The Australian hard rock lithium sector is preparing for a period of significantly higher prices. Since the beginning of December, the spodumene price – spodumene is the world’s most common lithium-containing ore – has more than tripled according to market information, reigniting the discussion about additional supply volumes. Several producers in Australia are considering restarting closed plants or expanding capacities. The focus is on Pilbara Minerals, which reported noticeably rising real prices on Friday and at the same time held out the prospect of a return to higher delivery volumes.
Pilbara Minerals (WKN A0YGCV) reported for the most recent period an increase in the average realized price of 57% to US$1,161 per tonne based on 5.2% spodumene. Converted to the more common 6% concentrate, this corresponds to US$1,336 per tonne. According to the report, the upward trend continued in January: Prices of up to US$2,500 per tonne were mentioned this week – after around US$600 in July 2025. This is a significant movement for the market because it changes the calculation basis of numerous projects in a short time.
As reasons for the recovery, the management of Pilbara Minerals cited a combination of supportive political framework conditions in China – especially regarding the expansion of energy storage and the spread of electric vehicles – as well as ongoing uncertainty on the supply side. This includes the timing and extent of possible restarts at higher-cost-intensive sources. At the same time, Pilbara Minerals CEO Dale Henderson emphasized that the price increase does not automatically bring calm to the market: The environment remains sentiment-driven, and pricing continues to react sensitively to political signals and expectations regarding supply development.
Pilbara Minerals and Ngungaju: Restart option within four months
Operationally, Pilbara Minerals revolves a lot around the Pilgangoora project in Western Australia. The plant has a capacity of up to 1 million tonnes of spodumene. For the 2026 financial year, the company forecasts a production range of 820,000 to 870,000 tonnes. However, part of the capacity was withdrawn during the weak phase of the market: The Ngungaju plant with an annual capacity of 200,000 tonnes was put into maintenance mode in December 2024.
Now Pilbara Minerals confirms that a restart of Ngungaju is being examined. The trigger is strong, concrete purchase impulses from potential customers. In addition, the company has completed initial measures for operational readiness in order to enable a recommissioning within four months in principle. Henderson explained that Ngungaju would generate “very, very strong margins” at current prices – at the same time, Pilbara Minerals wants to weigh up further market developments before making a final decision.
The management’s statements make it clear how strongly the market is currently characterized by visibility: For a period of six to nine months, Henderson sees the indicators as “very, very strong.” The assessment becomes more difficult further into the future. However, discussions with customers – including large chemical companies – indicated robust short-term demand. This situation is crucial for Pilbara Minerals because a restart can be possible relatively quickly, but the decision still entails investments, personnel planning and delivery obligations.
Other suppliers in Western Australia increase planning – from Bald Hill to Pioneer Dome
Not only Pilbara Minerals is reacting to the price jump. Mineral Resources (WKN A0J36A) also adjusted its lithium forecast for the 2026 financial year this week. For the Wodgina and Mt Marion mines in Western Australia, the production range was increased to 450,000 to 490,000 tonnes – previously, the figures were 380,000 to 420,000 tonnes. The company also confirmed that a restart of the Bald Hill mine is being considered, the operation of which was suspended in December 2024.
The CFO of MinRes, Mark Wilson, emphasized the test character: One must be sure with a view to the market conditions before a restart is approved. In addition, “significant work” is necessary to restart the plant. Here, too, a time horizon of up to four months from the final decision is mentioned – a detail that shows how quickly additional quantities can be activated in principle, but not overnight.
Develop, a copper producer that owns the Pioneer Dome lithium project in Western Australia, is pursuing a different approach. The company sees a new opportunity in the return of a Direct-Ship-Ore market. Managing Director Bill Beament explained that the fully approved project could go into production within six months. At the same time, financing work is underway for a development in the amount of 35 to 40 million Australian dollars (25 to 28 million US dollars), and off-take talks are also being pushed forward. This brings into focus a scenario in which even smaller or previously undeveloped projects could enter the supply chain faster than expected – provided that financing and sales are in place.
Long-term lithium capacities: Greenbushes, Kathleen Valley and Pilgangoora expansion
While short-term restarts represent the rapid supply response, something is also moving at the long end of the curve. In Greenbushes – the largest hard rock lithium mine in the world in Western Australia – the first tonnes from the CGP3 expansion were processed shortly before Christmas. This increases the capacity by 500,000 tonnes per year. IGO CEO Ivan Vella said that an optimization review is currently underway, which also takes into account a possible CGP4 expansion.
Meanwhile, Liontown reported that a “turning point” had been reached in the ramp-up of the underground Kathleen Valley lithium mine in the December quarter. The company has launched a study to update the economics of a potential expansion to 4 million tonnes per year – an order of magnitude that was already outlined in the 2021 feasibility study. Managing Director Tony Ottaviano explained that Liontown wants to use findings from 16 months of operation. He described the project as a brownfield expansion that could reduce execution risks and time to market. He avoided making statements on the sustainability of the recent price jumps, but referred to strong customer interest and inquiries that would potentially cover all additional expansion tonnes.
According to the report, Pilbara Minerals itself is also working on longer-term options: The company is investigating a 1.2 billion Australian dollar expansion of Pilgangoora to 2 million tonnes per year as well as the Greenfield project Colina in Brazil. Updates on this are expected this quarter. Henderson did not want to comment on the timing, but explained that both developments were “inevitable” in view of the expected demand growth. From his point of view, the market needs additional projects such as “P2000” (the Pilgangoora expansion), Colina and other assets in order to be able to serve the projected growth in lithium demand.
The bottom line is that the current spodumene rally shows how quickly supply planning can turn in a sentiment-driven market. For Pilbara Minerals and other lithium producers in Western Australia, the question now is which capacities will be reactivated in the short term, which projects will be financed and implemented in the medium term – and how strongly prices will continue to be based on political signals, China demand and expectations for the return of higher-cost-intensive sources.
