ASX-listed aspiring central African lithium developer, AVZ Minerals continues to attract offtake partners to its proposed Manono hard-rock lithium and tin project in the Democratic Republic of the Congo. The Perth-based company has entered into another binding lithium offtake agreement for the sale of spodumene concentrate from Manono, this time with Chinese firm, Yibin Tianyi Lithium Industry Co.
The latest deal marks the third binding lithium offtake agreement AVZ has now tucked away for the gargantuan lithium project. Yibin Tianyi has signed on for up to 200,000 tonnes of spodumene concentrate per annum from Manono for an initial three-year term.
Signing of the new offtake comes hot on the heels of AVZ’s announcement this week of a binding three-year offtake contract with Kalon Resources for the purchase of 600 tonnes of tin concentrate per annum from Manono.
AVZ also recently squared away offtake agreements with Shenzhen Chengxin Lithium Group and Ganfeng Lithium for the supply of 180,000 tonnes and 160,000 tonnes of spodumene concentrate per annum to the Chinese firms, respectively.
AVZ Minerals Managing Director, Nigel Ferguson said: “This agreement (with Yibin Tianyi) takes our spodumene concentrate binding offtake commitments to more than 80 per cent of the project’s annual spodumene concentrate production, which is a massive endorsement for the Manono project and one that satisfies an important condition precedent for our prospective project financiers.”
“At present, we are seeing buoyant market conditions with reported spodumene concentrate prices in China increasing circa 30 per cent in the first quarter of the year.”
AVZ says Yibin Tianyi is set to become one of the largest lithium hydroxide producers in China and will be looking to soak up approximately 700,000 tonnes of spodumene concentrate a year from the world market after it undertakes planned hydroxide plant expansions in China.
Car making heavyweights Tesla and Volkswagen have been advancing plans to ramp up their respective battery factory capacities over the next decade in anticipation of a global electrical vehicle, or “EV” revolution.
Chinese firm, Contemporary Amperex Technology, one of the world’s largest lithium-ion battery manufacturers who is linked to Yibin Tianyi, currently makes lithium batteries that are used in some Tesla electric vehicles that are assembled in Shanghai.
The rebounding lithium market sentiment has no doubt been helping AVZ’s offtake agreements to be inked and bodes well for the financial metrics in the company’s forthcoming “optimised” definitive feasibility study on Manono that is scheduled to be released in the June quarter of this year.
AVZ’s first version of the definitive feasibility study last year envisages Manono pumping out an annual EBITDA averaging more than US$400 million a year.
Pre-production CAPEX for the project development has been estimated at US$545 million, with production earmarked to kick off in the first half of calendar 2023.
AVZ anticipates payback on its initial capital outlay to be just of two-and-a-quarter years.
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