.

Pilbara explained that the expanded Pilgan plant allowed for optimised processing efficiency and scale benefits, while the Ngungaju plant did not match the scale or processing capability of Pilgan and was thus a higher-cost operation.

The new operating model will result in a cash flow improvement of about A$200-million through reduced operating and corporate costs, as well as reduced capital expenditure.

The Ngungaju plant will be ready to be fully ramped up within four months when market conditions improve.

Pilbara stated that the guidance for 2025 was broadly in line with 2024 production volumes, despite placing the Ngungaju plant into care and maintenance. It also showed lower unit costs relative to 2024 for about the same volume, reflecting the increased production volume capacity and operating efficiency at the Pilgan plant resulting from the expansions.

The miner stated that lithium prices at $750/dry metric tonne (dmt) to $800/dmt remained below the industry’s long-term sustainable consensus price of $1 400/t, highlighting the need for further market rebalancing – through either increased demand or supply curtailments.

Meanwhile, Pilbara reported a strong operational performance in the September quarter, with production of 220 100 dmt of spodumene concentrate. The 3% decrease from the June quarter was anticipated and reflected reduced plant availability resulting from the integration and ramp-up of the P680 crushing and sorting facility.

Quarter-on-quarter prices fell by 19% to A$682/dmt, resulting in revenue falling by 31% to A$210-million in the quarter.