JOHANNEBURG (miningweekly.com) – Australian lithium developer Pilbara Minerals has signed its first major binding offtake agreement for spodumene produced at its 100%-owned Pilgangoora lithium-tantalum project, in Western Australia.
The offtake agreement, which was signed with a Chinese lithium chemicals company, was for the supply of 140 000 t/y of 6% chemical-grade spodumene concentrate over a six-year period from the first quarter of 2018, with the option to extend for a further four years.
This represented over 40% of the Pilgangoora project’s anticipated initial yearly output of spodumene concentrate, underpinning its production profile and cementing Pilbara’s strategy to fast-track the financing and development of the project as a significant new low-cost supplier to the global lithium market.
The binding offtake agreement converted the first of a series of nonexclusive memoranda of understanding signed by Pilbara with its prospective customer base last year.
Additional offtake agreements were currently at an advanced stage of negotiation, with further announcements expected in the short term that would largely cover the balance of Pilgangoora’s anticipated initial output of over 300 000 t/y of chemical-grade spodumene concentrate.
Pilbara MD Ken Brinsden said the agreement represented a major milestone for the company, underlining the importance of the Pilgangoora project as a globally significant hard rock spodumene resource.
“This is Pilbara’s first binding offtake agreement and it crystallises the strong relationship we have developed with key offtakers over the past year, and cements a long-term partnership with one of the significant players in China’s rapidly evolving lithium chemicals and battery industry,” he said.
Owing to confidentiality provisions associated with the binding offtake agreement, Pilbara could not reveal the name of the offtake party pending the resolution of unrelated commercial arrangements by the offtaker; however, Pilbara expected to be in a position to reveal the identity of the offtaker in the coming weeks, when the confidentiality restrictions were likely to fall away.