PERTH (miningweekly.com) – Lithium developer Altura Mining has inked its first binding offtake agreement over the Pilgangoora lithium project, with China’s Lionenergy.

The offtake agreement followed an earlier letter of intent under which the Chinese firm agreed to buy between 100 000 t/y and 150 000 t/y of lithium spodumene concentrate from the Pilgangoora project, in Western Australia.

Under the terms of the offtake agreement, Lionenergy would take a minimum of 100 000 t/y of spodumene concentrate for an initial five-year period, with any extensions to this date to be negotiated between the two companies.

The companies would also negotiate any additional offtake tonnage in excess of the 100 000 t/y.

The spodumene concentrate pricing would be based on the prevailing US dollar market price, and would be negotiated between Altura and Lionenergy.

The offtake agreement was based on the start of mining at Pilgangoora within two years of the binding offtake agreement, and Altura obtaining finance for the development of the project within six months of the signing date.

Altura said on Tuesday that the completion of the first offtake agreement was a key de-risking factor and a significant milestone for the company in continuing to progress the Pilgangoora project to production.

“This development is proceeding against a firming fundamental picture for lithium demand and limited sources of near-term concentrate supply as the global economy seeks cleaner forms of energy from a broadening set of applications from lithium ion battery technology,” the company said.

A prefeasibility study estimated that the Pilgangoora project would require a capital investment of A$97.6-million, and would have a net present value of A$277-million and an internal rate of return of 42.5%.

A base-case study of a one-million-tonne-a-year throughput estimated that the Pilgangoora project could deliver about 150 000 t/y of spodumene concentrate over a mine life of 19 years.