Pilbara Minerals said Chinese battery materials supplier Ganfeng Lithium Group plans to nearly double its purchase of spodumene concentrate from the Australian lithium producer over the next three years despite an oversupply of lithium salts and tumbling prices.
Pilbara Minerals and Ganfeng Lithium inked an amendment to their existing offtake deal yesterday, the West Perth-based firm said on the same day. The purchase will rise to 310 kilotons per annum of spodumene concentrate from 160 ktpa, with the sales price to continue to be based on the prevailing market price, it added.
Ganfeng Lithium needs normal production regardless of the market price, so ensuring the supply of raw materials remains its top priority, The Paper reported, citing the Xinyu-based company.
"The long-term outlook for the industry remains incredibly exciting," said Dale Henderson, managing director and chief executive of Pilbara Minerals. "Both Ganfeng and Pilbara Minerals remain focused on extending our respective positions as major, low-cost producers in the burgeoning lithium market.
"We look forward to further collaboration with Ganfeng and many more successful years working together," Henderson added.
The lithium-ion battery sector continues to develop well despite temporary volatilities, a source at Ganfeng Lithium told The Paper. An increase of 150 ktpa of raw materials is not too much, corresponding to about 20 kt of lithium salt products, the source added, without disclosing the firm's carbonate and lithium hydroxide production costs but saying that costs shift with raw materials prices.
The cost of extracting lithium from Australian lithium concentrate may fall below CNY40,000 (USD5,600) per ton this year, according to CCB Futures' latest forecast.
The battery-grade lithium carbonate price closed flat at CNY96,200 per ton yesterday, while that of lithium hydroxide ended flat at CNY84,600 per ton, according to Shanghai Metals Market.
"The expanding of our current offtake agreement with Pilbara Minerals marks another important step to further strengthen our valued partnership with Pilbara Minerals," noted Wang Xiaoshen, president and vice chairman of Ganfeng Lithium.
"The increased supply from Pilbara Minerals also demonstrates our strong commitment to support the growth of our global customers through the creation of cost-competitive and high-quality lithium raw materials," said Wang. "We are looking forward to our future cooperation with Pilbara Minerals."
Ganfeng Lithium and Pilbara Minerals inked their first purchase and sale agreement in 2017. The Chinese firm then subscribed for shares and holds a stake of about 5.8 percent in Pilbara Minerals as of the end of last year, making it the Australian company's fourth largest shareholder.
（Picture: Veer）
