Lithium Australia (ASX:LIT) has signed a mixed metal dust (MMD) offtake agreement with South Korean battery recycler SungEel HiTech, effective 1 July 2024.
Under the three-year agreement, SungEel will purchase a minimum of 60% of Lithium Australia’s annual MMD production, subject to certain quality requirements.
SungEel recently opened a third hydro centre in South Korea, which is considered to be one of the largest lithium ion battery recycling plants in the world, capable of 20,000 tonnes of MMD input in phase one. Through this agreement, it is possible for SungEel to produce battery materials using MMD production by Envirostream.
Lithium Australia, which has a market capitalisation of $30.55 million, says the deal confirms the quality of its MMD product and represents a strategic partnership for its recycling growth strategy going forward.
“SungEel has been a long-standing customer and we are excited to expand our strong commercial relationship,” CEO Simon Linge says.
“We are now ready to start the next step of our SungEel relationship with a joint development agreement to be finalised through this year. We are excited to continue building momentum while aiming to achieve sustainable profitability within our recycling business in the near-term.”
The company says market demand for MMD is growing, with its sales for FY2024 year-to-date standing at 256 tonnes. Based on the company’s MMD sales, the revenue under this agreement would be $514,000, based on a price of $3.30 per kilogram of MMD.
SungEel currently operates recycling plants in South Korea, Hungary, Poland, India, and Malaysia, and has planned investments in the US, Spain, and Germany.
Lithium Australia is focused on the global energy transition and operates in Australia’s battery recycler industry, producing critical battery material lithium ferro phosphate.