Altura will supply Weihua with 50,000 tonnes per year of lithium spodumene concentrate, min 6%, produced from its nameplate Pilgangoora mine in Western Australia for a period of five years commencing in August 2019.
The first 10,000-tonne shipment of lithium spodumene concentrate is scheduled for August, with the remaining 2019 allocation of 40,000 tonnes to ship up until February 2020.
Prices will be based on a lithium oxide (Li2O) content formula incorporating published reference prices weighted for lithium carbonate, Altura said.
The first contract period to February 2020 includes a floor price of $585 per tonne on a cif China basis and a ceiling of $695 per tonne under the same delivery terms.
The second and subsequent years include a floor of $550 per tonne on an fob basis and a maximum of $950 per tonne under the same delivery basis.
Fastmarkets last assessed the monthly the contract price of spodumene, 5-6% Li2O min, cif China
, at $585-650 per tonne on July 31, unchanged from the previous month but down by 8.5% from $600-750 per tonne in January.
The binding off take agreement expires on December 31, 2024, and Guangdong will have the option to renegotiate a potential offtake deal for Altura’s second-stage production.
“This new agreement with Weihua continues to diversify and strengthen our existing customer base, which is key when developing a new energy supply chain,” Altura managing director James Brown said in a statement.
“Weihua has established operations in China and demonstrated the ability to both mine and process battery pre-cursor materials. We welcome the Weihua partnership and look forward to a successful and long-term relationship,” he added.
This deal follows another offtake agreement announced early last month to supply 35,000 tonnes of lithium spodumene concentrate
to Chinese converter Shandong Ruifu for a period of five years from July 2019 until June 2024.
Both offtake agreements come at a time when the company has achieved strong production results
and amid a downward price trend in the lithium market
The company produced 42,402 tonnes of lithium spodumene concentrate at the Pilgangoora mine in the three months ended June 30, up by 43.1% from 29,627 tonnes in the preceding quarter.
First-stage production at Altura’s Pilgangoora mine started at the end of 2018, with nameplate capacity of 220,000 tpy of lithium spodumene.
The company has since consistently ramped up production, citing a timescale of two to three years to reach full capacity.
The second stage of production will raise the company's nameplate capacity to 440,000 tpy
but no timescale for that has been provided.
At the same time that the offtake deal was reached with Weihua, Altura agreed to reduce its existing offtake obligation to Lionergy to 65,000 tpy of lithium spodumene concentrate from 100,000 tpy previously.
Altura in November reached an offtake agreement with Ganfeng International
to supply the Chinese lithium producer with 70,000 tonnes of lithium spodumene concentrate.