PLS boss Dale Henderson says government shouldn’t support ‘wrong’ critical minerals projects with price floors

The boss of the ASX’s largest lithium pure play has warned the Federal Government that taxpayer-funded price floors for critical minerals could prop up low-quality projects. PLS chief executive Dale Henderson made the comments just days after Australia and the US agreed to jointly invest more than $US3 billion ($4.6b) in the production of critical minerals across the two countries, mainly in rare earths. The pact includes the adoption of commodity price floors for certain rare earth elements and potentially for other critical minerals, like lithium, produced by Australian mines. Guaranteed prices the Federal Government will pay for that mining production is tied to plans to create a national stockpile of critical minerals. Mr Henderson said there could be “bad, unintended consequences” if the price floors are not rolled out “the right way”. “I think the scenario people worry about in the space is that a price floor provides artificial support and supports the wrong projects,” he told The West Australian. “The way we think about it is there’s a finite quantum of taxpayer funding that can be employed and what is the best bang for the taxpayer’s buck? “Reducing mining costs is best for long-term viability and competitiveness, and the best role government can play in that is to support through investment in shared infrastructure.” Mr Henderson’s PLS had $852m of cash in the bank at September 30, giving it the financial firepower to potentially expand its lithium empire. Mineral Resources currently has controlling stakes in three lithium mines up for grabs, with the Wodgina mine in the Pilbara about 20km from PLS’ flagship Pilgangoora operation. PLS and MinRes are also set to share new berths and support infrastructure at the nearby Port Hedland port built specifically for handling lithium exports. But Mr Henderson said buying into Wodgina was “not something I’ve thought much about”. “We do have a full plate of growth options both here in WA and in Brazil,” he said. “But if there’s a compelling opportunity that comes along, we’ll of course look into it, but we wouldn’t be looking to grow for growth’s sake.”