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Pilbara Minerals boosts lithium exports with expanded Chengxin and Ganfeng offtake agreements

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By Colin Hay - 

Australian lithium producer Pilbara Minerals (ASX: PLS) has once again successfully expanded an offtake agreement with a major Chinese buyer.

The company has confirmed it has executed an amendment to its existing offtake agreement with Chengxin Lithium, significantly extending and expanding the supply of spodumene concentrate to a leading lithium chemical converter.

Today’s announcement comes hot on the heels of Pilbara Minerals’ recent execution of an amendment to its existing offtake agreement with Ganfeng Lithium.

In a major extension and expansion of a 2023 offtake agreement with Chengxin, Pilbara Minerals will this year supply an additional 60,000 tonnes of spodumene concentrate from its 100%-owned Pilgangoora operation in WA, taking the total supply in CY24 to 85,000t.

In each of the following two calendar years, Pilbara Minerals will supply 150,000t of spodumene concentrate.

Partnership process on track

Managing director and chief executive officer Dale Henderson said the increased supply to Chengxin is separate to Pilbara Minerals’ strategic partnership process, which continues to be progressed in parallel and remains on track to conclude in the March quarter 2024.

“We are very pleased to be extending and expanding our relationship with Chengxin, a leading lithium chemical producer and supplier to customers such as BYD, LG Chemical, SK On, CATL and Hyundai,” Mr Henderson said.

“This amendment highlights the demand for Pilbara Minerals’ product and is a continuation of our strategy to expand our partnership with leading global lithium producers in the medium term while we progress the development of our long-term downstream partnership strategy.”

Ganfeng Lithium expansion

In mid-January, Pilbara Minerals executed an amendment to its existing offtake agreement with Ganfeng Lithium that materially increased its short- and medium-term supply of spodumene to the Chinese firm.

Under an existing agreement with Ganfeng signed in 2017, Pilbara Minerals supplies 160,000t of spodumene concentrate per annum from the Pilgangoora operation in the Pilbara.

The recent amendment results in a total allocation of up to 310,000tpa of spodumene concentrate over CY24, CY25 and CY26.

In 2024, Pilbara Minerals will supply an additional 150,000t of spodumene concentrate, taking the total supply in CY24 to 310,000t.

The following year it will supply an additional 100,000t (with an option to increase to 150,000t at Pilbara Minerals’ election), taking the total supply in CY25 to between 260,000t and 310,000t.

Ganfeng is one of the world’s leading lithium-ion supply chain participants.

While the lithium industry has taken a pummelling recently, Mr Henderson said the long-term outlook for the industry remains incredibly exciting.