Altura Mining has secured a supplier contract and multi-year offtake agreement with global lithium leader, China’s Hunan Yongshan Lithium.
The agreement cements the relationship between Altura and Hunan Yongshan’s parent company Shanshan, which holds a 15.1 per cent stake in Altura, making it the company’s second largest shareholder.
It will see Altura become a key supplier to Shanshan’s new lithium chemical plant with a planned first phase production capacity of 25,000 tonnes annually of lithium carbonate equivalent (LCE).
Construction of the plant began in April and is set to include a second phase expansion which will take the overall output to 45,000 tonnes per annum LCE.
Key terms of the agreement include a separate contract for Altura to provide 44,000 dry metric tonnes of 6 per cent grade spodumene concentrate in line with market price for the year of 2020.
This will become a five-year offtake agreement from 2021 to 2025 and for contract years two to five (2022 to 2025) Altura’s minimum annual quantity will be 60,000 dry metric tonnes of product.
There will also be the option for the sale of any other stage one production for a maximum of 30,000 dry metric tonnes in 2021 and 60,000 dry metric tonnes between 20222 and 2025.
Altura managing director James Brown said the deal with Hunan further diversifies its customer base and de-risks its sales channels.
“Our customer list boasts some of the biggest and best names in the battery materials sector,” Brown said.
“Adding Shanshan to that list further demonstrates the market’s increasing desire for stable, long-term, high quality lithium concentrate supplies.
“Shanshan’s decision to partner with Altura was well considered and very deliberate. Shanshan believes it has partnered with a reliable and long-term supplier of quality spodumene concentrate.
“Further, they have seen Altura’s performance in the recent declining market as testament to Altura’s market leading operation. With Shanshan now a key customer, as well as a major shareholder, our interests are well aligned.”