Altura Mining signs multi-year lithium offtake deal with Chinese major shareholder
From 2022, Altura will supply 60,000dmt of spodumene annually to Ningbo Shanshan.
Pilbara lithium player Altura Mining (ASX: AJM) has signed a five-year offtake agreement with a subsidiary of the company’s second largest shareholder, battery industry supplier Ningbo Shanshan, covering production from its Pilgangoora project.
Shanshan owns 15.1% of Altura and is described as a global leader in the production and sales of anode and cathode material to the lithium battery market.
Altura says it will be a key supplier to Shanshan’s new lithium chemical plant which will have a planned phase one production capacity of 25,000 tonnes per annum of lithium carbonate equivalent (LCE).
Construction of the plant, located in Hunan’s province capital of Changsha, began in April this year. Shanshan’s plan includes a phase two expansion to take overall output to 45,000tpa of LCE.
The agreement comprises a separate one-year contract plus a five-year offtake agreement.
The separate contract for 2020 is to provide 44,000 dry metric tonnes of 6% grade spodumene contract.
The five-year contract will, from 2022, have a confirmed mineral annual quantity of 60,000dmt.
The binding offtake agreement also allows for the option to sell any other phase one production that becomes available up to a maximum of 30,000dmt in 2021 and 60,000dmt in successive years.
Customer list includes ‘biggest and best names’
Managing director James Brown said the agreement further diversifies Altura’s customer base, de-risked sales channels and was a testament to both the quality of the product and the “market-leading nature” of Altura’s operation.
Mr Brown said the latest offtake agreement is the result of months of close discussions with Shanshan to make sure they get what they need to support the Chinese company’s new lithium plant.
“Our customer list boasts some of the biggest and best names in the battery materials sector and adding Shanshan to that list further demonstrates the market’s increasing desire for stable, long-term, high-quality lithium concentrate supplies,” he added.
That customer base already includes Guangdong Weihua of Shenzhen, Shandong Ruifu (based in Feicheng and selling battery-grade lithium carbonate), Lionergy (an Inner Mongolia battery maker), along with Ganfeng Lithium to whom Altura consigned a record shipment of 24,500 wet metric tonnes last January.
Ganfeng describes itself as the “world’s third largest and China’s largest lithium compounds producer”.
The company said this latest agreement cements Altura’s close relationship with Shanshan.
The Chinese company was founded in 1989 and is listed on the Shanghai Stock Exchange with a market capitalisation of about $2.7 billion. It employs more than 4,000 people.
Production at Pilgangoora began in July 2018.