The Pilbara Minerals Ltd (ASX: PLS) share price is up by 2.14% to $1.91 in early trading on Thursday.
This follows a positive announcement from the company that commissioning has begun at its Ngungaju plant.
What did Pilbara Minerals announce?
The Pilbara Minerals share price is on the move following news that commissioning is now underway at the company's Ngungaju Plant. This heralds the start of a staged ramp-up of this facility from care and maintenance.
Pilbara Minerals announced the acquisition of the Altura Mining Limited (ASX: AJM) project in October last year for $175 million. The company then renamed the project Ngungaju.
The transaction occurred when lithium prices were at multi-year lows, resulting in Altura falling into administration.
In late June, the company announced its final investment decision to restart Ngungaju operations.
Since then, the company has successfully completed its construction and maintenance acceleration program to bring forward additional production to capitalise on the lithium boom.
Commissioning of the coarse production circuit is now underway. Pilbara Minerals expects production to increase to approximately 180,000 to 200,000 dry metric tonnes (dmt) from mid-2022 onward.
It is understood that additional production from Ngungaju will allow for sales in the emerging spot market for spodumene concentrate.
This will include sales made through the company's own recently launched Battery Materials Exchange digital sales platform.
In addition, Pilbara Minerals also reaffirmed its FY22 production guidance across the entire Pilgangoora Project at 460,000 to 510,000 dmt.
Management commentary
Pilbara Minerals' CEO Ken Brinsden said the commencement of commissioning as part of the staged ramp-up at Ngungaju represents "another significant and exciting milestone in the rapid growth of the Pilgangoora Project".
Brinsden said:
"Together with the improvement works being made to the Pilgan Plant (which are expected to soon increase production capacity from ~330ktpa to 360-380ktpa), Pilbara Minerals is firmly on track to achieve its goal of increasing annual spodumene concentrate production to 560-580,000tpa by the middle of next year."
"With market conditions remaining extremely buoyant and the spodumene concentrate market continuing to show signs of being extremely short of supply, the Ngungaju Plant is expected to be capable of delivering uncommitted tonnes into the emerging spot market including through our BMX platform.
Pilbara Minerals share price snapshot
The Pilbara Minerals share price has lost steam in recent months, down almost 25% since mid-September.
It is currently lingering around 2-month lows, broadly in line with the S&P/ASX 200 Index (ASX: XJO).
