Shares in Altura Mining have finished 36 per cent higher today after the lithium producer announced an offtake deal with Chinese company Ganfeng Lithium.
Shares in Altura Mining have finished 36 per cent higher today after the lithium producer announced an offtake deal with Chinese company Ganfeng Lithium.
Under the offtake agreement, Altura will supply a minimum of 70,000 tonnes of spodumene concentrate annually to Ganfeng from 2019 until 2021, with an option for a five-year extension.
An additional five-year extension is also possible via a mutual agreement.
Altura recently opened its Pilgangoora mine in the Pilbara, which is forecast to produce 220,000tpa under the first phase of the project, with a second stage expansion expected to double production to 440,000tpa.
The Chinese company will also purchase a minimum of 8,000t in 2018 and will make an $US11 million pre-payment for 2019 shipments.
The agreement also includes an option for Ganfeng to purchase any additional stage one concentrate produced at Pilgangoora, along with the opportunity to increase supply with access to 50 per cent of production from the stage two expansion.
Altura shares were 36.11 per cent higher at 24 cents each today.
The deal includes a price range of $US550 to $US950/t until the end of 2020.
Altura has also reached an agreement with major shareholder and existing offtake partner Shaanxi J&R Optimum Energy to reduce its minimum commitment from 100,000tpa to 50,000tpa from 2019 onwards.
Ganfeng is one of the largest lithium manufacturers in the world, and produces over 20 lithium products for various applications, including lithium ion batteries.
Altura managing director James Brown said the new agreements would underpin production and remove any offtake uncertainty.
“Ganfeng is one of the largest and most respected lithium companies in the world and an offtake agreement with them is further proof of the quality of the product we are producing from the Altura Lithium operations,” he said.
“The terms of agreement mirror the floor price component of our existing offtakes which provides us with significant security while the agreed pre-payment provides a healthy working capital buffer during the ramp-up phase.
“The revised agreement with JRO together with the broadening of Altura’s customer base with Ganfeng’s commitment significantly addresses any implications to the offtake agreement from JRO’s restructuring activities.
“We continue to field inquiries regarding offtakes which is testament to the quality of the Altura lithium concentrate and evidence there is still strong long-term global demand.”
