Lithium developer Pilbara Minerals has secured an off-take agreement with China’s Jiangxi Ganfeng Lithium for spodumene production from the Pilgangoora project in Western Australia.
According to a Pilbara statement, the offtake agreement involves 160,000 tonnes per annum (tpa) of chemical-grade spodumene concentrate production from stage one of the lithium-tantalum project over an initial 10-year period, with two five-year options to extend the arrangement by an additional 10 years.
If stage two of the mine is approved, Pilbara will supply Ganfeng with an additional 25 per cent of the Pilgangoora project’s expanded production.
The agreement with Ganfeng, together with an off-take arrangement previously announced with General Lithium, means Pilbara has locked in sales of at least 300,000tpa pf spodumene from Pilgangoora, or 100 per cent of the forecast stage one production.
As part of Ganfeng’s commitment to Pilgangoora, it will also invest at least $20 million into development of stage one of the project, giving it a five per cent stake in the Perth-based company.
Pilbara managing director Ken Brinsden said the agreements with Ganfeng and General Lithium underscore the importance of Pilgangoora as a supply solution for the burgeoning demand for lithium raw material.
“We are delighted to have reached agreement with one of the world’s pre-eminent and fastest growing integrated lithium companies, and we welcome Ganfeng as a long-term partner at Pilgangoora,” Brinsden said.
“With the chemical-grade spodumene off-take now completed, the Pilbara team together with our financial advisors, BurnVoir Corporate Finance, are fully focused on arranging the balance of the Pilgangoora project’s development funding.
“In that regard, we are well advanced and with the support of our major customers we look forward to announcing a successful funding solution in the near term.”
Ganfeng, listed on the Shenzhen Stock Exchange, is one of China’s largest integrated lithium producers.
If stage two of Pilgangoora proceeds, Ganfeng has agreed to provide financing for up to 50 per cent of the its development and capital costs, and will be offered up to 50 per cent of the additional production.