Pilbara Minerals has signed a five-year offtake agreement with China-based Yibin Tianyi to supply lithium from its Pilgangoora project in Western Australia.
Pilbara Minerals has signed a five-year offtake agreement with China-based Yibin Tianyi to supply lithium from its Pilgangoora project in Western Australia.
Under the agreement, Pilbara will supply 60,000 tonnes of spodumene concentrate in 2020, which will increase to 75,000tpa between 2021 and 2024, with an option to extend for a further five years.
Yibin Tianyi had already ordered and received 20,000t of lithium this month.
Pilbara is targeting a second shipment for early May at the latest, after which a regular delivery schedule will be established.
Shares in Pilbara Minerals closed up 13.8 per cent on the news to trade at 16 cents.
Yibin Tianyi is based in China’s Sichuan province, where it is currently building a lithium chemical plant with an initial production capacity of up to 25,000tpa.
Yibin is also a key lithium supplier to electric vehicle battery manufacturer and Pilbara’s largest shareholder, Contemporary Amperex Technology (CATL).
Pilbara first introduced CATL to its register in September last year through a $36.5 million share placement.
The new agreement further integrates Pilbara within the CATL supply chain, Pilbara Minerals managing director Ken Brinsden says.
“This will allow us to capture value from the future growth in the electric vehicle market while also supporting Yibin Tianyi’s growth ambitions to become one of the biggest lithium chemical suppliers in China,” he said.
“The development of strategic partnerships with such major players in the market continues to demonstrate the quality and scale of the Pilgangoora project, and the important role it will play in helping to meet future demand for lithium raw material supply.”
Pilbara’s wholly owned Pilgangoora lithium-tantalum project is located 120 kilometres from Port Hedland.
It is one of the biggest new lithium ore deposits in the world, hosting 2 million tonnes, Pilbara says.
The operation produces around 330,000tpa of roughly 6 per cent spodumene concentrate and around 145,600kgpa of more than 5 per cent tantalite concentrate at a name-plate capacity.
Pilbara Minerals said although it had experienced some disruption within the China supply chain as a result of COVID-19, the company had not yet experienced any impact to its Pilgangoora operations.
Pilbara said it continued to secure sales, credit and shipping.
The company anticipates shipments for the March quarter will be consistent with the lower end of its previously announced guidance of between 35,000t and 50,000t.
