Emerging lithium-boron supplier ioneer (ASX: INR) has signed a binding offtake agreement with China’s Dalian Jinma Boron Technology Group Co Ltd for the supply of boric acid from ioneer’s Rhyolite Ridge project in Nevada.
Jinma is a top 500 Chinese private enterprise and operates one of the most complete boron industrial supply chains in the world.
Under the terms of the five-year agreement, ioneer will supply Jinma with 105,000t of boric acid per annum – or 9% of world’s 2019 borate production of 1.155Mt.
The supply volume represents over 50% of Rhyolite Ridge’s expected annual production of more than 170,000t.
Supply will be based on prevailing market prices for similar volumes and quality and remain at a fixed price for the first six months of delivery with subsequent regular price adjustments to be negotiated to market.
As a key player in China’s boric acid market, Jinma will also act as ioneer’s exclusive distributor and representative for customers in China and Taiwan, excluding large multinationals with operations in China which will be directly supported by ioneer’s sales organisation.
Supply is expected to commence in 2023 when Rhyolite Ridge is due to start production and is conditional on ioneer making a positive final investment decision, which is expected in 2021.
Managing director Bernard Rowe said the agreement with a major customer is a significant milestone for ioneer.
“It validates the strong demand we see for our premium quality boron products,” he said.
Jinma is intricately involved in all aspects of the boron supply chain which makes them an excellent first customer … which will help position [us] ahead of securing financing, as we move Rhyolite Ridge toward production.”
He said the ability to secure significant contract demand demonstrates ioneer’s confidence in becoming a major, low-cost, US producer of lithium.
With forecast annual production of more than 20,000t of lithium carbonate and 170,000t of boric acid, Rhyolite Ridge is set to become a globally-significant lithium and boron producer.
A December 2018 pre-feasibility study demonstrated the project’s scale, long life and potential to become the lowest cost lithium producer in the world as well as the largest lithium producer in the US.
Last month, an independent third-party study confirmed lithium carbonate produced at the Rhyolite Ridge pilot plant could meet or exceed customer specifications.
SGS Canada’s analysis has also showed key impurities in Rhyolite Ridge lithium carbonate to be in-line with, or less than, the amounts required by customers.
Lithium and boron are essential components in a number of everyday items as well as emerging clean technologies such as electric vehicles and renewable energy.
At midday, shares in ioneer were up 5.26% to $0.20.