Altura will supply Shandong Ruifu with a minimum of 35,000 tonnes per year of 6% lithium spodumene concentrate, produced from its lithium mine at Pilgangoora in Western Australia, for a period of five years from July 2019 until June 2024.
For the remaining months of 2019, the agreement states that Altura will also supply Shandong Ruifu with a minimum of 24,000 tonnes of lithium spodumene concentrate.
The first shipment of 8,000 tonnes of lithium spodumene concentrate will be made later this month to a pricing formula that will incorporate published reference pricing weighted for lithium carbonate and lithium hydroxide.
The price agreed will also take consideration of a floor price of $550 per tonne and a ceiling price of $950 per tonne.
Fastmarkets assessed the contract price of spodumene, 5-6% Li2O min, cif China
, at $585-650 per tonne on June 26, down from $600-670 per tonne on May 29.
“The offtake arrangement with Shandong Ruifu continues to broaden and strengthen our customer base,” Altura managing director James Brown said.
“Shandong Ruifu previously received product from Altura in 2019, and to move forward from that initial cargo into a long-term contract is a very positive step forward for Altura,” he added.
“Plant performance continues to improve, and the quality of product coming out of the Altura operation continues to attract significant customer interest, which is underpinning both short- and long-term demand,” he said.
Shandong Ruifu will also have the option to negotiate an offtake deal for Altura’s stage 2 production.
At the same time, Altura and Shaanxi J&R Optimum Energy have terminated their offtake agreement for 50,000 tpy of lithium spodumene. Shaanxi will no longer have any rights to spodumene concentrate produced by Altura.
This follows the sale by Shaanxi of the last of its shareholding in Altura to Ningbo Shanshan.
Ganfeng Lithium and Lionergy are the two remaining parties to offtake deals with Altura. The Australian producer is supplying Ganfeng with 70,000 tpy of lithium spodumene concentrate until December 2021, and Lionergy with 100,000 tpy of similar material until September 2023.
Pilgangoora’s stage one production has nameplate capacity for 220,000 tpy of lithium spodumene, while the second stage of expansion will increase the output to as much as 450,000 tpy.
The agreement with Shandong Ruifu was reached at a time of depressed prices in the lithium industry, but showcases that long-term demand for lithium compounds in China persists, despite the current soft oversupply of material in the market.