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Altura Mining signs offtake agreement with GFL International

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Global Mining Review,

Altura Mining Ltd has reached a new binding offtake agreement (BOA) with GFL International Co., Ltd (GFL), a wholly owned subsidiary of global lithium producer Ganfeng Lithium.

The new agreement provides Altura with a more diverse customer base and locks in 100% of planned production from the recently commissioned flagship Altura Lithium operation located at Pilgangoora in Western Australia.

GFL is a global battery materials producer that is continuing to expand both its lithium carbonate and lithium hydroxide production capacity. The new BOA further diversifies GFL’s existing supplier base and provides the option to increase supply through access to 50% of the Stage 2 expansion production from the Altura Lithium operations.

Altura has also reached agreement with existing offtake partner in Shaanxi J&R Optimum Energy Co., Ltd (JRO) whereby JRO will reduce its current BOA commitment from a minimum of 100 000 tpy to a minimum of 50 000 tpy from 2019 onwards. This will provide Altura with more flexibility as JRO aims to conclude its current restructuring. Altura is also provided with an opportunity to expand its existing customer base with the removal of JRO’s rights to additional tonnage produced.

Altura Managing Director, James Brown, said the new agreements would underpin production and should remove any offtake uncertainty: “Ganfeng is one of the largest and most respected lithium companies in the world and an offtake agreement with them is further proof of the quality of the product we are producing from the Altura Lithium operations.”

“The terms of agreement mirror the floor price component of our existing offtakes which provides us with significant security while the agreed pre-payment provides a healthy working capital buffer during the ramp-up phase.”

“The revised agreement with JRO together with the broadening of Altura’s customer base with Ganfeng’s commitment significantly addresses any implications to the offtake agreement from JRO’s restructuring activities.”

“We are producing a high-grade product that is highly sought after. We continue to field inquiries regarding offtakes which is testament to the quality of the Altura lithium concentrate and evidence there is still strong long-term global demand.”

Key Terms of BOA – GFL International Co., Limited (GFL)

  • Minimum of 70 000 dry metric tonnes (DMT) per annum of 6% grade spodumene concentrate (SC6.0) with minimum 8000 DMT commitment in 2018;
  • Term of BOA current to 31 December 2021 with a further 5 year extension at GFL election plus an additional 5 year extension by mutual agreement;
  • US$11 million pre-payment on 2019 shipped cargoes;
  • Minimum price of US$550 DMT (FOB equivalent) based on Li20 content per DMT on 6% Li20 until end of 2020;
  • Maximum price of US$950 DMT (FOB equivalent) until end of 2020;
  • CIF pricing based on agreed formula incorporating published reference pricing weighted for lithium carbonate and lithium hydroxide; calculated quarterly in arrears;
  • GFL option to purchase any additional Stage 1 spodumene concentrate produced;
  • GFL option to increase supply via access to 50% of spodumene concentrate produced as part of Stage 2 expansion operations.

Key Revised Terms of BOA – Shaanxi J&R Optimum Energy Co., Ltd (JRO)

  • Minimum of 50 000 DMT per annum of 6% grade spodumene concentrate (SC6.0) with no tonnage commitment in 2018;
  • Removal of rights of any additional spodumene concentrate produced by Altura Lithium;
  • Any additional spodumene concentrate will be available for purchase by JRO upon mutual agreement basis;
  • All other key terms of existing agreement remain unchanged.

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Australian mining news Chinese mining news Lithium mining news