PERTH (miningweekly.com) – Lithium miner Altura Mining has signed an offtake agreement with battery materials producer GFL International for the supply of a minimum of 70 000 t/y of lithium from the recently commissioned Pilgangoora operation, in Western Australia.
The offtake agreement with GFL, which is a subsidiary of Ganfeng Lithium, will start from 2019 and will run until the end of 2021, with potential extensions for up to a further ten years.
The offtake agreement included an $11-million prepayment on the 2019 shipped cargoes, with a minimum price of $550/t based on lithium oxide content on 6% lithium oxide until the end of 2020.
A maximum ceiling price of $950/t will also apply until the end of 2020.
“Ganfeng is one of the largest and most respected lithium companies in the world and an offtake agreement with them is further proof of the quality of the product we are producing for them from the Altura Lithium operations,” said Altura MD James Brown.
Altura has also reached an agreement with existing offtake partner Shaanxi J&R Optimum Energy (JRO), under which JRO will reduce its current offtake from a minimum of 100 000 t/y to a minimum 50 000 t/y from 2019 onwards.
The company said on Friday that this would provide Altura with more flexibility as JRO aimed to conclude its current restructuring. The company would also be provided with an opportunity to expand its existing customer base with the removal of JRO’s rights to additional tonnage produced.
Brown said on Friday that the terms of agreement with GFL mirrored the floor price component of existing offtakes, which provided the company with significant security while the agreed prepayment provides a healthy working capital buffer during the ramp-up phase.
“The revised agreement with JRO together with the broadening of Altura’s customer base with Ganfeng’s commitment significantly addresses any implications to the offtake agreement from JRO’s restructuring activities.
“We are producing a high-grade product that is highly sought after. We continue to field inquiries regarding offtakes which is testament to the quality of the Altura lithium concentrate and evidence there is still strong long-term global demand.”
Altura in July produced its first spodumene from the Pilgangoora mine, which will produce some 220 000 t/y of 6% lithium concentrate when in full production. Spodumene concentrate from the mine will be stockpiled in a purpose-built storage facility in Port Hedland, which has a capacity of 40 000 t, with Altura presently having the rights to 30 000 t.