Pilbara Minerals has upped its spodumene concentrate offtake agreement with Chinese lithium chemical converter Chengxin Lithium.
The extended and expanded agreement is set to bolster Pilbara Minerals’ lithium sales in the face of the recent price downturn.
Under an existing short-term agreement with Chengxin signed in 2023, Pilbara Minerals agreed to supply 70,000 tonnes of spodumene concentrate in the 2023–24 financial year (FY24) from its Pilgangoora operation in Western Australia.
Pilbara Minerals will now supply an additional 60,000 of spodumene concentrate to Chengxin in FY24.
The agreement was also extended over the next two years, with a deal to supply a further 300,000 of spodumene concentrate by the end of 2026.
“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,” Pilbara Minerals managing director and chief executive officer Dale Henderson said.
“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.”
The deal stipulates that the spodumene concentrate be sold at the prevailing market price at the time, giving Pilbara Minerals room to see higher returns when lithium prices lift.
“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,” Chengxin chair Zhou Yi said.
Pilbara Minerals recently also expanded its offtake agreement with Ganfeng Lithium Group for a further 310,000 tonnes through to the end of 2026.
The offtake expansions come at a time of increased production for Pilbara Minerals, with 176,000 tonnes of spodumene concentrate produced in the December quarter alone.
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