Galaxy completes offtake agreement
PERTH (miningweekly.com) – Lithium miner Galaxy Resources has inked a three-year spodumene concentrate offtake agreement with China’s Sichuan Chengtun Lithium Company, a wholly owned subsidiary of Chengxin Lithium Group.
Chengzin has agreed to purchase some 60 000 t/y of spodumene concentrate from the Mt Cattlin operation, in Western Australia for 2021, 2022 and 2023, with the pricing of the shipments based on spot cargo prices for 2021 and moving to a market-based pricing formula for the remaining two years.
Galaxy told shareholders on Wednesday that its offtake agreement with Yi Chun Yin Li New Energy had been terminated, with the tonnage now allocated to Chengxin.
“We are pleased to welcome Chengxin as a new major offtake partner, further diversifying and strengthening Galaxy’s customer base to support Mt Cattlin’s operations. Chengxin also has expansion plans underway to increase production capacity in preparation for the impending lithium demand surge in the medium to long term,” said Galaxy CEO Simon Hay.
“As previously advised, we expect to conclude 2020 with additional shipments to customers and for Galaxy’s spodumene inventory to return to normal levels. The drawdown of inventory combined with strong customer indications for demand in 2021 has also led Galaxy to examine the potential ramp-up of Mt Cattlin back to full rate in 2021, although there will need to be sustained price increases for us to commit to the return of higher production levels,” Hay said.
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