Altura Mining has signed a new binding offtake agreement (BOA) with GFL International Co., Limited (GFL), a wholly owned subsidiary of leading global lithium producer in Ganfeng Lithium.
The new agreement provides Altura with a more diverse customer base and locks in 100 per cent of planned production from the recently commissioned flagship Altura Lithium operation located at Pilgangoora in Western Australia.
GFL is a leading global battery materials producer that is continuing to expand both its lithium carbonate and lithium hydroxide production capacity. The new BOA further diversifies GFL’s existing supplier base and provides the option to increase supply through access to 50 per cent of the Stage 2 expansion production from the Altura Lithium operations.
Altura has also reached agreement with existing offtake partner in Shaanxi J&R Optimum Energy whereby JRO will reduce its current BOA commitment from a minimum of 100,000 tpa to a minimum of 50,000 tpa from 2019 onwards. This will provide Altura with more flexibility as JRO aims to conclude its current restructuring. Altura is also provided with an opportunity to expand its existing customer base with the removal of JRO’s rights to additional tonnage produced.
Altura Managing Director James Brown said the new agreements would underpin production and should 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.”
Under the agreement, Altura will supply a minimum of 70,000 dry metric tonnes (dmt) per annum of 6 per cent grade spodumene concentrate, with minimum 8,000 dmt commitment in 2018 at a minimum price of US$550 dmt (FOB equivalent) based on Li20 content per dmt on 6 per cent Li20 until end of 2020
The term of the BOA is set to run until 31 December 2021, with a further five-year extension at GFL election plus an additional five-year extension by mutual agreement.