PLS Group (ASX: PLS) – PLS approves P2000 expansion to 2Mtpa

PLS Group Limited has approved the P2000 Project at its Pilgangoora operation, committing approximately A$1.9 billion in capital to expand spodumene concentrate production to around 2 million tonnes per annum by September 2029. The project generates an incremental post-tax net present value of A$2.7 billion and internal rate of return of 29.5 percent based on management’s long-term lithium price assumption of US$1,620 per tonne for spodumene concentrate. These economics represent a significant value creation step for Pilgangoora, the world’s largest independent hard-rock lithium operation.

The P2000 project reflects material improvements in metallurgical understanding and mining efficiency since the preliminary feasibility study from June 2024. Enhanced processing capability at the new Jimmagunya plant enables economical recovery of approximately 67 million tonnes of mineralised contact material previously classified as waste. The result is a lower life-of-mine strip ratio of 5.6 times compared with 7.7 times in the earlier projection, and average unit operating costs of A$620 per tonne over the first ten years at steady state, down from the prefeasibility range midpoint of A$650 per tonne. PLS expects this larger production base to strengthen Pilgangoora’s global competitive position, particularly important in a cyclical market where production scale and cost position both matter.

Funding rests on PLS’s existing cash balance of A$2.3 billion as at June 2026 and operational cashflows from current production. Management has indicated it will periodically assess debt funding opportunities to support long-term flexibility and future growth options. The company’s capital management framework remains oriented toward facilitating franked dividends where consistent with strategic requirements, subject to board discretion. This approach preserves balance sheet strength while enabling the investment cycle.

Beyond the approved P2000 project, PLS has completed a separate prefeasibility study for underground mining at Pilgangoora. Management indicates that combined open-pit and underground operations could sustain production of approximately 2.2 million tonnes annually over the first ten years, with mine life extended beyond 25 years. This underground opportunity remains contingent on completion of a full feasibility study and a separate future investment decision, creating potential optionality for value creation in a stronger lithium price environment. Benchmark Mineral Intelligence’s long-term forecast of US$2,580 per tonne, significantly above the P2000 base case assumption, illustrates the additional value possible under constructive pricing scenarios.

Investors should monitor execution on the engineering, procurement and construction schedule, tracking whether PLS meets its September 2029 first-production target and the six-month ramp-up to full capacity. Capital expenditure guidance for FY27 onwards will signal progress, as will updates on offtake agreements, regulatory approvals and port infrastructure optimisation. PLS has contracted placement capacity for approximately 50 percent of forecast P2000 volumes in FY30, leaving significant unallocated volume to respond to market dynamics. This announcement is price sensitive and flagged as material by the ASX.

View the full ASX announcement (PDF)

About PLS Group Limited (ASX: PLS)

PLS Group Limited is a global producer of lithium materials that explores, develops, and operates mineral resources with a focus on lithium extraction. The company owns and operates the Pilgangoora lithium mine in Western Australia’s Pilbara region and the Colina Project in Brazil, with spodumene concentrate primarily exported to lithium chemical converters in China. The company is also integrated into the lithium value chain through a joint venture with POSCO in South Korea for battery-grade lithium hydroxide production.

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