Australian lithium producer, Pilbara Minerals (ASX: PLS), has amended its offtake agreement with Ganfeng Lithium, increasing sales over the next three years with the option to further boost spodumene concentrate tonnage sold to the firm.
The existing agreement with Ganfeng, signed in 2017, outlined a total allocation of up to 310,000tpa from Pilbara’s flagship Pilgangoora operation in Western Australia.
The deal, to supply additional volumes of the raw material used in electric vehicle batteries, comes as a respite for Pilbara at a time when lithium prices have slumped globally.
“We are delighted to be expanding our valued relationship with Ganfeng, who has extensive capability in the production of battery grade lithium products with over 20 years of industry experience and rapidly expanding global footprint as a major global supplier,” Pilbara CEO and managing director, Dave Henderson said in a statement.
The company has confirmed that all spodumene concentrate will be sold in alignment with the prevailing market price. It also noted that this increased supply to the major Chinese lithium firm is separate to Pilbara’s strategic partnership process, which continues to progress independently and is expected to conclude in Q1 2024.
This year, Pilbara will supply an extra 150Kt of spodumene concentrate to Ganfeng, resulting in a total of 310Kt in 2024. During 2025, the company will supply a further 100Kt, with an option to increase to 150Kt at Pilbara’s mineral election, taking the total supply to 260Kt- 310Kt that year. In 2026 (the final year of the deal), Pilbara will supply another 100Kt, with the same option to increase to 150Kt, resulting in a total supply of 260Kt- 310Kt.
“The expanding of our current offtake agreement…marks another important step to further strengthen our valued partnership with Pilbara Minerals,” said Ganfeng president and vice chairman, Wang Xiaoshen.
“The increased supply…demonstrates our strong commitment to support the growth of our global customers through the creation of cost-competitive and high-quality lithium raw materials. We are looking forward to our future cooperation with Pilbara Minerals.”