Australia's Altura makes first two lithium sprodumene shipments to China

Australian lithium spodumene producer Altura Mining shipped about 10,000 tonnes of lithium spodumene from Port Hedland in Western Australia to China in October 2018, the company has said.

Altura announced on October 31 that it had despatched two cargoes each of around 5,000 tonnes of lithium spodumene to China, on October 9 and October 20. The material came from the company’s Pilgangoora lithium mining operation.
The first shipment went to Altura’s offtake partner, Lionergy in China, but both shipments had a minimum average purity of 6% lithium oxide (Li2O).
The Australian miner did not specify the price at which the lithium spodumene was sold, but the bidding offtake agreement with Lionergy and J&R Optimum Energy established a floor and ceiling price for the first three years of an offtake agreement starting this year.
Altura intends to supply a minimum of 100,000 tonnes per year of lithium spodumene, min 6% Li2O, once production is fully ramped up, to each of its offtake partners, at a minimum floor price of $550 per tonne and a ceiling price of $950 per tonne.
The company did not specify when it planned to reach full production for stage 1 of this process.
The movements in lithium carbonate prices in China have made this type of offtake agreement - with a floor and ceiling price - more common because it safeguards both producer and consumer from the sort of price volatility that has been seen in China since late 2015.
The spot price for battery-grade lithium carbonate in China more than tripled to a monthly average of $26.60 per kg in April 2016, up from $7.70 per kg in June 2015.
Most recently, the spot price for battery-grade lithium carbonate, min 99.5% Li2CO3, ex-works China, dropped by 50% to 74,000-83,000 yuan ($10,724-12,029) per tonne on November 1, 2018. This was down from 158,000-160,000 yuan per tonne on January 4.
Because most of the lithium spodumene in China is converted into lithium carbonate, the direct effect of the lower price for battery-grade lithium carbonate has been to bring down the spodumene price in China.
Fastmarkets last assessed the monthly price for lithium spodumene at $700-800 per tonne, cif China, on October 31, down by 6.25% from $750-850 per tonne on September 26.
Altura plans to continue the ramp-up at its stage 1 production, which started on July 25, over the course of the next two or three years.
Additionally, the company will keep evaluating the possibility of increasing production at Pilgangoora with a stage 2 expansion.
Stage 1 has nameplate capacity for 220,000 tpy of lithium spodumene, while stage 2 would have capacity for 440,000 tpy.
*All lithium carbonate, hydroxide and spodumene prices are available in our Battery Raw Materials Market Tracker. Get a sample of the report here.
 

Martim Facada

martim.facada@fastmarkets.com

Published

Martim Facada

November 05, 2018

20:06 GMT

London