Valence secures $50m offtake agreement
PERTH (miningweekly.com) – Graphite producer Valence Industries has inked a $50-million sales contract with an Asia Pacific-based customer.
The ASX-listed company reported on Tuesday that the offtake agreement would run for a period of three years, and focused on the coarser flake graphite production from the Uley project, in South Australia.
The delivery profile in the contract was timed to match production from the existing Uley facilities, and the customer would initially be supplied from the existing 14 000 t/y plant, and then from the expanded production facilities.
The Phase 2 expansion would see production increase from 14 000 t/y to 50 000 t/y. The expansion of the Uley site would provide additional processing capacity in 25 000 t/y increments of graphite output, to reach 64 000 t/y, to effectively match market demand.
The company was ramping up the production levels of its existing facilities to reach full capacity by the end of September, and shipments were expected to progressively increase over this period, in line with customer orders, as production rates increased and volumes for specific orders were produced.
Valence said on Tuesday that the benchmark pricing under the new sales contract exceeded the company’s previously announced weighted average price of $1 335/t, and included a take-or-pay provision on the volumes ordered.
The latest sales contract joined a number of others which Valence had already secured, with contracts covering all sizes and purities of graphite production.
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