PILBARA MINERALS EXTENDS OFFTAKE AGREEMENT WITH CHENGXIN LITHIUM
7 February 2024
Australian lithium producer Pilbara Minerals Limited (ASX: PLS) (Pilbara Minerals) is pleased to announce that it has executed an amendment to its existing offtake agreement with Chengxin Lithium Group (Chengxin) which materially extends and expands the supply of spodumene concentrate to a leading lithium chemical converter.
Chengxin is a global integrated lithium chemicals producer with a growing international customer base for lithium battery materials supply. Customers of Chengxin include major supply chain participants within the lithium battery materials industry including; BYD, LG Chemical, SK On, CATL and Hyundai. Listed on the Shenzhen Stock Exchange, Chengxin has operations across China, Indonesia, Argentina and Zimbabwe.
Under an existing short-term agreement with Chengxin signed in 2023, Pilbara Minerals agreed to supply 70,000 tonnes (kt) of spodumene concentrate from the Company’s 100% owned Pilgangoora Operation in financial year 2024 (FY24).
The amendment results in a significant extension and expansion of the offtake agreement until the end of calendar year 2026 (CY26). The terms of the amendment are detailed below:
• CY24 - Pilbara Minerals will supply an additional 60kt of spodumene concentrate taking the total supply in CY24 to 85kt.
• CY25 - Pilbara Minerals will supply 150kt of spodumene concentrate.
• CY26 - Pilbara Minerals will supply 150kt of spodumene concentrate.
Consistent with the existing pricing in the agreement, all spodumene concentrate volumes will be sold based on the prevailing market price.
This increased supply to Chengxin, is separate to Pilbara Minerals’ strategic partnership process which continues to be progressed in parallel and remains on track to conclude in the March Quarter 2024.
Pilbara Minerals’ Managing Director and CEO, Dale Henderson, said:
“We are very pleased to be extending and expanding our relationship with Chengxin, a leading lithium chemical producer and supplier to customers such as BYD, LG Chemical, SK On, CATL and Hyundai.
“This amendment highlights the demand for Pilbara Minerals’ product and is a continuation of our strategy to expand our partnership with leading global lithium producers in the medium term while we progress the development of our long-term downstream partnership strategy.
“Both Pilbara Minerals and Chengxin are committed to the energy transition and are focused on extending our respective positions as high quality, low-cost producers in the growing lithium battery materials market.”
Chengxin’s Chairman, Zhou Yi, said:
“We are pleased to be extending our agreement with Pilbara Minerals, a recognised leader in the mining and development of lithium assets. This agreement further deepens our valued partnership with Pilbara Minerals and we look forward to supporting our global customers through the continued provision of high quality and cost-competitive lithium materials.”