Pilbara Minerals (ASX: PLS) has inked a deal with Sichuan Yahua Industrial Group Co. Ltd (Yahua) which will see it supply up to 80Kt of spodumene concentrate from its Pilgangoora Operation to the Chinese lithium company in its first year of agreement.
The deal will connect Pilbara to Yahua’s universe of impressive battery material customers, including Tesla, LG Energy Solutions, LG Chem, and CATL.
Pilbara will supply 20Kt of spodumene concentrate with an option for an additional 60Kt to Yahua in the calendar year 2024, with this rising to a definite sale of 100Kt with a potential 60Kt more in calendar years 2025 and 2026.
Pilbara Minerals’ Managing Director and CEO Dale Henderson said the deal with Yahua – one of the world’s largest lithium hydroxide producers – had been in the works for some time, given previous sales between the two.
“This offtake builds-on an established relationship between our companies, having previously completed a number of sales together,” he said.
“The agreement enables Yahua to further expand its supply chain commitments with key global battery customers and builds-out Pilbara Minerals medium-term sales profile whilst preserving long-term optionality as we assess downstream opportunities in-line with our growth strategy.”
Yahua’s Vice Chairman Meng Yan said the arrangement would support his company’s activity in the green energy space.
“We are pleased to strengthen our relationship with Pilbara Minerals via this offtake agreement which secures a reliable supply of high quality spodumene concentrate over the medium term,” he said.
“We look forward to working with Pilbara Minerals to further enable our global customers to support the global energy transformation.”
Pilbara Minerals is trading at $4.16.