Australian lithium producer Pilbara Minerals has entered into a new offtake agreement with Sichuan Yahua Industrial Group, a Chinese enterprise, for the supply of spodumene concentrate, a critical component in lithium battery production.
Per the terms of the deal, Pilbara will supply 20,000 tonnes of spodumene concentrate from its Pilgangoora operation in Western Australia within the current year, followed by annual deliveries of 100,000 tonnes for 2025 and 2026. There is also an option for Pilbara to supply an additional 60,000 tonnes each year.
Dale Henderson, Managing Director and CEO of Pilbara, emphasized that the agreement builds on an existing relationship between the two companies, marking a continuation of their collaborative efforts.
This agreement follows Pilbara’s recent expansion of its sales contract with Ganfeng Lithium, another Chinese company, for the upcoming three years, along with a modification in its supply agreement with Chengxin Lithium Group that increased sales volumes and extended the contract period.
The spodumene will be sold at market rates at the time of each shipment. The price of lithium carbonate, a key raw material for lithium hydroxide used in battery manufacturing, has seen a significant drop over the past year, currently standing at about US$15,653 per tonne, down from previous highs.
Yahua, which counts major corporations like Tesla and LG Chem among its clients, is recognized as one of the top lithium hydroxide producers in the lithium market.
Pilbara is also advancing its operations by establishing a demonstration plant at Pilgangoora to process lithium, with a goal to significantly cut carbon emissions by over 80% in one of the most energy-demanding stages of lithium battery material production, should the plant utilize renewable energy sources. This initiative aligns with Pilbara’s aim to hit a production milestone of 1 million tonnes of spodumene concentrate by the next year.
The Pilgangoora project is noted for its substantial reserves and resources, with proven and probable reserves of 214.2 million tonnes at a grade of 1.19% lithium oxide, equating to 2.5 million tonnes of lithium. The total resource base is estimated at 413.8 million tonnes with a grade of 1.15% lithium oxide, translating to 4.8 million tonnes of the metal.
Closing the trading day in Sydney at A$4.18 per share, Pilbara Minerals boasts a market capitalization of A$12.6 billion (approximately $8.3 billion), reflecting its stature and the growing global demand for lithium as a pivotal element in the clean energy transition.
