Pilbara Minerals has announced that an amendment to materially extend and expand the spodumene concentrate supply to a leading lithium converter has been executed to an existing agreement with a global lithium chemicals producer, Chengxin Lithium Group.
The existing offtake agreement was signed by Pilbara Minerals and Chengxin Lithium Group in 2023, in which Pilbara Minerals agreed to supply 70,000t (kt) of spodumene concentrate from its 100 per cent owned Pilgangoora Operation in financial year 2024 (FY24).
The new amendment results in a significant extension and expansion of the offtake agreement until the end of calendar year 2026 (CY26). The terms of the amendment include:
- CY24 – Pilbara Minerals will supply an additional 60kt of spodumene concentrate, taking the total supply in CY24 to 85kt
- CY25 – Pilbara Minerals will supply 150kt of spodumene concentrate
- CY26 – Pilbara Minerals will supply 150kt of spodumene concentrate
Consistent with the existing pricing in the agreement, all spodumene concentrate volumes will be sold based on the prevailing market price.
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.
Pilbara Minerals’ Managing Director and CEO, Dale Henderson, said, “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 that the amendment highlights the demand for Pilbara Minerals’ product and is a continuation of its strategy to expand its partnership with leading global lithium producers in the medium term while Pilbara Minerals progresses the development of its long-term downstream partnership strategy.
“Both Pilbara Minerals and Chengxin are committed to the energy transition and are focused on extending our respective positions as high quality, low-cost producers in the growing lithium battery materials market.”
Chengxin’s Chairman, Zhou Yi, said, “We are pleased to be extending our agreement with Pilbara Minerals, a recognised leader in the mining and development of lithium assets.
“This agreement further deepens our valued partnership with Pilbara Minerals and we look forward to supporting our global customers through the continued provision of high quality and cost-competitive lithium materials.”